supply chain news Archives - Logistics Viewpoints

Transmute and mesur.io Announce Strategic Combination to Remove Disruption from Global Supply Chains

Breaking News | By Logistics Viewpoints Editorial Team • 02/02/2025

In a move to transform global trade and minimize disruptions in supply chains, Transmute and mesur.io have announced their strategic combination to reduce supply chain risk and improve enterprise resilience. Together, the companies will deliver their joint expertise through a unified platform that will make global trade more transparent, secure, and ethical.

This combination brings together key thought leaders in the trade modernization space to harness Transmute’s pioneering work in using Verifiable Credentials to enable modernized digital cross border trade and customs compliance, with mesur.io’s Tradeverifyd platform for understanding and managing supply chain risk. With the new additions to the team from Transmute, mesur.io will move further towards defining the global standard for supply chain risk.

“This is a pivotal moment for our industry and our teams,” said Karyl Fowler, CEO and Co-Founder of Transmute. “By joining forces with mesur.io, we are uniting two powerhouse teams with a shared commitment to building a safer and more sustainable – and more profitable – future for global trade. I’m confident that together, we will redefine what’s possible at the intersection of policy, technology, and secure commerce.”

The Economics of Space Freight: Reducing Costs, Addressing Challenges, and Defining Future Logistics

High Tech & Electronics Industry | By Jim Frazer • 10/30/2024

Space freight is becoming more accessible, offering a new dimension for logistics operations. Companies such as Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin, Rocket Lab and others are lowering launch costs, with SpaceX achieving approximately $2,600 per kilogram to Low Earth Orbit (LEO), compared to $18,500 per kilogram during the Space Shuttle era. Despite these reductions, the industry faces complex economic, regulatory, and technological challenges that impact its scalability. For logistics professionals, the cost and limitations of space freight require careful evaluation to determine practical applications. A nuanced understanding of these elements is critical for informed decision-making, thus let’s examine current costs, challenges, and potential strategies and offer a realistic perspective on the possibilities of space freight logistics.

The Current Space Freight Landscape

The space freight ecosystem today includes both private companies and national programs working to establish a reliable infrastructure. SpaceX’s reusable rockets, like the Falcon 9, have reduced per-launch expenses to around $2,600 per kilogram to low earth orbit (LEO), although missions beyond LEO still involve much higher costs due to the need for additional propulsion and shielding. Telecommunications, defense, and environmental monitoring are sectors benefiting from these cost efficiencies, though deep-space missions remain largely experimental and expensive. Though space freight infrastructure is expanding, it remains limited to a few operators with substantial capital. Broadening access to smaller organizations will require continued reductions in cost and improvements in efficiency.

Key Challenges in Space Freight Logistics

Cost and Reusability Constraints

While reusable rockets have brought down costs, refurbishment still involves considerable resources for inspection, maintenance, and potential upgrades. For example, current costs for private space launches range from $2,600 to over $10,000 per kilogram, depending on the mission, which poses a barrier for smaller companies. The materials and engineering involved in refurbishment reduce costs only incrementally. This limitation suggests that further technological advancements are necessary to make space freight accessible for a wider range of operators. Without such advances, entry into the market will remain largely restricted to companies with significant resources.

Regulatory Complexity

Space freight involves navigating diverse regulatory frameworks, as each country sets its own policies and standards. The United States requires extensive satellite launch approvals, adding time and expense to the process. Internationally, the absence of unified regulations on satellite congestion, space debris, and resource use adds further complexity. This fragmented regulatory landscape complicates planning and increases compliance costs. A more consistent, international regulatory framework could streamline processes, helping reduce time and expenses associated with compliance. Until then, companies, particularly new entrants, will continue to face challenges with regulatory hurdles and the uncertainty they bring.

