Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

Amazon announces small modular reactor deals with Dominion, X-energy, Energy Northwest

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Amazon is making significant investments in nuclear energy, focusing on Small Modular Reactors (SMRs) as part of its goal to achieve net-zero carbon emissions by 2040. Following recent clean energy initiatives by Google and Microsoft, Amazon has partnered with X-energy to bring over 5 GW of new nuclear power online by 2039. The company plans to deploy SMRs at multiple locations, including four 80-MW reactors at Columbia Generating Station and a potential 300-MW plant near Dominion Energy’s North Anna nuclear station. These efforts aim to support Amazon’s operations with clean energy while advancing nuclear technology. Amazon has signed three agreements to support the development and deployment of small modular reactors in the United States. Amazon entered into a deal with Energy Northwest, a consortium of 29 public utility districts and municipalities across Washington, to deploy four reactors developed by X-energy that will together generate approximately 320 MW of electricity beginning in the early 2030s.

Read More Here: Amazon Announces Small Modular Reactor Deals with Dominion, X-energy, Energy Northwest 

How Autonomous Delivery Vehicles Are Redefining Last-Mile Logistics

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Autonomous delivery vehicles (ADVs) are bringing significant changes to last-mile logistics, an essential component of the supply chain. With the rising demand for faster and more cost-effective deliveries, ADVs are becoming a viable solution to a variety of logistical challenges. For professionals in logistics and supply chain management, understanding the implications of this technology is crucial, as it has the potential to fundamentally change the way goods are transported and delivered.

The Technology Behind Autonomous Delivery Vehicles

Autonomous delivery vehicles rely on a number of technologies to operate effectively:

  • Artificial Intelligence and Machine Learning: These systems allow ADVs to navigate streets, assess obstacles, and optimize delivery routes. Machine learning improves the vehicle’s performance by analyzing data from past deliveries and refining its operations.
  • LIDAR and Sensors: LIDAR (Light Detection and Ranging) and other sensors, such as cameras and radar, help ADVs detect their surroundings in real time. These technologies ensure that the vehicle can avoid obstacles, follow traffic rules, and make decisions about its environment.
  • High-Precision GPS: Accurate navigation is essential for deliveries, and high-precision GPS systems ensure that ADVs reach the correct destination efficiently.
  • Cloud Computing: The data collected by ADVs is processed through cloud platforms, enabling real-time communication, route adjustments, and fleet management.
  • 5G Connectivity: The speed and low latency of 5G networks allow ADVs to communicate with infrastructure and other vehicles in real time, improving safety and operational efficiency.
  • These technologies work together to create autonomous delivery systems that can manage the complexities of urban and suburban logistics.

Strategic Benefits

For companies that integrate autonomous delivery vehicles into their operations, benefits include:

  • Cost Savings: Autonomous vehicles reduce the reliance on human drivers, which can significantly lower labor costs. Additionally, many ADVs are battery powered, use of the electric vehicles leads to significantly lower fuel and maintenance expenses.
  • Operational Efficiency: ADVs can operate continuously, increasing the number of deliveries made in a shorter period. These vehicles also optimize routes, in near real-time, to minimize travel time and energy use, improving overall efficiency.
  • Environmental Impact: Many autonomous delivery vehicles are battery powered, thus reducing emissions compared to traditional fuel-powered vehicles. This contributes to a lower environmental footprint, particularly in urban areas where transportation-related air pollution is a concern.
  • Traffic and Congestion Management: ADVs, especially smaller models such as delivery robots, are better configured to navigate congested urban areas rather than traditional trucks. Drones, another form of ADVs, bypass road traffic entirely, further easing congestion.
  • Improved Delivery Accuracy and Customer Experience: Autonomous systems can provide accurate delivery windows and real-time tracking, which aligns with customer expectations for faster, more transparent delivery services.

