The stock market has been in the news a lot lately over the past few weeks. This is due to the volatility of the market as it has experienced huge swings just this week alone. On Wednesday, the DOW was down over 300 points, with losses picking up right after the release of the Federal Reserve’s meeting minutes, which showed concerns about the long-term benefit of President Trump’s tax cuts. The swings are also attributed to rising interest rates which has some investors skittish about the overall health of the market. But, market volatility we have seen this week is nothing compared to what happened 31 years ago today: Black Monday. On Monday, October 19, 1987, stock markets around the world crashed. By the end of October, markets had fallen in Hong Kong (45.5%), Australia (41.8%), Spain (31%), the UK (26.5%), the US (22.7%), and Canada (22.5%). Luckily, the recovery was quick, and by the end of January, the DOW was up significantly. However, Black Monday serves as a reminder of just how quickly the market can drop, and the impact on the global economy. With interest rates rising and trade wars ongoing, market volatility should be expected for some time. And now on to this week’s logistics news.

• BluJay acquires ERA Systems
• The Post Office wants to raise the fees it charges Amazon and other shippers
• President Trump moves to pull U.S. out of 144-year-old postal treaty
• UPS rolls out My Choice to additional continents in largest rollout yet
• Uber targets trucking with new trailer rental service
• Yamato agrees to jointly develop flying delivery trucks with U.S. firm
• Heat and drought could threaten world beer supply
• Panama Canal weighs in with record tonnage

BluJay Solutions has agreed to acquire ERA Systems, a Genoa-based provider of customs solutions. BluJay Solutions is built on its Global Trade Network, which consists of transportation, warehouse, compliance, commerce, network, and logistics-as-a-service, and connects over 40,000 shippers, carriers, forwarders, and technology partners. According to BluJay CEO Doug Braun, “the global, multi-country customs platform is becoming a reality. We are fortunate to have a dynamic and dedicated team like ERA join us in this journey.” This acquisition comes on the heels of BluJay’s August acquisition of Grosvenor International Systems, a leading provider of customs and compliance solutions to the UK and European markets. These moves are designed to expand the global footprint of BluJay and bring more parties into its global network.

The United States Postal Service wants to raise the fees it charges Amazon and other shippers. Just months after President Trump criticized the USPS for giving Amazon “too good of a deal,” the agency has proposed 9 to 12 percent increase in the fees the retail giant pays. Additionally, the USPS is proposing an increase to its parcel select service, which serves last mile needs for various shippers including UPS and FedEx. Under the new proposal, the USPS is seeking a 9.3 percent increase on this service for packages weighing over one pound and a 12.3 percent increase on lighter packages. The final price increases proposed by the USPS include a 3.9 percent increase on priority mail express, a 5.9 percent increase on priority mail, and a 10 percent increase on first-class stamps.

Speaking of postal rates, President Trump is threatening to pull the US out of the Universal Postal Union. Created in 1874, the postal agreement sets shipping rates for 192-member countries. The Trump Administration said the agreement has disadvantaged domestic shippers by giving China and other countries discounts on postal rates. Administration officials said Chinese shippers pay roughly 20 cents for every $1 domestic companies pay to move a package within the US. Shippers such as FedEx and UPS would gain an advantage by competing on a level playing field with the USPS, while enabling online retailers like Amazon to fend off cheaper foreign competitors.

Speaking of UPS, the company is expanding its My Choice delivery service to 96 more countries and territories. The service started with 16 locations, and added 48 more over the summer, with 48 additional locations to be added by the end of the year. The service updates customers on its delivery status, including alerts the day before the item is to be delivered with a delivery timeframe, when the item is out for delivery, and a notification when the package is delivered. One of the more interesting parts of the service is the ability for customers to change the delivery date and location through the platform. This expansion is the largest since the service was launched seven years ago.

Uber Technologies continues to look at new ways to expand its footprint in the trucking industry. The company is set to announce a new division called Powerloop, a new tractor-trailer rental service aimed at helping big-rig truckers haul freight around the country. Powerloop will connect small and medium-sized carriers with fully filled trailers from businesses such as brewer Anheuser-Busch InBev SA. Uber has leased hundreds of trailers from an undisclosed company and is renting them to carriers for $25 a day, planning to profit from the difference. Uber will begin testing Powerloop in Texas, with plans to expand to other parts of the country.