Space Debris and Orbital Congestion

The increase in satellite deployments is creating congestion in orbit and raising concerns about space debris. Collisions generate thousands of fragments, which can damage or destroy active satellites. Current technology for debris management, such as laser-based deorbiting and tug satellites, is still under development and not yet widely available. Until effective mitigation measures are in place, debris remains a significant operational risk. Addressing this issue will require continued investment in research and collaboration to develop reliable solutions, as well as industry-wide commitment to managing debris responsibly to maintain safe and sustainable operations.

Feasibility of Deep-Space Freight

While LEO missions have become more affordable, missions beyond LEO, such as those to geostationary orbits or Mars, involve higher costs and complex requirements. Deep-space missions require advanced propulsion, radiation shielding, and life-support systems, which add to overall costs. Current estimates for missions to Mars, for instance, exceed $100,000 per kilogram, limiting participation to well-funded organizations. Developing cost-effective systems for deep-space logistics will require significant investment and collaboration, but until these technologies are more affordable, deep-space freight will remain financially out of reach for most companies.

Supply Chain Dependencies and Vulnerabilities

Space freight operations rely on specialized supply chains with high-quality standards, making them vulnerable to disruptions. Each component undergoes rigorous testing and certification, and delays in a single part can impact entire projects. Companies that vertically integrate production, as SpaceX has done, are less exposed to these vulnerabilities, but smaller firms face greater reliance on external suppliers. Additive manufacturing offers potential to increase flexibility by producing components on demand, but current costs and certification requirements mean its use in space logistics is still limited.

Potential Strategies for Progress

Investing in Autonomous Reusability and Maintenance

Reducing maintenance costs for reusable rockets could involve automating inspection and repair processes. Autonomous maintenance systems for in-orbit repairs could help extend vehicle lifespan and reduce reliance on ground-based maintenance. Partnerships between public institutions and private firms may be necessary to drive this research. Over time, these solutions could enable smaller companies to participate more fully in space freight if they become economically viable.

Unified Regulatory Standards

Developing international standards for satellite licensing, collision prevention, and debris management could reduce regulatory complexity. Consistent rules across countries would allow for simpler compliance processes, helping reduce project timelines and costs. Creating working groups with industry and government representatives may be one way to achieve these standards. For smaller organizations, unified regulations could reduce administrative challenges and speed up market entry.

Scaling Debris Mitigation

Investment in debris mitigation technologies, such as tug satellites and in-orbit recycling, is important for maintaining safe orbital operations. Public-private partnerships could help develop these technologies and make them available industry-wide. Focusing on debris management could reduce collision risks and associated insurance costs, improving operational conditions for space freight. Continued R&D and funding in this area will be necessary to implement effective solutions.

The Future of Space Logistics

In the long term, space freight costs may continue to decline as technology improves and economies of scale develop. Some industry estimates suggest that costs could decrease to $1,000 per kilogram to LEO over the next decade, potentially opening access to more industries. In-orbit manufacturing and autonomous systems could further reduce costs, while increasing operational flexibility. The future of space logistics will likely depend on advances in both technology and regulation, requiring industry stakeholders to keep track of ongoing developments. As costs decrease, applications such as global internet networks and satellite constellations could expand, making space logistics a more integrated component of global operations.

How Autonomous Delivery Vehicles Are Redefining Last-Mile Logistics

Artificial Intelligence | By Jim Frazer • 10/16/2024

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

This Week in Logistics News (October 17 – 23)

logistics news | By LV Staff • 10/23/2020

I may be in the minority here, but I’m just going to come out and say it. I do not like glitter. I dislike glitter so much that some of my friends have (jokingly) threatened to send me a glitter bomb package. I’m the only one in my family that feels so strongly about it. In fact, my daughters love it, and as a result, they always seem to end up with birthday, Valentine’s Day, and any other holiday cards that you can imagine covered in glitter. They see sparkles and fun; I see vacuuming. Lots of vacuuming. So, I have now become a big fan of major British retailers Morrisons, John Lewis and Waitrose, as all three companies have said they would not be using glitter in their holiday products this year. According to a statement by Morrisons, “glitter is made from tiny particles of plastic and is an ecological hazard if it becomes dispersed on land, rivers, and oceans, where it takes hundreds of years to degrade.” Maybe I can leverage the fact that glitter is actually bad for the environment to bring the rest of my family over to my side of the argument. Then I just have to convince the grandparents. And now on to this week’s logistics news.