Real-World Applications

Several companies have already started using autonomous delivery vehicles in practical scenarios:

  • Amazon has launched its “Amazon Scout” autonomous robot, which delivers packages to customers. Amazon is also testing drone-based deliveries through its “Prime Air” program.
  • Nuro has developed an autonomous vehicle designed for transporting groceries and small packages. Nuro’s vehicles are being evaluated by retailers such as Walmart and Kroger.
  • Starship Technologies operates fleets of delivery robots in various cities, handling deliveries for food, groceries, and parcels. These robots navigate sidewalks and make deliveries in short-radius urban areas.
  • FedEx and UPS are also exploring autonomous delivery technologies. FedEx has developed Roxo™, the FedEx SameDay Bot for local deliveries, while UPS has experimented with drone deliveries, particularly in rural locations.

These implementations demonstrate that autonomous delivery technology is not hypothetical but is being tested and used in real-world settings.

Challenges and Considerations

While the benefits of autonomous delivery vehicles are clear, several challenges must be addressed:

  • Regulatory Issues: Regulatory frameworks for autonomous vehicles vary across regions. There are continuing discussions around safety standards, liability, and operational guidelines. Companies need to work closely with regulators to navigate this evolving landscape.
  • Safety: Although the technology behind ADVs is improving, safety concerns remain, particularly in busy urban areas. Pedestrians, cyclists, and other road users need to be protected, and ADVs must be thoroughly assessed to ensure they can manage unexpected situations.
  • Workforce Impact: The deployment of ADVs may reduce the demand for human drivers, raising concerns about job displacement. Companies need to consider how to manage this transition, through workforce retraining or by creating new roles related to managing and maintaining autonomous fleets.

Future of Last-Mile Logistics

The use of autonomous delivery vehicles in last-mile logistics will continue to expand as the technology matures and regulatory barriers are addressed. Companies that adopt ADVs can expect reductions in operational costs, improvements in efficiency, and lower environmental impacts. However, integrating these systems will require careful planning, particularly regarding regulatory compliance and managing workforce changes.

As logistics companies assess long-term strategies, it is essential to consider how autonomous technology fits into their broader operations. In the future, ADVs will become an integral part of the logistics ecosystem, offering an interesting new way to address the challenges of last-mile delivery.

With the potential to reduce costs, improve efficiency, and mitigate environmental impacts, ADVs present a viable solution to many of the challenges currently facing the logistics industry. However, companies must also navigate regulatory hurdles and manage the impact on their workforce as they integrate this technology into their operations.

For industry professionals, the task is clear: understand the technology, assess the benefits, and plan for its implementation in a way that aligns with broader organizational goals. The future of logistics is increasingly automated, and companies that are prepared for this shift will be in a stronger position to compete and lead.

Watch Jim’s video on “How Autonomous Delivery Vehicles Are Redefining Last-Mile Logistics”, right here:

https://www.youtube.com/watch?v=jBgswAkxrM4

 

Amazon Supply Chain Innovation Continues

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Amazon supply chain

Three years ago, my colleague Steve Banker wrote an article about the Amazon supply chain, asking if it was the most innovative in the world. In the article, he wrote about Amazon Relay, the acquisition of Whole Foods, Amazon the carrier, and the expansion of its warehousing capabilities. As the world is in year two of the Covid pandemic, and the supply chain landscape has changed, it is time to revisit Amazon’s supply chain and see how it has changed and how prepared it is for the future.

Amazon continues to grow and adapt with the changing world. And the company’s operations and technology have evolved over the last three years, with a focus on its trucking, warehousing, and air capabilities. How do each of these drive the Amazon supply chain?

Amazon Trucking

Amazon supply chain

Over the last few years, Amazon has continued to expand its private fleet of long haul and last mile delivery trucks. The end goal is to reduce or eliminate its reliance on UPS, FedEx, and the USPS to make deliveries, thus becoming more profitable while controlling the customer experience.

While Amazon has rolled out its own digital freight matching marketplace named Amazon Freight, the company is always looking at new opportunities in this area. One way is to build its own pool of drivers, and to do this, the company is reportedly building an incubator for startup trucking companies. Essentially Amazon is recruiting hundreds of people to start trucking companies and only drive for Amazon. The incubator will provide business training and loans for entrepreneurs to start their own trucking companies.

