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Supply Chain and Logistics News June 16th – June 19th 2025

This Week in News | By Gaven Simon • 06/20/2025

Summer is in full swing, and this was another full week of Supply Chain & Logistics news. Firstly, the US and the UK have signed a partial trade agreement which includes a reduction in tariffs on UK and US exports. DHL Express Canada has been faced with looming union conflicts, causing it to currently halt operations. General Motors announced 3 assembly plants to be located in the United States with a combined $4 billion in investment. PepsiCo reports major savings on fuel costs after onboarding EV semi trucks at its Fresno facility. Lastly, Amazon has launched a fully robotic fulfillment center in Massachusetts. Read more below for the full breakdown!

Here is your news for the week:

US and UK Sign Parts of Trade Deal

President Donald Trump has signed an order confirming parts of a UK-US tariff deal, which aims to reduce trade barriers between the two countries. The agreement includes a reduction of tariffs on UK cars shipped to the US from 25% to 10%, and a similar system is being considered for steel and aluminum. However, the deal still imposes a 10% levy on most UK goods and does not address the removal of steel import charges. The UK government hopes this deal will protect British businesses from the impact of US tariffs, but there are still concerns about the long-term effects on industries like steel and bioethanol. The deal also includes a tariff-free quota for US ethanol and an increase in the quota for US beef imports, with assurances that food safety standards will be maintained.

DHL Express Canada to Suspend Operations Nationwide

DHL Express Canada plans to suspend operations nationwide starting June 20 due to stalled contract negotiations and labor disruptions. Ahead of this shutdown, the carrier will cease importing international packages as of June 17. The strike, initiated by Unifor union workers on June 8, follows a lockout by DHL. The union is demanding significant wage increases and better working conditions, while DHL argues that these demands are economically unfeasible. The situation is further complicated by new legislation prohibiting the use of replacement workers during strikes, which takes effect on June 20. This labor unrest is part of a broader trend affecting Canada’s parcel delivery sector, with Canada Post employees also facing contract disputes.

GM is investing $4B in Three Plants to boost Domestic Production

General Motors (GM) announced a $4 billion investment in its U.S. assembly plants across Michigan, Kansas, and Tennessee to boost production of both gas and electric vehicles. This move aims to mitigate the impact of tariffs on imported automobiles and parts and to support American jobs. The investment will increase GM’s capacity to build 2 million vehicles annually in the U.S. by 2027. Key projects include expanding production of popular models, such as the Chevrolet Equinox and Blazer, and enhancing facilities for next-generation electric vehicles. GM’s commitment underscores its belief in American innovation and manufacturing expertise.

PepsiCo Expects Nearly $1M in Fuel Savings for its EV Semitrucks

PepsiCo anticipates saving nearly $1 million in fuel costs for charging its fleet of 50 electric semitrucks at its Fresno, California, bottling facility, thanks to Pacific Gas and Electric Company’s Flex Connect program. This program allows daytime charging and increases the site’s charging capacity from 3 megawatts to 4.5 megawatts, enabling PepsiCo to charge its entire fleet more efficiently. The quick charging turnaround, from zero to 80% in about 40-60 minutes, helps maintain smooth operations. This initiative is part of PepsiCo’s broader sustainability goals, with additional EV fleet sites planned for the future.

Amazon Opens Robotic Fulfillment Center in Massachusetts

Amazon’s new robotics fulfillment center in Charlton, Massachusetts, spans 2.8 million square feet and features hundreds of robots capable of lifting up to 1,500 pounds. This facility supports over 1,000 employees in fulfilling tens of thousands of orders and represents Amazon’s largest investment in Massachusetts, totaling over $300 million. The center is part of Amazon’s strategy to enhance productivity and reduce manual tasks through advanced robotics.

Song of the week:

Supply Chain and Logistics News May 12th- 15th 2025

This Week in News | By Gaven Simon • 05/16/2025

This week marked a significant milestone for trade agreements. The United Kingdom and India have formally reached a Free Trade Agreement, which is the largest trade agreement for the UK since Brexit. As a result, 99 percent of Indian exports will benefit from zero duties in the UK market. Additionally, the United States and China have agreed to a 90-day tariff reduction, during which both countries will lower their tariffs on products from one another. In a related move, Temu has signed a lease for its largest warehouse in Vietnam to mitigate risks arising from the ongoing tariff complications between China and the US. Finally, for the first time, BYD has outsold Toyota in the first 4 months of 2025.