Ahead of Black Friday and Cyber Monday, one important holiday item is apparently sold out: shipping capacity. I wrote about this challenge earlier this week as I explored the 2020 holiday season. A full five weeks before Thanksgiving, UPS and FedEx have already told most of their largest shippers that most of their shipping capacity has already been sold. The result could be up to 7 million packages delayed per day. That’s not exactly something that consumers want to hear. With this news, opportunities have opened for smaller carriers as retailers and shippers look to find additional capacity for what will surely be a busy season. Unfortunately, the majority of small shippers booked their capacity months earlier than usual and will not be accepting new customers until 2021. This leaves the USPS as the safety valve for these shippers. However, the Postal Service is already expecting a record number of letters and packages to be delivered, so it will be interesting to see if the agency can handle the additional demand. The best advice for consumers is to ship early this year.

Drones have continued to demonstrate use cases as some regulations have been relaxed and more pilot programs have been approved. However, in order for drones to become a viable delivery mechanism for retailers, the Federal Aviation Administration (FAA) needs to pass final regulations laying out how drones can operate. We are now a step closer in the process. The FAA has submitted for final review two proposed regulations to the president’s Office of Management and Budget. These proposals are for remote identification of unmanned aircraft and operation of small unmanned aircraft over people. The White House budget office has 90 days to review the new regulations, meaning they could be published before the end of the year. If this happens, it will bring a close to a multi-year process for drone delivery regulations.

FedEx is looking to expand its drop-off program for e-commerce returns heading into the holiday season, with the returns rush ready to kick off in January. FedEx is partnering with Happy Returns to accept items from 150 participating retailers at 2,000 FedEx Office locations. The partnership will begin at the end of October and offers instant refunds at drop off without the need for a box or packaging. Customers can initiate the return online and present a QR code on their smartphone when they bring the item to FedEx. The partnership is similar to what Staples us doing with Optoro, with an effort to increase sales of in-store services such as printing, copying, and shipping.

As we head into fall and winter, most people are anticipating a surge in COVID-19 cases. On top of that, there is also the seasonal flu, which tends to peak between December and February. CVS is looking to get ahead of a potential rise on COVID-19 and flu cases by hiring 15,000 new employees. More than 10,000 of those will be full-time and part-time licensed pharmacy technicians who can help dispense medications and administer Covid-19 tests. The expanded staff could also help to administer a COVID-19 vaccine when it is available, assuming federal officials allow pharmacy technicians to do so. This is the latest step in CVS’ staffing expansion during the coronavirus pandemic, as it has expanded its staffing and services during the pandemic, including rolling out more than 4,000 Covid-19 drive-thru testing sites. CVS expects to administer 18 million flu shots this year – a jump from the 11 million it administered last year.

During the coronavirus pandemic, as grocery shopping shifted online, many Whole Foods customers ran into the problem of not being able to find a delivery window for their order. As demand surged, Whole Foods had to stop accepting new customers for its delivery program. As restrictions have eased, online grocery shopping has continued to grow. Amazon is now making it faster and easier for Prime members to get their grocery shopping done by launching free, one-hour grocery pickup for Prime members at Whole Foods locations nationwide. To qualify for one-hour pickup, grocery orders must total $35 or more.

Albertsons is also expanding its e-commerce options by rolling out self-service pick-up lockers at select locations. The lockers, which are manufactured by Bell and Howell, will first be installed at select Jewel-Osco locations in the Chicago area and Safeway locations in the San Francisco Bay area. Grocery adds another level of complexity to self-service pick-up, so the lockers are temperature-controlled allowing all kinds of grocery items to be stored. Customers can shop online or through the store’s mobile app and request self-service pick-up at check-out. Customers will select a pick-up timeframe that works for them, and upon check-out, be given a unique code to open the appropriate locker. Albertsons hopes to roll the program out nationwide if all goes well.