According to sources, the incubator is not about tackling the challenges of today’s capacity crunch. Instead, the program is about looking at the future and where that demand will be, and how Amazon can take control of it with an in-house solution.

Amazon is also investing in the future of its trucks by exploring more sustainable fuels. The coronavirus pandemic helped push e-commerce to new levels; but as e-commerce sales soared, so too did heavy duty trucking on the roads to get goods to their final destination. And that increased congestion and pollution. Amazon is looking ahead at reducing carbon emissions in its fleet by upgrading to natural gas class 8 trucks. The company has ordered more than 700 compressed natural gas class 6 and class 8 trucks so far, as it looks to introduce new sustainable solutions for freight transportation. Amazon is working on testing a number of new vehicle types including electric, CNG, and others. The engines, supplied by a joint venture between Cummins Inc and Vancouver-based Westport Fuel Systems Inc, are to be used for Amazon’s heavy-duty trucks that run from warehouses to distribution centers.

Amazon has never shied away from making controversial decisions, and the latest technology the company is developing for its trucks fits squarely in this category. Last month, Amazon announced that it plans to equip its branded delivery vans with cameras powered by artificial intelligence. The cameras, which will always be on, are being promoted as an effort to improve driver safety. However, many workers and privacy advocates are concerned about drivers being continuously subjected to surveillance and data gathering.

The cameras, which run on Netradyne’s Driveri platform, are intended to improve safety for drivers and the community they are making deliveries in. Each camera system has four HD lenses to sense road conditions, driver speed, and collision detection technology. And while the cameras will be rolling at all times, Amazon has said that footage will only be uploaded if the driver triggers one of 16 actions, such as running a stop sign or speeding.

Amazon Warehousing

Amazon has spent years cultivating its logistics network to move items around the world as fast and as cost efficiently as possible. Part of speeding up delivery is to make sure that not just large cities have fulfillment centers in place. Amazon is building out a network of delivery stations in an effort to “blanket the suburbs.” The delivery stations are the final link in Amazon’s supply chain that begins with its large regional fulfillment centers. The delivery stations are smaller terminals that will receive Amazon goods and ship them out to end consumers. The company plans to open 1,000 parcel delivery stations in the near future.

This model is not just about speeding up deliveries in the US, however. At the beginning of the year, Amazon announced plans to open five new facilities in Quebec to speed up its delivery process. The company will add two sorting centers and its first three delivery stations in the province. Overall, the new facilities will create about 1,000 new jobs. The sorting centers will be located in Coteau-du-Lac and Longueuil, while the delivery stations will be located in Laval and Lachine.

The Covid pandemic has certainly been a boon to Amazon’s business. However, not all warehouse employees have been happy with the working conditions. This was especially true at the beginning of the pandemic when social distancing guidelines were first put into place. As a result, Amazon launched cameras and software within its warehouses to detect if and when an employee was violating social distancing rules. This type of software is still a work in progress as more people are vaccinated and guidelines are ever changing.

One of the biggest fears of warehouse workers is that full-scale automation will put them out of work. However, as most companies will say, and Amazon is no exception, robots and cobots are there to make things easier for employees. Amazon continues to invest in robots for its facilities, helping to remove menial and time-consuming tasks from workers so they can focus on other tasks. As things stand, Amazon sees fully automated shipping warehouses as a decade or so away. While Amazon will continue to invest in robots, they are also investing in their human counterparts.

Amazon Prime Air

For the last four years, Amazon has been aggressively investing in its air capabilities. What was formerly known as Amazon Prime Air, Amazon Air is a cargo airline operating exclusively to transport Amazon packages. The company has been acquiring jets to build out its fleet as it also awaits the completion of its air hub at Cincinnati/Northern Kentucky International Airport. As of this writing, Amazon’s fleet consisted of 22 Boeing 737-800’s and 55 Boeing 767-300ER’s, with another 9 aircraft on order. Amazon has also spent $131 million to acquire about 13.5 million shares of Air Transport Services Group (ATSG).