Yamato Holdings Co. announced it has agreed to jointly develop an unmanned cargo aircraft with US-based Bell Helicopter Textron Inc. The goal of the partnership is to develop and launch a “flying truck” by the mid-2020s. Yamato will be responsible for developing the cargo container while Bell will develop the body of the autonomous aircraft. The two companies have said that the vehicle will be able to carry nearly 1,000 pounds at nearly 100 miles per hour. Additionally, the flying truck will be able to take off and land vertically while cruising horizontally. This could go a long way in easing the issue of a depleted delivery workforce, and certainly makes for an ambitious plan.

A new study has indicated that a warming globe will result in a barley shortage in the coming years. The result will be a beer shortage which will drive up prices. In a report in Nature Plants, researchers in China, Britain, and the US say that by the end of the century, drought and heat could hurt barley crops enough to cause a serious shortage. This could result in at least a 20 percent drop in the beer supply or doubling of prices over the next 80 years. According to the researchers, only 17 per cent of the barley produced in the world is used in brewing, as the majority is harvested as feed for livestock. Maybe beer drinkers worldwide can convince the animals to give up some of their food for the greater good.

And finally, the expansion of Panama Canal has resulted in record breaking tonnage moving through the waterway. The Panama Canal closed its 2018 fiscal year with a record tonnage of 442.1 million Panama Canal tons (PC/UMS), a 9.5 percent increase from the previous year. The canal surpassed the cargo projections of 429.4 million PC/UMS tons for FY 2018, as well as the 403.8 million PC/UMS tons registered in FY 2017. According to the Panama Canal Authority (ACP), the increase was driven by the transit of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) carriers, containerships, chemical tankers and vehicle carriers.

Want to learn about the benefits of building a digital supply chain? Register now for a free webinar on Wednesday, October 24 where ARC Advisory Group’s Clint Reiser and Amber Road’s Ty Bordner will discuss a high-level approach to implement a global supply chain digital execution platform; strategy for gaining complete end-to-end visibility and actionable control; the benefits of collaboration, automation, and analytics that are possible; and success stories of companies that have moved to a digital supply chain.

That’s all for this week. Enjoy the weekend and the song of the week, Paint It Black by the Rolling Stones.

And like that, summer is over and the kids are back to school. But this year is a little different, as my daughter has joined her big brother at the elementary school and started kindergarten. For some reason when my son started kindergarten, it didn’t seem like it was as big of a deal to me. Maybe he has always seemed older. Maybe it was his naturally outgoing personality that made it easier. Or maybe it’s simply the fact that she is his baby sister and elementary school seemed so far off. Well, not anymore. She made the trek down the hill with him and a gaggle of neighborhood kids this week to officially kick off the school year. As I wistfully watched her walk down the hall to her classroom, I couldn’t help but feel an overwhelming sense of amazement about just how fast the time goes. And now, we are off to new adventures and this week’s logistics news.

• Walmart in the news
  • Walmart’s latest blockchain patent lets robots conduct deliveries
  • Walmart trials grocery delivery to rival Amazon Flex
• Kroger expands Instacart home delivery to half its stores nationwide
• FAA celebrates successful drone trials
• Congress rolls back tariffs
• Senate delays Amazon hearing pending Postal Service review
• Tesla Motors tours electric semi-truck to customer sites
• Debenhams to roll out Doddle Click & Collect points across its store estate

Walmart has applied for another blockchain patent. According to an official patent document released by the US Patent & Trademark Office (USPTO), Walmart has filed to patent a blockchain system for deliveries using robots. The patent, which is named “Systems, Devices, and Methods for In-Field Authenticating of Autonomous Robots,” was initially filed in January 2018. This patent looks at technology for running “in-field authenticating of autonomous electronic devices” to enable secure deliveries. The patent states that “in exemplary embodiments, two autonomous electronic devices, such as delivery drones or household autonomous robots, can authenticate each other using embodiments of security procedures described herein.” Basically, the patent calls for multiple robots or drones to make package deliveries across the entire supply chain using blockchain powered secure authentication.

