This Week in Logistics News (May 23 – 29)

logistics newsOn Wednesday, SpaceX was set to become the first piloted launch to orbit of a privately owned and operated spaceship. The launch of SpaceX’s Crew Dragon spacecraft also would have been the first piloted flight to orbit from US soil in nearly nine years. However, bad weather rolled through Florida and the launch was scrubbed. But the company will try again tomorrow, with a scheduled launch time of 3:22:45 pm EDT. This is the next available opportunity for a launch into the plane of the International Space Station’s orbit with the proper conditions for a rendezvous and docking. The forecast is once again not looking great for launch tomorrow, but SpaceX and its astronauts Douglas Hurley and Robert Behnken are hoping for the best. On a side note, my realtor will be watching with great anticipation as her youngest son will be in mission control. And now on to this week’s logistics news.

logistics newsEven in the midst of the coronavirus pandemic, Amazon is pushing ahead with the development of its own logistics network to speed up the delivery of online orders to its customers doorsteps. One area the company has been looking to expand is its Prime Air fleet, which moves goods between Amazon warehouses for delivery to the consumer. According to a study from DePaul University’s Chaddick Institute of Metropolitan Development, Amazon’s Prime Air fleet could grow to about 200 planes in the next seven or eight years. Currently, the company has 42 planes in its fleet. If this happens, it could become a rival for both UPS and FedEx. Currently, UPS and FedEx have the advantage due to their large central hubs in Louisville, KY and Memphis, TN resepctively. While Amazon generally operates out of smaller, regional airports, the company is making a large investment in a central hub at the Cincinnati/Northern Kentucky International Airport. This will be the first “built-to-spec” airport project for Amazon Air, and its capabilities include sortation as well as the infrastructure to handle multiple flights daily. An expanded fleet, combined with a large central hub, could be a game changer in the years to come.

logistics newsAs the coronavirus pandemic continues to grip the world, technology is being used to help in the fight. Over the last several weeks I have written about drone operations to deliver emergency supplies and medications in the US. Building on the program it launched in Africa, UAV delivery startup Zipline is partnering with Novant Health to deliver personal protective equipment and medical equipment in North Carolina. Under the partnership, Zipline’s drones will make 32-mile flights on two routes between Novant Health’s emergency drone fulfillment center in Kannapolis to the company’s medical center in Huntersville, NC. According to Zipline and Novant, this will be the first authorized long-range drone logistics delivery flight program in the US.

Other technologies that have ramped up during coronavirus are warehouse automation and robots. US apparel chain Gap is one company that is speeding up its rollout of warehouse robots for assembling online orders. The basic premise is to use robots to reduce the amount of human contact with orders during the pandemic. Initially, Gap had reached a deal to triple the number of robots in its warehouses by the fall. However, once the pandemic hit and the company was forced to close all of its stores (plus those of Bana Republic and Old Navy), its warehouse was soon overwhelmed with online orders. So, Gap had Kindred AI, the seller of the robots, expedite the order to get them in the warehouse as soon as possible. Each machine handles work typically performed by four people and has been a key component to fulfilling online orders in a timely manner.

Last month, Airlines for America, a trade association representing the airline industry, filed paperwork to allow passenger airlines to carry cargo in seats that were empty. This was in response to the limited cargo capacity available and skyrocketing prices associated with air cargo. The Federal Aviation Administration (FAA) will allow the exemption, thus allowing cargo to be carried on the seats in the cabin of a passenger airplane if there are no passengers on board. The FAA said that the decision is meant to facilitate the movement of goods during the coronavirus pandemic. Airlines for America had asked for the exemption to remain valid until April 30, 2022, but the FAA said it will only hold through Dec. 31, 2020. The agency said the provision can be extended “if warranted and under appropriate conditions and limitations.”

Supply chains continue to be disrupted by the coronavirus pandemic. And for many food manufacturers, this is causing all sorts of problems when it comes to sourcing ingredients. The food industry had asked the US Food and Drug Administration to grant it flexibility over food labeling requirements as a result. The FDA has approved the request, granting temporary labeling flexibility for non-allergen ingredients. According to the FDA, food manufacturers may make minor formulation changes that may cause the finished food label to be incorrect, but do not pose a health or safety risk. The minor changes should not cause adverse health effects such as allergens or sensitivities, must not be a major ingredient (it must be less than 2 percent of the final weight of the food), and cannot be a characterizing ingredient.

The grocery home delivery market continues to explode globally. In more and more countries, demand is far outpacing supply. And in Australia, this is certainly the case. For the two largest grocery chains in Australia, Woolworths and Coles, demand at the beginning of the coronavirus pandemic was so overwhelming that they both shut down their own home-delivery services. To meet demand, both companies turned to last mile delivery startups to reach their consumers. While they have since reinstated their own private fleets of delivery trucks, the use of crowdsourced delivery partners has allowed them to double their capacity. The main players in Australia are Drive Yello, Sherpa, Uber, and 13 Cabs. To put the volume in perspective, Drive Yello made 120,000 deliveries last month, up from 40,000 deliveries a month before the pandemic hit.

Truck tonnage plunged 12.2 percent in April, marking the largest monthly decline in 26years. The last time there was a decline this large was in April 1994, and that was caused by a labor strike. According to American Trucking Association (ATA) Chief Economist Bob Costello:

“Considering that April factory output and retail sales plummeted, the large drop in truck freight is not surprising. However, not all fleets saw large declines in April. Those hauling food for grocery stores and those involved in the online retail supply chain outperformed most other fleets. Some fleets witnessed very large declines in freight last month. These historic declines show just how much trucking was impacted by our national response to the COVID-19 pandemic.”

Speaking of plunges, forty containers have fallen off the APL England off the coast of Australia. The Australian Maritime Safety Authority (AMSA) said the APL England experienced a loss of propulsion amid heavy seas shortly after 6am Sunday about 45 miles southeast of Sydney. The ship’s power was restored quickly, but as it was rolling heavily, multiple container stacks collapsed, and several went overboard. Besides the forty containers that were lost overboard, and seventy-four more were damaged. The contents included facemasks and medical supplies, which have since begun washing ashore between Magenta Beach and The Entrance in New South Wales.

That’s all for this week. Enjoy the weekend and the song of the week, R.E.M.’s Man on the Moon.

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