Cargo planes are not the only piece of Amazon’s aerial plans for the future. Drones are a big part of the future of Amazon, something Jeff Bezos has been touting for the last seven-plus years. In September of last year, Amazon took a big leap forward in its quest to use the autonomous flying vehicles as part of its home delivery strategy. The Federal Aviation Administration (FAA) designated Amazon Prime Air an “air carrier,” which allowed Amazon to begin its first commercial deliveries in the US under a trial program. There are still a number of regulatory hurdles that Amazon must clear before it begins making home deliveries, but this is clearly a step in the right direction for drone usage. Amazon joined Wing, the Alphabet Inc. subsidiary, and UPS as companies that have gotten FAA approval to operate under the federal regulations governing charter operators and small airlines.

And Amazon clearly sees drones as a big part of its future, based the amount of research and development it is putting into its drone program, especially in Europe. According to a story published last week, Amazon has doubled the number of staff employed by its Cambridge-based Prime Air team, where the company is developing its drone delivery service. This brings the total number of staff to nearly sixty in Cambridge; Amazon also has research tech hubs in London and Edinburgh. Amazon said last summer it was aiming to begin launching the drone service ‘within months’, announcing that the aircraft could travel up to fifteen miles and deliver packages under five pounds to customers in less than thirty minutes.

Final Thought

The Amazon supply chain continues to be one of, if not the most, innovative in the world. The company is investing in its trucking capabilities to reduce its reliance on other carriers. Amazon is also continuing to expand its warehouse technology and capabilities to make picking, packing, and shipping orders more efficient. And it is heavily investing in taking to the skies, with an emphasis on cargo planes and drones. It will be interesting to see where the Amazon supply chain goes from here.

This Week in Logistics News (May 23 – 29)

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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.

Amazon, FedEx, and UPS Prepare for the Post COVID World

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post COVIDOn Monday, my home state of Massachusetts announced the official details regarding the state’s four-phase plan to re-open the economy during the coronavirus pandemic. Phase 1 comes in a two-wave approach, with some business opening immediately and others opening on May 25. One group that found the approach disappointing is retailers. Many Massachusetts retailers see this plan as potentially too little too late. According to the new guidelines, nonessential retail stores will be allowed to open for curbside pickup, as well as remote fulfillment, on May 25. However, opening stores to the general public for browsing will be part of phase 2, which does not have a firm date as of now. With this announcement, e-commerce will continue to be vital for retailers looking to remain open. This will put added strain on Amazon, FedEx, and UPS to keep up with customer demands. But, the last two months, combined with the coming months will help each of these companies to succeed in the post COVID world.

E-Commerce and the Post COVID World

E-commerce is certainly booming right now as many brick and mortar retail locations remain shuttered. Nonessential retailers are beginning to open up across the country, but e-commerce is still seeing a surge. Amazon and Walmart have collectively hired nearly 500,000 employees to meet the growing needs of e-commerce fulfillment, notably in the warehouse and on the road. However, with the increase in e-commerce sales comes concerns over capacity constraints. In turn, many customers have seen long delays in order fulfillment.

These delays can also be attributed to supply chain networks being overwhelmed. The demand is outpacing the supply right now for capacity and picking volumes. Plus, for many retailers, there were planned delays for those items that were considered nonessential. However, now that the country has had a few months to adjust to the new normal, nonessential items are making their way back to the forefront of ordering queues. And companies are preparing for the reality of the post COVID world.

