This Monday is an important day. It is Memorial Day, a US federal holiday to honor and mourn the military personnel who have died while serving in the Armed Forces. But that is not the only important thing happening on Monday. It is also my birthday. And while this is exciting, there is still one more important thing happening. On Monday, May 25, 2020, as the Massachusetts economy opens in its multi-phase plan, barber shops are allowed to re-open. I, along with my son, probably both needed a haircut in mid-March. But the coronavirus pandemic shut down non-essential retailers and personal services such as barber shops. As time has gone by and shops have remained closed, my hair, and my son’s, has continued to grow at what seems to be a faster rate than normal. So now, I have a giant mop on my head. Barber shops will have to follow strict guidelines, such as haircuts by appointment only and limits on the number of people allowed inside at the same time. I’m guessing that it may take a while before I can actually get an appointment, but I can see the light at the end of the tunnel. And I won’t have to let my wife try to cut my hair. And now on this week’s logistics news.
- Microsoft wins multiyear cloud and AI deal with FedEx to improve package deliveries
- Coronavirus brings beer drinkers back to Bud Light
- JD.com delivery costs reach ‘all-time low’ with pandemic volume growth
- Walmart is shutting down Jet.com
- Miami pilots e-cargo bikes to reduce congestion, pollution
- UPS hints at drone ambitions
- Social distancing sensors for the factory floor are now available
- Florida company goes from manufacturing arcade games to making hand sanitizer stations
Earlier this week I wrote about what the supply chain will look in a post COVID world. For FedEx, this will include a new partnership with Microsoft. The companies announced a multi-year partnership that will combine FedEx’s logistics network with Microsoft’s cloud. Dubbed FedEx Surround, the platform will target commercial shippers, such as manufacturers that use FedEx’s network to ferry goods to retailers and will use Azure’s artificial intelligence services to predict potential delivery delays. Aside from shipping delays, the platform will use IoT data provide more transparent package tracking for near-real-time insights down to the granular level of ZIP code. The companies are planning to launch a pilot with select customers this summer.
Coronavirus has shuttered many retailers but across the country liquor stores were deemed essential and allowed to remain open. And while alcohol sales have continued to grow, craft breweries are feeling the pinch. While craft breweries have turned to curbside pick-up and delivery, the majority of sales come through their tap rooms. As a result, big beer brands are seeing a bounce back in their sales. Craft brewers do not have the same distribution networks as the largest brewers, so as consumers go to liquor stores and supermarkets, the big beer brands are winning out. It remains to be seen what the long-term impact will be for the big brands, but according to multiple surveys, up to 60 percent of craft breweries could close in the next few months.
As mentioned in several articles, e-commerce is booming during the coronavirus pandemic. One thing that has been tricky for many retailers is how to balance costs while shifting gears towards more online commerce. JD.com is reporting that it is seeing record sales and lower costs. In Q1 of 2020, JD.com announced revenue grew 21 percent over Q1 2019, and it expects growth in the 20 – 30 percent range for Q2. On top of this, cost per delivery has reached an all-time low due to the increased order volume and cost controls in place. For JD.com, even though the costs to operate during the pandemic are up due to the need for personal protective equipment, the cost was easily covered by the uptick in business. According to CFO Sidney Huang, Fulfillment costs (defined by the company as procurement, warehousing, delivery, customer service, and payment processing expenses) were up 28 percent year over year, but logistics and other services revenue was up 54 percent in that same time. Those are some impressive numbers.
Walmart is shutting down Jet.com, the e-commerce site it acquired four years ago for $3.3 billion. When the acquisition was announced, I asked whether the acquisition was a strategic initiative or desperation move. Four years later, I’m not sure we have an answer. According to a Walmart statement, “due to continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition of Jet.com nearly four years ago was critical to accelerating our omni strategy.” This last part of Walmart’s statement is the most important as Jet.com founder Marc Lore now runs Walmart’s e-commerce division which has seen significant growth. In fact, it is now the second largest e-commerce company in the US behind Amazon. While same store sales increased 10 percent in Q1, e-commerce sales grew by 74 percent.
The city of Miami is piloting a new e-cargo bike initiative to reduce congestion and pollution. The city will partner with DHL Express and mobility logistics hub Reef Technology to pilot four low-powered electric-assist e-cargo bikes that will be used for deliveries across the city. The cargo bikes will come equipped with three wheels and a cargo container. They’re capable of pulling up to 400 pounds or 60 cubic feet in volume. A DHL truck will carry up to nine cargo containers for the bikes, which will be sent to the Reef Hub to be hooked up to the bikes for last-mile delivery in the morning. Those same containers can be reloaded in the afternoon for outbound shipments. The bikes are anticipated to reduce 101,000 kg of CO2 annually and help DHL achieve its short-term goal of “clean pickup and delivery solutions” for 70 percent of operations by 2025.
UPS continues to push ahead with its drone tests in an effort that could have significant implications for the nation’s wireless network operators. During a presentation at the Wireless Infrastructure Association’s Connect (X) virtual trade show UPS highlighted the tests it has performed since receiving FAA approval to operate a drone airline in 2019. Specifically, Bala Ganesh, the VP of UPS’s Advanced Technology Group, highlighted three key tests: working with Matternet to deliver medical samples to hospitals; launching drones from the top of UPS vehicles in rural areas; and delivering prescriptions to a retirement community in Florida. The presentation hinted at the possibility of UPS’s plans to connect a fleet of delivery drones to 4G or 5G networks, which would be big news.
As the economy continues to open, social distancing at the workplace will be a requirement. This can difficult on the manufacturing floor or in warehouses. ProGlove, a maker of ergonomic wearables for industry, has you covered. Leveraging its MARK family of wearable barcode scanners and ProGlove Connect app for Android, ProGlove announced a product upgrade that activates proximity sensing for frontline workers. When personally equipped with the MARK wearable scanner and paired Android device, workers coming within close proximity of each other are alerted by audio sound, optic LED light, and haptic vibration signals. The multiple alert system is important as manufacturing floors can be very noisy, so wearers are alerted in a variety of ways.
Coronavirus has caused many companies to shift gears in their manufacturing operations. Plenty of manufacturers have begun making face shields and other personal protection equipment to aid front line workers. In Florida, Bob’s Space Racers has been manufacturing large arcade games for amusement parks and fairs. The company is most famous for its whac-a-mole game, which was invented by the company’s founder. Now, however, the company is also shifting gears, making hand sanitizer stations to help out during the coronavirus pandemic. The company noticed that many dispensers were not efficient and would dispense too much sanitizer. Their new concept is a hands-free unit. When a person walks up to the station, they place their hand under the dispenser and with one foot, press down on a pedal. Since launching their new design a week ago, employees have been working every day and orders from across the country have been coming in daily.
That’s all for this week. Enjoy the long weekend and the song of the week, Pavement’s Cut Your Hair.