E-commerce is going to be the big driver for the 2020 holiday season and retailers are doing everything they can to embrace the seismic shift. Beginning this month, Nordstrom will add online order pickup at US Nordstrom Rack stores for Nordstrom.com, NordstromRack.com, and HauteLook.com purchases. The retailer will also fulfill online orders from NordstromRack.com and HauteLook.com at nearby Nordstrom and Nordstrom Local locations later this year. The strategy is to give the customer as many fulfillment options as possible to make the shopping experience a easy as possible. Nordstrom is also hiring more than 20,000 seasonal workers to help keep up with demand and ensure proper staffing at all pick-up locations.

Tesla has said it will start exporting China-made Model 3 cars to more than 10 European countries this month. Tesla joins a growing number of auto manufacturers that have begun using China as an export hub for electric vehicles. The company has been expanding its Chinese operations over the last year with the launch of a Shanghai factory which is Tesla’s first car plant outside of the US. Tesla aims to build 150,000 vehicles this year alone in the Shanghai plant. As Tesla begins rolling out Model 3 cars to Europe, it is also building a factory on the outskirts of Berlin which will expand its European export plan.

And finally, a new law will allow China to ban exports to protect national security, mirroring a US ban on exports. The law authorizes tight restrictions on the sale abroad of dual-use goods with both civilian and military applications, nuclear materials and equipment, and other products and services that touch on national security. The law has been in the works for two years and goes into effect on December 1. This is just the latest move in the testy trade dispute with the US and it will be interesting to see how the US responds.

That’s all for this week’s logistics news. Enjoy the weekend and the song of the week, Rock and Roll (Part 2) by Gary Glitter.

This Week in Logistics News (October 10 – 16)

logistics news | By LV Staff • 10/16/2020

As Boston sports fans, we have become accustomed to duck boat parades. Since 2000, the city has hosted 12 rolling rallies for major sports championships, including 6 for the Patriots, 4 for the Red Sox, and 1 each for the Celtics and Bruins. And if not for a few heartbreaks along the way, that number could easily be 15 or more. This year, unless the Patriots are able to pull off some magic, we will not be hosting a duck boat parade for a sports championship. But, in some pretty cool news, yesterday, the Boston Symphony Orchestra performed 20-minute curbside recitals from the duck boats at a number of locations around the city. The stops included Symphony Hall, Angell Memorial Hospital, Reggie Lewis Center, VA Hospital Jamaica Plain, and the Boston Public Library. Audiences were restricted to 50 people due to coronavirus concerns. And now on to this week’s logistics news.

If 2020 has proven anything, it is that things are bound to change. And the upcoming holiday season is no exception. With Amazon holding its delayed Prime Day earlier this week, and rival retailers holding sitewide sales as well, the holiday season has pretty much kicked off more than a month early. Walmart has also announced some major changes to its Black Friday offerings, which typically see huge crowds rushing into the store to grab items on mega-sale. This year, the company will be holding “Black Friday Deals for Days” with category-specific markdowns on different days. It kicks off online November 4 with deals on toys, electronics, and home products, with the sale continuing in stores on November 7. The second event kicks off online on November 11 with mark-downs on TVs, computers, tablets, movies, music, and more, continuing in store on November 14. The final event will be kick off online on November 25 and continue in stores on Walmart’s “true” Black Friday the day after Thanksgiving. And unlike years past, there will not be a mad rush into the store. Instead, customers will need to line up single-file and stores will limit the number of people inside the store at one time.