As Walmart tries to scale its home grocery delivery business, the company is testing whether independent drivers could be the answer. Walmart is piloting a program dubbed Spark Delivery where a fleet of drivers use their personal vehicles to make grocery deliveries. The crowdsourced delivery platform works with Delivery Drivers Inc, which is a separate firm that manages the drivers. Delivery Drivers will manage background checks and payment for the drivers, and will use Walmart’s in-house platform to schedule drivers within specific timeslots. This is not the first time Walmart has sought to bring innovation into the grocery delivery business; however, its trials with Uber and Lyft, as well as with its own employees using their cars to make deliveries, were all shelved pretty quickly. Spark Delivery is currently being tested in Nashville and New Orleans with plans to roll out to a few more metro areas this year.

Speaking of grocery delivery, Kroger is expanding its home delivery partnership with Instacart to cover more than half of its stores nationwide. The new service is available in Atlanta and Augusta, Georgia; Knoxville, Memphis, and Nashville, Tennessee; Little Rock, Arkansas; and a few other markets. According to Kroger, the company will expand the service from 45 to 120 metropolitan markets across the country by October. This will cover 1,600 stores, and same-day delivery will be available in as little as two hours. Kroger customers can place their order through Kroger’s website or mobile app, and the service generally has a flat fee of $11.95 per order.

Drone deliveries have been a hot topic of debate over the last couple of years, with companies hoping the FAA would relax regulations to make drone deliveries a viable last mile option. Earlier this year, the White House announced plans to initiate a number of pilot programs using drones, and now the FAA is celebrating early success. The trials were part of the FAA’s UAS Integration Pilot Program and carried out this month by 10 companies selected to collaborate with the FAA and local governments to prove applications. The tests included delivery of ice cream, feral hog traps, medical supplies, and everything in between. The FAA hopes the UAS Integration Pilot Program will help launch drone applications for commerce, aerial photography, emergency management and rescue operations, agricultural support, and infrastructure inspections. The results of these pilots will be used to help shape future regulations around drone deliveries. But the early success of the pilots has the future looking a little brighter.

After a vote earlier this week, the House passed legislation that would roll back tariffs on an estimated 1,660 products from China, mostly chemicals. The legislation, dubbed the Miscellaneous Tariffs Act, previously passed the Senate last month and now heads to the White House. The main argument in the bill is that the tariffs are outdated and protect very few products that are actually made domestically. Instead, the tariffs are simply driving up costs for manufacturers that need them. The legislation now goes to President Trump’s desk to be signed, but it is unclear what he will do. While Trump has not publicly opposed the bill, he has stressed the importance of tariffs as bargaining tools and seems prepared to continue to levy more tariffs.

There has been a lot of scrutiny around the relationship between Amazon and the US Postal Service lately. Namely, President Trump has been outspoken about his belief that Amazon is ripping off the USPS. As part of his displeasure with the USPS, Trump launched a task force to overhaul the Postal Service back in April, with the hopes of generating more money. A hearing at the Senate Homeland Security and Governmental Affairs Committee where senators are expected to scrutinize Amazon’s relationship with the Postal Service has reportedly been postponed. It is not clear when the hearing will be rescheduled, as the committee awaits a report from the White House on the overall health of the Postal Service and the implications of the service’s business agreement with Amazon.

As I mentioned a couple of weeks ago, Tesla made some news around its semi-truck when it  rolled out video of a prototype undergoing testing. Now the company is taking the semi on the road to customer sites. Specifically, Tesla is taking the semis on a cross-country tour to show off the technology inside and out of the cab. The latest stop was to Ruan Transport Corp., an Iowa-based TMS provider that has reserved five of the semis. According to Ruan, it is not just the potential for the electric truck to save money in the long-haul while being eco-friendly; instead, it is the remote diagnostics capabilities that alert technicians to maintenance needs, safety enhancements such as wrap-around windshields and heads-up displays for improved visibility, and automatic emergency braking, jackknife prevention, forward collision warning, and automatic lane keeping capabilities. However, Tesla has still not yet released details such as the total operating cost, according to Ruan.

And finally, Debenhams is set to roll out Doddle Click & Collect points across its store estate. You may be asking, just what does this mean? Well, Debenhams is a British department store that operates a number of brands. As such, online shoppers at Amazon, ASOS, Missguided, and almost 50 other brands will be able to collect their purchases at branches of Debenhams nationwide as the department store begins the full roll-out of the Doddle Click & Collect service across its store estate. Debenhams has been piloting the Doddle service at 50 of its stores and is now extending it to all 165 branches with the majority due to be live by Spring 2019.