Amazon and the Post COVID World

Amazon saw an uptick in business from the beginning of the coronavirus pandemic. One of the biggest surges for Amazon was in online grocery orders. The demand became so extreme that the company was forced to stop accepting new Whole Foods delivery customers as it simply did not have the capacity to meet the demand.

post COVIDOver the years Amazon has been building out its private logistics network, with a keen eye on moving past a reliance on FedEx and UPS for home deliveries. The coronavirus pandemic has seen the company’s private fleet grow. In fact, it seems that until recently, most of my Amazon orders were delivered by either FedEx or UPS. Now however, every order I get is delivered by an Amazon branded delivery truck, and I see them rolling through my neighborhood all day every day. By comparison, FedEx and UPS trucks have been seen less frequently, at least in my neighborhood that is. One of the concerns with ordering packages has been the social distancing aspect. And for delivery drivers, this is certainly a concern. Rather than collecting a signature or even knocking on my door to give me my package, Amazon drivers have been taking a picture of the item on my doorstep, which is then emailed to me as proof of delivery. For Amazon, and the rest of home deliveries, this seems like it will be a staple of the post COVID world.

One area of concern for Amazon was the long delivery timeframes customers were experiencing for nonessential items. This stemmed from the demand surge at the beginning of the coronavirus outbreak. However, the company has seen the light at the end of the tunnel in terms of delivery timeframes. Amazon has said that customers can expect the usual one and two-day delivery timeframes to return imminently and service levels will get back to normal. This is good news for both consumers and the company, as more and more consumers were beginning to look elsewhere for items they would normally order from Amazon. The company lifted restrictions on the amount of inventory that suppliers can send to its warehouses indicating that it is back to business as usual.

As part of its long-term post COVID world plans, Amazon showed a glimpse of a virus killing robot it is developing that would roll through grocery stores and distribution centers, using banks of ultraviolet light to kill viruses on surfaces. While the company has indicated that this is something they are working on for the future, it is safe to say that the product would be a welcome one for most retailers and manufacturers. And while the technology already exists, it is not surprising that Amazon is working on its own model.

FedEx and the Post COVID World

post COVIDFedEx is also making plans to succeed in the post COVID world. One way to ensure delivery timeframes is to make sure that the logistics network is not overwhelmed. And sometimes to do this, companies need to pump the brakes. That is exactly what FedEx did recently to make sure it could deliver on customer expectations. As e-commerce demand surged, the company limited the number of items that retailers could ship from certain locations such as stores. These limits were only a temporary order, but they were specifically designed to make sure that the network did not get overwhelmed. It is this type of transparency that can go a long way.

The biggest news for FedEx for the post COVID world is its announcement of a new partnership with Microsoft. Just a few months ago FedEx canceled its partnership with Amazon, Microsoft’s biggest competitor when it comes to cloud services. Now, FedEx is teaming up with Microsoft on a multi-year partnership that combines FedEx’s logistics network with Microsoft’s cloud. The first service, FedEx Surround, will give real-time analytics into the supply chain and delivery. The offering will be available later this year and will collect data through FedEx’s IoT platform. This data will be analyzed using Microsoft’s technology services to help predict potential delivery disruptions due to weather, congestion, or other issues. This enables companies to re-route items and alert customers of potential delays.

FedEx is also hiring drivers to keep with the growing demand of e-commerce. According to FedEx CEO Frederick W. Smith, the company has been hiring about 4,000 drivers per week for its FedEx Ground unit. Assuming that e-commerce does not see a significant drop as brick and mortar retailers re-open, this is a step towards making sure that delivery timeframes can be met in a post COVID world. The bigger question is whether FedEx will have the warehouse capacity to keep up.

UPS and the POST COVID World

post COVIDUPS has taken some steps recently that will align well with the post COVID world as well. As the interest and use cases grow for drone deliveries, UPS set up a program to deliver essential items during the pandemic. UPS will use drones to fill prescriptions for residents of The Villages in Florida, one of the country’s biggest retirement communities. The deliveries will come from a CVS store about a half mile away and will mark the first paid residential deliveries by UPS’s drone unit Flight Forward. The drones will drop the prescriptions to a central location, where a Flight Forward employee will ferry them by golf cart to homes. This program could be a model for future drone deliveries of essential items to at risk communities.

During the current pandemic, UPS has also expanded the use of its UPS My Choice program. UPS My Choice allows business and residential users to manage their delivery schedules by rerouting or rescheduling deliveries, get estimated and confirmed delivery windows, tracking and managing multiple packages at once, receiving real-time alerts, following deliveries on a map, leaving instructions for the driver, and routing packages to a UPS Access Point instead of home delivery. This program helps the consumer to get the package when and how they want in the most socially responsible manner possible.

