This Week in Logistics News (August 22 – 28)

I woke up yesterday morning and brought the trash outside as usual, and something occurred for the first time in months – I felt cold. Not to mention that the morning dew had not burned off and the shadows from the trees covered much more ground than I recently noticed. Some people see the fall as relief from the oppressive temperatures of the summer. Not me. Years of positive experiences, fun summers off from school, vacationing, and playing baseball, far outweigh the negatives from a few oppressively hot days during the season. But fall is good too. Halloween, football, baseball playoffs, and apple picking, to mention a few of my favorite activities. And now on to this week’s logistics news:

With Hurricane Laura quickly approaching, nearly half of the oil and gas platforms (production platforms) in the Gulf of Mexico – almost 300 – were evacuated by Wednesday, along with most of the offshore rigs (drilling). The BSEE stated that approximately 84 percent of the current oil production in the Gulf of Mexico has been shut, and that personnel have been evacuated from 10 of the 12 non dynamically positioned rigs in the Gulf, while 8 of the 16 dynamically positioned rigs have been moved out of the storm’s path. Although oil and gas production has been disrupted, it is considered unlikely that it will cause substantial supply shortages due to ample inventories and available supply from alternate sources.

And I thought I was the only one placing online orders from Dick’s Sporting Goods. The company reported that second quarter online sales increased 194 percent. That’s right, almost 3x the online sales from Q2 2019. Including curbside pickup. e-commerce penetration for the second quarter of 2020 accounted for approximately 30% of total net sales. CEO Ed Stack stated ““During this pandemic, the importance of health and fitness has accelerated and participation in socially distant, outdoor activities has increased. There has also been a greater shift toward athletic and active lifestyle product with people spending more time working and exercising at home.”” I guess so. I wouldn’t have guessed these results six months ago. I am interested to learn about Dick’s warehousing and fulfillment strategy to support what may turn out to be a sustained increase in demand.

The Australian state Victoria is currently in a stage 4 coronavirus lockdown and this is causing a surge in parcel delivery volumes and major delivery delays. Parcel volumes for the second week in August were up 186 percent compared to the same period last year. Meanwhile, Australia Post’s facilities in Victoria are not running at full capacity due to the stage 4 restrictions. Although not mentioned in the article, I wonder if the weather (it is winter in Australia) and the resulting increased time indoors has exacerbated the coronavirus outbreak in this more temperate region of the country.

Amazon announced it is adding more than 1,800 electric vehicles from Mercedes-Benz Vans to its delivery fleet in Europe this year. Mercedes-Benz also announced that it has joined The Climate Pledge, a commitment to meet the Paris Agreement 10 years early that was founded by Amazon and Global Optimism. Amazon’s Delivery Service Partners will have access to the new fleet of zero-emission vehicles to make deliveries to customers in Europe this year. More than 1,200 EVs in the order will be for the new Mercedes-Benz eSprinter. The remaining 600 vehicles will be comprised of the manufacturer’s midsize electric van, the eVito

Gap, Inc. announced in its second quarter earnings that it sold $130 million in face masks during the quarter, representing what I consider to be an impressive example of supply chain agility. Company sales for the quarter fell 18 percent from the same period last year. However, e-commerce sales nearly doubled. The Athleta brand achieved the highest growth rate of 6 percent, driven by a 74 percent increase in online sales. Meanwhile, fulfillment costs increased and contributed to a 3.8 percent reduction in gross margin. Interestingly, I recently spoke with an executive from Kindred AI about its robotic sorting solution. Gap is a flagship customer for Kindred AI and I am interested to learn more about Gap’s plans for adapting to the company’s increased direct-to-consumer fulfillment requirements.

XYZ Robotics, a Boston-based robotics company announced that it has closed series A+ funding of close to $20 million to scale it AI-driven piece picking. XYZ Robotics said it recently took only two weeks to integrate, test, and fine-tune a piece-picking station at a leading logistics warehouse. XYZ said it is it combining hardware and software for e-commerce, mixed-load palletizing and depalletizing, and high-speed industrial kitting. Source Code Capital led the Series A+ round, which was oversubscribed by Gaorong Capital and Morningside Capital.

Maersk invested $1 million in digital road freight platform Ofload (formerly called Loadsmile). The company launched earlier this year and its road freight platform tackles inefficient empty container moves and idle time by live-matching cargo owners with small to medium-size transport operators. Ofload has 700 carriers on the platform operating a combined fleet of 15,000 trucks nationwide. Maersk Growth venture partner Jeppe Høier said Ofload’s solution that fits with Maersk’s container logistics integrator strategy.

 

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