That’s all for this week. Enjoy the weekend and the song of the week, Harry Chapin’s Cats in the Cradle.

Growing up in the 80’s, malls were a pretty big deal. They were the social hotspots for teenagers, the place where you could buy anything (so the original Amazon), and even spawned a full-on tour for Tiffany, aptly named “The Beautiful You: Celebrating the Good Life Shopping Mall Tour ’87.” One of the best things to do at the mall was to go into stores where you knew there was no way you were buying anything. For me, the big three was Spencer Gifts, The Sharper Image, and Brookstone. Brookstone was especially fun as you could try out the massage chairs and all the new technology that you didn’t quite understand. In a bit of sad news, the company filed for bankruptcy protection yesterday and said it would close its 101 mall-based stores. The company will also put its 35 airport-based stores up for sale. This is just the latest mall-based company that is feeling the effects of low foot traffic in the digital age. And now, on to this week’s logistics news.

• Starbucks teams up with Alibaba for coffee delivery
• com buys Metapack
• Uber shuts down self-driving truck division
• Australia’s biggest shoe retailer launches same-day delivery
• Domino’s delivers pizza with Snapchat AR
• UPS partners with startup Thor to build two new electric trucks
• Zest Labs hits Walmart with $2 billion lawsuit

With demand for home delivery of every food product known to man increasing, Starbucks is jumping on the bandwagon. According to multiple reports, the coffee giant is teaming up with Alibaba’s food delivery unit, Ele.me, to deliver coffee and snacks to Chinese consumers later this year. Starbucks has said that China had been the company’s biggest growth driver recently, but same-store sales have lagged. The move comes as a natural response to the growing demand and competition for coffee in China. While Starbucks and Alibaba “have nothing to share at this point,” reports have the partnership beginning with home delivery this fall. This will certainly be an interesting partnership to follow.

In recent articles, I have talked about the growth factors and strategies for success for the transportation execution market. There has been a rather large consolidation in the space, as Stamps.com has announced the acquisition of MetaPack for approximately $230 million. Metapack will operate as a wholly owned subsidiary of Stamps.com. Given Stamps.com’s presence in the SMB market, this move makes sense as Metapack brings on more retail enterprise customers. In the short term, Stamps.com expects MetaPack to operate autonomously, with day-to-day operations continuing as normal. No changes to the management team are being made and there will be no platform effect on peak stability or uptime.

For the last two years, almost to the day, Uber has been making headlines since its multi-million dollar acquisition of autonomous truck start-up Otto. Since that time, Uber and Otto have come under fire for a variety of reasons. While Otto demonstrated that ability to run an autonomous truck for Budweiser deliveries in Colorado, Uber is focusing its efforts on autonomous cars. The lawsuit filed by Waymo seems to be a factor in the pivot made by Uber. However, given Uber’s push towards the trucking industry, Uber Freight will still continue to operate.

Australia’s largest footwear chain is rolling out same day delivery as a direct response to combatting the pressure from Amazon. Accent Group started sending same-day deliveries out of 12 of its Platypus shoe stores last week, and over the next two months intends to extend the service to all 350 of its Australian stores, which include the Hype DC, Skechers, Vans, and The Athletes Foot banners. The rollout is part of a suite of changes as part of Accent’s strategy to become more omni-channel, a move that includes the recent introduction of “click and collect” which accounts for 10 to 20 percent of online sales depending on the brand.

Domino’s Pizza has launched a mobile campaign that allows customers to order a pizza through Snapchat’s “shoppable AR.” Snapchat users that took a selfie saw their picture had a pair of mirrored aviator sunglasses with a pizza in the reflection. If they turned the camera around, they saw a pizza box that opened to reveal a pepperoni pizza. From there, they could order a pizza directly through the app. This is another move by Domino’s to make the customer experience easier and more enjoyable. The company has also added additional hotspots, public places where customers can have pizza delivered.

UPS is partnering with Los Angeles-based startup Thor to build a new electric truck. Earlier this year, Thor unveiled an electric semi-truck prototype, with plans to beat Tesla to the market. Thor is targeting a relatively short driving range of “approximately 100 miles”, but they are also planning for an even shorter range of 50 miles – though that version will be less expensive with a targeted production price “as low as $68,000.” The testing will “include off-road evaluation to address durability, battery capacity, technical integration, engineering and any items found during on-road testing.”