On top of the My Choice program, UPS has also made changes to its signature requirements, which could certainly be the method of the future as well. The company has eased guidelines on the types of packages that need a signature. However, for those deliveries that do still require a signature, UPS is taking a novel approach. Drivers will leave a sticky note on the door before moving back a safe distance. Once the customer has signed the form, the driver will wait for the customer to leave and then retrieve the form. This could certainly be how signatures are handled in the new post COVID world.

Final Thought

The post COVID world will likely look a lot different than what we experienced just a few short months ago. As economies begin to open, restrictions abound and are likely to remain in place until a vaccine is created and administered across the country. In this post COVID world, the supply chain will continue to be a key cog in ensuring that the economy can function, and home deliveries will be the new normal for more and more of our retail needs. To that end, Amazon, FedEx, and UPS have put changes in place to deal with the changing nature of customer demands and interactions. These changes, which include drones, virus killing robots, private fleets, logistics partnerships, and more choices for customers have put each of these companies in a position to continue to thrive in the post COVID world. We will have to wait and see just what that world looks like though.

This Week in Logistics News (May 9 – 15)

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supply chain newsAs the world continues to turn during the coronavirus pandemic, we are all adjusting to the new normal. However, what that new normal will ultimately look like is still an unknown. But for now, there are certain things that we are getting used to, such as social distancing and wearing face covers. But how will businesses adjust to the new normal? I’ve seen a bunch of articles this week about what businesses are considering. According to the CEOs of Burger King and Popeyes, face masks may become part of the new uniform. Tim Hortons will widen the space between tables and sanitize them, as well as chairs, after each use. It will also limit the number of customers allowed at any given table to no more than four. Retail stores will also have to adjust accordingly, with wider aisles, face coverings, and better sanitation. Things will continue to evolve and so will our new normal. But for now, let’s move on to this week’s logistics and supply chain news.

supply chain newsA couple of weeks ago, my colleague Steve Banker wrote an article about companies using virus killing robots in plants and warehouses. According to the article, “UV light, at a particular wavelength, has a germicidal effect. The light energy destroys the DNA structure of all microorganisms.” The robots have been around for 50 years, mainly used in sewage plants. But, with COVID-19 disrupting the global economy, interest in the robots is gaining traction. In a segment on 60 Minutes, Amazon showed a video of a robot it is developing that would roll through grocery stores and distribution centers, using banks of ultraviolet light to kill viruses on surfaces. This was the first glimpse of the technology that the company has previously hinted at. The segment describes Amazon’s UV-emitting robot as “something they’re working on for the future,” without providing a timeline or other details.

supply chain newsAmazon apparently sees the light at the end of the tunnel and has said that one and two-day deliveries that customers have come to expect should return in the coming weeks. The company has implied that it has caught up from the demand surge that stemmed from the coronavirus outbreak. Amazon has lifted restrictions on the amount of inventory that suppliers can send to its warehouses. With more on-hand inventory, orders can be turned around quicker and meet the one and two-day delivery timeframes. The ability to revert to the quicker timeframes brings about two key benefits. First, customers that were seeing long delivery times and looking elsewhere will likely come back. And second, with reduced delivery timeframes, there is less chance of merchants defecting from its logistics service.

Coronavirus has put added stress on the global supply chain, and as mentioned above, has put added strain on delivery capacity. As a result, FedEx has limited the number of items that retailers can ship from certain locations such as stores. COVID-19 has brought about a surge in online shopping that rivals the holiday season. Shippers and carriers plan well in advance for the holiday surge; there was not time to plan for the coronavirus surge, however. In order to ensure that its network is not overwhelmed, the company has put these limits on a number of retailers that had turned stores into mini warehouses to fulfill online orders. The limits vary at each location and are only temporary. The list of retailers includes Kohl’s, Belk, Neiman Marcus, Nordstrom, Abercrombie & Fitch, Bed Bath & Beyond, Hobby Lobby, Eddie Bauer, and other sellers like Groupon and Young Living Essential Oils.