As grocery delivery has exploded during the COVID-19 pandemic, one lingering problem many consumers have faced is finding a delivery timeframe. Amazon is working on a solution for that problem. According to Amazon, in the event that a shopper can’t secure a preferred delivery time when placing an order, that customer will receive a notice when a spot becomes available. The technology reportedly will apply to orders placed with Amazon Fresh or Whole Foods. This essentially gives a customer a virtual space holder in the queue if there are no immediate delivery windows available. The customer is then given an estimate for when a delivery timeframe will open, and once it does, they are notified and given two hours to place their order.

COVID-19 has also ramped up the need for contactless delivery options for consumers. FedEx has implemented a number of changes to its normal delivery protocols during the pandemic, such as eliminating signature requirements for most packages and sending photos as proof of delivery. The company is also developing an autonomous delivery robot named Roxo, which would remove point-of-delivery contact from the equation entirely. According to FedEx, Roxo is not suited for high density routes that involve multiple stops for deliveries. Instead, the robot is geared towards same-day, on-demand delivery. These deliveries, where a truck brings a single package is inefficient, and FedEx plans to use the autonomous bots to make these deliveries instead.

Over the last few years, there has been a lot of buzz around the use of 3D-printed components to alleviate supply chain bottlenecks. We are starting to see more and more use cases of companies taking out these supply chain complexities with 3D-printed items. Chevrolet’s motorsports division has announced its teams have raced over 80,000 miles of competition this season in vehicles containing 3D printed parts. According to the announcement, Chevrolet’s Corvette, INDYCAR, NASCAR Camaro, and Silverado race teams have all contributed to the miles, using 3D printing for components such as oil tanks, air conditioning cooling boxes, integrated hydration systems, headlight assemblies, and power steering pump brackets, among others. According to Audley Brown, GM director of Materials Engineering, Additive Design and Manufacturing:

“By utilizing 3D printed parts, Chevrolet Motorsports is demonstrating the many benefits of additive manufacturing, including manufacturing efficiencies, mass reduction, parts consolidation, creativity and cost savings. 3D printed parts can offer equal strength and durability to cast or milled components, which is critical for product development and design.”

Not to be outdone by motorsports, rocket builder Relativity Space is turning to 3D-printed components as well. The company recently moved into a new headquarters in Long Beach, CA in preparation for its first launch in late 2021. Relativity Space is building its first iteration of its Terran 1 rocket. To do so, the company is relying on 3D printing to manufacture about 95 percent of its parts, using 3D printers that were developed in-house. Relativity is now on its third generation of 3D-printers, capable of manufacturing a single piece of metal up to 32 feet tall – as high as the new ceiling allows. Terran 1 will stand about 115 feet tall on the launchpad, so Relativity is building the rocket in sections and then using a specialized “horizontal conjoining system” to fit the pieces together.

E2open, a network-based provider of 100 percent cloud-based, end-to-end supply chain management software, announced that it has entered into a business combination agreement with CC Neuberger Principal Holdings I, a publicly traded special purpose acquisition company. Upon closing of the transaction, E2open will become a publicly traded company, and it is expected that its common stock will be listed on the New York Stock Exchange under the symbol “ETWO”. The transaction has been unanimously approved by the Board of Directors of CC Neuberger Principal Holdings I, as well as the Board of Directors of E2open, and is subject to the satisfaction of customary closing conditions, including the approval of the shareholders of CC Neuberger Principal Holdings I. The total equity investment of $1.1 billion raised in this transaction will be used to pay down existing debt, purchase a portion of the equity owned by existing E2open owners and conservatively capitalize the Company’s balance sheet. Upon the closing of the transaction, CC Neuberger Principal Holdings I will domesticate as a Delaware corporation and the name of CC Neuberger Principal Holdings I will be changed to E2open Parent Holdings.

COVID-19 has shifted the purchasing patterns and behaviors of consumers around the world. While e-commerce became a necessity as the onset of the pandemic due to brick and mortar stores being closed, once stores were allowed to re-open, many consumers continued to shop online. As a result, many retailers have had to shift gears on how they fulfill items. Macy’s has decided to run a test at two of its nearly 550 stores. The stores, located in Dover, DE and Littleton, CO, will be closed to shoppers and will instead be used as fulfillment centers for the holiday season. The stores will still facilitate in-store and curbside pickup orders, returns, bill pay and other customer services, while acting primarily as a fulfillment center for online orders. In a statement, the company said the pilot is in response to an uptick in online orders shipped directly to customers or their nearest store.