And finally, Walmart has been hit with a $2 billion lawsuit by Zest Labs and its parent company Ecoark Holdings. Zest Labs claims that Walmart unfairly and illegally used its Zest Fresh intellectual property in the development of Walmart’s Eden food freshness technology. According to the complaint, “Zest Labs engaged with Walmart to demonstrate the value of Zest Fresh to reduce waste and improve delivered shelf life consistency. During this time, Zest Labs’ proprietary information and trade secrets were shared with Walmart, including members of Walmart’s executive leadership team.” This is significant given that Walmart’s food traceability solution is about the only blockchain solution making any traction in supply chain management today.

That’s all for this week. Enjoy the weekend and the song of the week, Tiffany’s I Think We’re Alone Now.

https://www.youtube.com/watch?v=85wL0_2Bi04

Phew! All of the boxes were finally moved in. The house was in disarray, but my wife and I were happy to finally have the family back in a home of our own. Then the cleaning began. Why is it that the process of cleaning a house reveals so many problems? Things look so much cleaner from a distance. And why does cleaning also reveal so much dysfunction? When it comes to buying a home, ignorance is definitely bliss. It reminds me of the movie The Money Pit. That was a classic 80’s comedy!  And now, on to this week’s logistics news.

 

• China-US Tariff Volley Continues
• JDA Software to Acquire AI Solution Provider Blue Yonder
• Target Expands Click-and-Collect to 200 More Stores
• Norwegian Oil Workers Strike – Oil Prices Higher
• Congress eyes truck driver shortage solution
• LV Sponsor Geodis’ Team Supports Thailand Rescue Effort

The US and China are announcing additional tariff on each other’s goods in what is beginning to look more and more like a potential trade war. I am on record stating that I see the Trump administration’s tariff “threats” as posturing meant to set up future negotiations that will hopefully obtain trade benefits on the margin. I still believe this is the case, but I am open to admitting I was incorrect if tariff exchanges throw the US into a recession. Anyway, in the latest tariff “volley”, on Tuesday the Trump administration announced another $200 billion worth of Chinese exports slated for a proposed 10% tariff. According to the Office of the US Trade Representative, this is being done in response to “China’s retaliation and failure to change its practices.” China recently imposed tariffs on $34 billion in US exports to China. Anyway, you get the tennis metaphor….

JDA Software announced that it has signed an agreement to acquire Blue Yonder, a Germany-based provider of machine learning and AI solutions to the retail industry. JDA stated that the acquisition will allow it to “more quickly embed new levels of actionable intelligence across all areas of its SaaS solution roadmap.”  AI and machine learning are central tenets of the recently launched JDA Luminate Platform, a connected platform that combines next generation digital technologies with product enhancements to JDA’s core solutions.

Target has expanded its curbside pickup service to 200 sites across the US. “Drive Up'” fulfillment option of the the click and collects service allows customers to order through Target’s mobile app and then have their order hand delivered to their car in the store lot. I believe that Omni-channel initiatives such as this program at Target are critical for retail chains to remain competitive in a time when e-commerce is growing rapidly at the expense of storefront sales.

The petroleum supply chain is near and dear to the hearts of my automation colleagues at ARC Advisory Group. As such, events in the industry are closely watched. Earlier this week, Norwegian oil workers went on strike, leading to a shutdown of a Shell oil field. Brent crude prices increased temporarily, only to fall steeply later in the week. Let’s hope that this supply dispute is resolved quickly.

Truck driver shortages are showing potential to hinder the growth of the US economy. Members of Congress are looking at changing a regulation that prohibits drivers under the age of 21 from driving commercial vehicles over state lines. The proposed legislated, called the Drive-Safe Act, would open cross-state trucking to drivers as young as 18 years of age. the hope is that this change in regulation would increase the number of candidates for these jobs.

Geodis noted on its website that Geodis teams were involved in delivering extra pumping capacity to the rescue teams at the cave in Thailand. The company expediently delivered emergency equipment from the US to Thailand. Congrats to Geodis for being part of such an inspiring effort!

That’s all for this week folks!