The Centers for Disease Control and Prevention (CDC) has issued guidelines tailored to help long-haul truck drivers and their employers deal with the COVID-19 pandemic. The majority of the guidelines echo what the CDC has recommended for the general population since the outbreak first hit such as social distancing, proper and frequent hand washing, and the use of personal protective equipment. However, it also offers specific guidelines aimed at truckers, such as frequent cleaning and disinfecting of the driver door handle, steering wheel, seat belt and buckle, arm and headrest, seat covers, turn signals, wiper controls, dashboard, air ducts, radio, and temperature controls. In the sleeper berth, light switches, mattress trays, temperature controls and other flat surfaces should be cleaned frequently as well. The complete list of recommendations can be found here.

Federal regulators have extended broad exemptions from hours-of-service (HOS) rules for drivers hauling freight deemed essential during the COVID-19 pandemic until June 14. Carriers and drivers hauling freight that supports COVID-19 relief efforts have been granted emergency relief from Parts 390 through 399 of federal motor carrier regulations, which includes HOS rules. The exemption was soon expanded to include raw materials and other cargo considered essential to coronavirus pandemic relief. This extension marks the second extension by the Federal Motor Carrier Safety Administration (FMCSA). The original extension would have expired today.

As consumers are still trying to avoid stores as much as possible, Walgreens is bringing a fast food fulfillment model to some of its pharmacies. The company is bringing its buy online, pick up in store operation for a limited selection of products to its 7,300 pharmacies that have drive thrus. The selection includes more than 100 items such as cleaning supplies, paper goods, over-the-counter medicines, first aid supplies, and baby formula. The number of products has increased from 60 in March, although these items could not previously be pre-ordered online. A Walgreens spokesperson said customers are not required to have a prescription in order to use the new drive thru pickup service. However, a press release noted pricing for drive-thru orders may differ from in-store items.

Walgreens isn’t the only company expanding its prescription fulfillment services. Publix is expanding its home delivery options as well. The company already has a partnership with Instacart for curbside and home delivery. But, in a new partnership with ScriptDrop, Publix is offering home delivery of prescriptions. The partnership offers prescription delivery within a 5-mile radius of each in-store Publix Pharmacy. The service comes with a $5 fee, but there is no limit on the number of prescriptions ordered. Deliveries take place on weekdays after 2 PM, and to receive same-day delivery, orders must be placed by 11 AM. Customers who receive a text message when prescriptions are ready will receive a link to prepay for their prescriptions and choose delivery. Age-restricted products, controlled substances and prescriptions needing refrigeration are excluded.

As home delivery continues to heat up, Uber is looking at ways to expand its business. The company reportedly has made an offer to acquire meal delivery company Grubhub. An acquisition would certainly raise Uber’s profile in the food delivery space alongside its UberEats platform. Grubhub has been around since 2004 but has seen the competition increase in recent years as Uber, Postmates, and DoorDash all took off. While an Uber spokesperson said the company does not comment on merger and acquisition rumors or speculation, Uber’s stock was up 8 percent and Grubhub’s was up 35 percent following the reports.

And finally, as companies try to compete with Amazon-like experiences, opportunities abound for start-ups. DispatchTrack, which provides a platform for last-mile deliveries specifically to help companies mimic Amazon-like experiences for themselves by planning and tracking deliveries more easily, has closed a $144 million funding investment. This is the company’s first ever funding and it all comes from a single investor – Spectrum Equity. DispatchTrack was founded in 2010 and has since grown to support more than 60 million deliveries per year. DispatchTrack includes features for managing routing and planning (including telematics and compliance), customer communication (including reservation systems for delivery slots), driver communication (via a mobile app), billing, social reviews and omnichannel order tracking.

That’s all for this week. Enjoy the weekend and the song of the week Ten Years After’s I’d Love to Change the World.

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