Want to learn more about omni-channel fulfillment? Learn how your omni-channel fulfillment operations measure up. Take our latest survey to find out.

That’s all for this week. Enjoy the weekend and the song of the week, the Boston Pops’ version of I’m Shipping Up to Boston.

This Week in Logistics News (October 3 – 9)

logistics news | By LV Staff • 10/09/2020

Earlier this week, guitar legend Eddie Van Halen died after a decade-long battle with cancer. He was often referred to as a guitar god, playing with blistering speed and bringing the tapping technique to the mainstream. One of the coolest stories I have heard about him this week was how he came to play the solo on Michael Jackson’s Beat It. Apparently, he had a deal with his bandmates that they would never do any side gigs or solo projects. However, when he was asked to perform a solo on Michael Jackson’s song, the lure of working with legendary producer Quincy Jones proved to be too much. With the rest of Van Halen out of town, Eddie decided to take on the gig, figuring no one would know he was playing the solo and figuring the song would barely be heard anyway. In all, it took him less than 30 minutes to record, and he wasn’t even paid. According to some accounts, all he asked for was a case of beer and for Michael to teach him some dance moves. As cool as the solo to Beat It is, when Jackson stepped out of the room, Eddie had the sound engineer rearrange the song, which ended up being the final version. And now on to this week’s logistics news.

Last week I mentioned that Amazon had officially announced a date for Prime Day: October 13 – 14. Even though the annual summer sale holiday has been delayed, the timing of it lines up with an early holiday season kick-off and looks like it will be a big one for Amazon. According to eMarketer, which released its first-ever Prime Day forecast, the sales event will top last year’s and bring in an estimated nearly $10 billion in worldwide sales. To put that $10 billion in perspective, 2019 brought in $6.93 billion, 2018 brought in $4.13 billion, 2017 brought in $2.47 billion, and 2016 brought in $1.5 billion. For 2020, of the $9.91 billion in forecasted sales, $6.17 billion will come from US consumers. In August, Amazon ran its Prime Day sale in India ahead; this was later than years past but earlier than in other countries. If the results from Prime Day India are an indication of how the October will go, these numbers seem attainable. Following the India event, Amazon reported record seller participation, and said it gained at least 1 million new subscribers for its Prime membership program.

After a few delays, Walmart+ finally launched two weeks ago. The program is Walmart’s answer to Amazon’s Prime membership program, costs $98 a year, and includes unlimited free delivery from stores, including groceries, plus gasoline discounts. The big questions surrounding Walmart+ is how much traction the retailer would get. Consumer opinion pollster Piplsay launched a survey of over 20,000 US adults between September 27 and 28. Of those surveyed, 11 percent indicated that they had already subscribed to Walmart+, with 27 percent saying they may enroll in the plan soon and 15 percent expressing no interest. The other question is how Walmart will+ impact Amazon Prime membership. According to the survey, 45 percent of Walmart+ members reported that they also belong to Amazon’s Prime customer benefits program, while 19 percent said they migrated to Walmart’s offering from Amazon Prime. For 36 percent of Walmart+ members surveyed, the signup marked their first such shopping subscription.

Office supply chain Staples is planning to use its stores as drop-off locations for returns of goods sold by other online brands. Staples is partnering with Optoro, a returns and reverse logistics tech firm, to enable consumers to return items to the more than 1,000 Staples stores in the US and get credit for returned items through a QR code on their phones. The plan, which will be called Express Returns, plans to launch in early 2021 to take advantage of the holiday return frenzy. For Staples, the move makes sense, as it the partnership will fit into what it calls its “service offerings,” which include in-store printing, copying, and shipping. Optoro supplies consumers with a portal for making returns and collecting refunds, and helps brands maximize the resale or reuse value of returns.

