This Week in Logistics News (August 15 – 21)

logistics newsAbout a month and a half ago, I wrote about a trend sweeping Facebook nation: “Top 10 Albums that Influence Your Taste in Music.” And as I wrote, there are certain bands that define specific eras of my life. One of the biggest bands in my life over the last 40 years has been Metallica. I just saw an interview on the Howard Stern Show with the band where they talked about the difference between Metallica and the typical “80’s Metal Bands” and how the band needed to differentiate itself from those bands, mostly because the sound just did not compare. Metallica is also one of those bands that I have never seen in concert. And now the coronavirus pandemic has changed the nature of live music. But Metallica is getting ready to take the stage again, with the launch of their big Drive-In Concert Experience at the end of month across the country. While it won’t quite the same as a normal concert experience, it does me a chance to see them live (sort of). And now on to this week’s logistics news.

logistics newsAs supply chain sustainability continues to become more top of mind, Unilever is stepping things up on the ice cream front. Palm oil is one of the most important raw ingredients in Unilever’s products, and one that has been under quite a bit of scrutiny lately. The company is planning to use a new geo-location technology to make its palm oil supply chains more transparent and tackle a farm-to-table traceability problem that has plagued the industry for decades. The maker of multiple ice cream brands will use cell phone geo-location data to track palm oil moving across thousands of supply chains and to achieve the elusive “first-mile” traceability. Following a pilot in Indonesia, Unilever is scaling up that approach to cover all palm facilities in Southeast Asia, including farms, refineries and processing plants.

logistics newsPalm oil transparency is not the only sustainability measure Unilever is taking for its ice cream brands. The company’s ice cream brand Magnum says it is going to use more than 7 million ice cream tubs made with recycled plastic. Magnum conducted a pilot with the recycled-content polypropylene (PP) tubs in Spain, Belgium and the Netherlands in 2019. This is all part of Unilever’s wider global packaging commitment to halve the company’s use of virgin plastic, including by accelerating its use of recycled plastic by 2025. According to Unilever, “the full roll out across all European countries is another exciting step toward a more sustainable future. By the end of 2020, Magnum will use an estimated 160,000 kilograms (more than 176 tons) of recycled-content plastic material.”

We have written about Amazon’s move to build out its logistics network over the last few years. The current coronavirus pandemic has helped to speed up the process. Amazon is taking more control over its last mile deliveries, expanding its fleet of vans and looking to introduce larger UPS and FedEx style trucks soon. According to data from ShipMatrix, Amazon shipped 415 million packages in July compared with a monthly average of 389 million between April and June. As the number of packages shipped has increased, so has the percentage of packages delivered by Amazon. In July alone, Amazon delivered 66 percent of its own packages, compared to 61 percent between April and June. And this is a trend that will continue to grow.

In a potentially related note, more than 1,200 Amazon delivery drivers have been laid off in recent months after the company cut contracts with several small delivery companies across the country. Amazon informed at least seven firms that are a part of its delivery service partner (DSP) program that it was severing their contracts. Amazon’s DSP program, launched in 2018, has allowed the company to quickly scale up its last-mile delivery capabilities and compete with shipping partners such as UPS and FedEx. It will be interesting to see how much the company will focus on private fleet from here on out.

Following the announcement by UPS a few weeks ago, FedEx is also imposing extra fees onto customers during its holiday peak season as it prepares for a surge in residential deliveries. The company said that customers who meet a certain volume threshold will be charged a Peak Residential Delivery Charge for certain packages shipped anytime between November 2 and January17. They include fees as much as $2 on all packages shipped in the week after Thanksgiving for FedEx’s lower-priced SmartPost service, which is generally used by large retailers. FedEx will also charge as much as $5 a package on its premium Express service for large shippers whose volume far exceeds normal levels.

As the race for a coronavirus vaccine continues to heat up, the big question is how do we distribute the vaccine? The US government has chosen medical supplier McKesson to be a centralized distributor for future COVID-19 vaccines, a crucial step in creating a pipeline to get any eventual vaccines into American arms and stop the pandemic. McKesson is a major distributor of pharmaceuticals and medical supplies based in Irving, TX, and has an existing contract option with the CDC to support vaccine distribution in the event of a pandemic. President Donald Trump announced the collaboration, saying the United States had three vaccine candidates in Phase 3 clinical trials, and logistically, the country has to be ready to distribute them.

As if we didn’t have enough concerns over how coronavirus can be spread, frozen food jumps into the mix. Two cities in China have found traces of the new coronavirus in cargoes of imported frozen food. A sample taken from the surface of frozen chicken wings imported into the southern city of Shenzhen from Brazil, as well as samples of outer packaging of frozen Ecuadorian shrimp sold in the northwestern city of Xian, have tested positive for the virus. Clearly the discovery of coronavirus on frozen food raises concerns about how the disease can spread on surfaces and enter the food chain. While some viruses can survive up to two years at temperatures of minus 20 degrees Celsius, the World Health Organization has downplayed the risk of the virus entering the food chain. This should be fun to watch.

A few months ago I wrote that COVID-19 is driving alcohol sales. And as home delivery continues to become more important, more retailers are jumping on the alcohol delivery bandwagon. Tops Friendly Markets is now allowing customers to add alcohol to their online orders for either curbside pickup or home delivery. The new addition, powered by Instacart, is available at Tops stores in New York state that already offer e-commerce services. Customers will be asked to provide a valid driver’s license in order to close out their order whether it is a curbside pickup or a home delivery. Deliveries will not be left at a customer’s residence until this transaction is completed.

That’s all for this week.  Enjoy the weekend and the song of the week, my favorite song from Metallica, Orion.

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