Shippers are being warned of severe congestion at the California ports of Los Angeles and Long Beach that could result in increased lead times on shipments. The congestion is mostly the result in a surge of imports over the last few months, which was driven in large part by consumer goods. Discretionary product and staple imports were up in August on stronger food and personal care shipments. Aside from the surge in imports, some of the issues are also due to vessel delays, extra loaders, chassis shortages, limitations in appointment windows, increased dwell time for local cargo, and a stretched drayage market. The ports are encouraging supply chains to use dual transactions “to improve efficiencies and ensure equipment availability.”

In August the US trade deficit rose to its highest level in 14 years. The Commerce Department reported Tuesday that the gap between the goods and services the United States sells and what it buys abroad climbed 5.9 percent in August to $67.1 billion, the highest since August 2006. Exports rose 2.2 percent to $171.9 billion on a surge in shipments of soybeans, but imports rose 3.2 percent to $239 billion, led by purchases of crude oil, cars, and auto parts. The US deficit with the rest of the world in the trade of goods such as airplanes and appliances set a record $83.9 billion in August. The US did run a surplus of $16.8 billion in the trade of services such as banking and education, which was the lowest since January 2012. The COVID pandemic has hit US trade hard in 2020, as the combination of import and exports is down 15.1 percent to $3.2 trillion.

Palm oil continues to be a hot topic in the news. Last week the US announced that it would block shipments of palm oil from FGV Holdings Berhad after it found indicators of forced labor, including concerns about child workers, along with other abuses such as physical and sexual violence. I have also written about a large number of companies looking to improve traceability and eliminate deforestation. This week, Mars announced that it has achieved a deforestation-free palm oil supply chain as a result of reducing its suppliers drastically under its ‘Palm Positive Plan’. Through its Palm Positive Plan, which was launched last year, Mars has simplified its supply chain by reducing the number of mills it sources from. It is awarding longer-term contracts only to suppliers who can commit to its environmental, social and ethical expectations. The progress is made possible by taking its mill count from 1,500 to fewer than 100 by 2021, and Mars says it is on the path to further halve that in 2022. With fewer suppliers, Mars claims it is easier to verify that the providers are meeting its environmental and ethical goals.

As the holiday season rapidly approaches, companies are adding tens of thousands of temporary employees in anticipation of the e-commerce surge that is likely coming. The COVID pandemic has propelled e-commerce to unanticipated heights, and it is showing no signs of slowing down. As consumers continue to be cautious of spending time in malls, online shopping is sure to lead the charge for the 2020 holiday season. According to seasonally adjusted preliminary employment figures released by the US Bureau of Labor Statistics, warehousing and storage payrolls jumped by 32,200 jobs in September. The jump in a sector that includes online fulfillment centers followed an addition of 34,400 jobs in August and came as retailers and logistics operators say they are planning on large-scale seasonal hiring for 2020. Courier and messenger companies that deliver packages to homes and businesses added 10,300 jobs in September, and trucking companies added 4,600 positions. I will have a full forecast on seasonal hiring in the coming months.

UPS is on the hook for a $100 million judgement. Earlier this week, the US Supreme Court denied a petition from UPS to reconsider the hefty penalty for delivering untaxed cigarettes in New York City. The decision by the high court means the delivery company must pay up. A 2014 study concluded that 60% of cigarettes in New York were subject to tax evasion, resulting in an estimated loss of tax revenue exceeding $2 billion annually. UPS said in a statement that it had greatly improved its ability to prevent shipments of untaxed smokes. The city and state sued UPS the following year. According to city Corporation Counsel James Johnson:

“Companies that illegally ship untaxed cigarettes into our city undercut our public health laws and deny the City millions in needed tax revenues. We have not finished our work here. Violators should consider themselves on notice that there is more to come.”

That’s all for this week. Enjoy the weekend and the song of the week, Eruption by Van Halen.

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