India and the UK Agree on a Historic Free Trade Agreement

After over three years of negotiations, India and the United Kingdom have formally agreed to a Free Trade Agreement (FTA), marking a major milestone in their bilateral relations. Although the full text of the Agreement has not been released, the Indian industry has welcomed the development, even as concerns remain over potential impacts on agriculture and MSMEs. The deal is expected to be signed in three months and will take over a year to implement.

This Agreement is the most economically significant trade pact signed by the UK since Brexit, following similar deals with Australia and Japan. Although the EU remains the largest trading partner for both countries, the India–UK deal symbolizes a strategic reorientation and a step toward more diversified trade relationships. From India’s perspective, the trade deal complements its ambition to become a preferred manufacturing destination, encouraging businesses to diversify their investments. Indian industries anticipate further free trade agreements (FTAs) as these trade pacts are essential for integrating into the global value chain, according to the President of the Confederation of Indian Industry (CII).

Highlights of the India-UK Free Trade Agreement

99 percent of Indian exports to benefit from zero duty in the UK market.
Indian import duty will be slashed, locking in reductions on 90 percent of tariff lines, 85 percent of these becoming fully tariff-free within a decade.
India is reducing tariffs for: whisky, medical devices, advanced machinery, and lamb, making UK exports more competitive.
Goods with reduced import duties for Indian consumers: cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate, and biscuits.
Products with cheaper prices for British shoppers: clothes, footwear, and food products, including frozen prawns.
Automotive tariffs will go from over 100 percent to 10 percent under a quota.
Three-year exemption from social security payments for Indian employees working in the UK.
Export opportunities for labor-intensive sectors such as textiles, marine products, leather, footwear, sports goods, toys, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals.

U.S. and China Agree to a Temporary Tariff Reduction

On May 12th, the United States and China announced an agreement to reduce tariffs on each other’s goods for 90 days. This is an outcome of a several day discussion of technical discussions held in Geneva between senior economic officials from both discussions held in geneva between senior economic officias from both sides. The United States will lower average tariffs on Chinese imports from 145% to 30%. China will also reduce its tariffs on U.S. goods from 125% to 10%. These measures have contributed to adjustments in cross-border trade flows and affected planning in industries reliant on bilateral supply chains. In the U.S., companies accelerated shipments to avoid tariff increases, leading to short-term logistical bottlenecks. In China, a decline in exports to the U.S. and lower manufacturing activity were reported in the months preceding the talks.

US and UK Trade Deal

On May 9th, the United States and the United Kingdom announced a bilateral trade agreement focused on tariff adjustments across key trading sectors. The agreement formalizes a 10% baseline tariff on most goods imported into the U.S, including those from the UK. This replaces a range of higher tariffs imposed in prior years. While lower than previous maximums, the 10% rate remains above pre-2020 levels and applies broadly, unless specified by sectoral exemptions.

Automotive Sector:

The U.S. will impose a 10% tariff on the first 100,000 vehicles exported annually from the UK. This reflects the UK’s current export volume. Exports beyond this threshold will be subject to a 27.5% tax. The UK’s current 10% tariff on U.S vehicle imports remains in place, through discussions on reducing it are ongoing. Aircraft parts, including Rolls-Royce components, will be exempt from tariffs.

Steel and Aluminum:

The agreement eliminates the 25% tariffs previously applied to UK steel and aluminum exports to the U.S. However, exports are now subject to quotas and must meet origin requirements, including “melted and poured” conditions. Further details on derivative product eligibility and quota volumes have not been published.

For more highlights, read the full article here

Online Retailer Shein to Set up Huge Vietnam Warehouse in US Tariff Hedge

Fast-fashion online retailer Shein is leasing a huge warehouse in Vietnam. A first for the country, a move that could reduce its exposure to the unpredictable nature of U.S.-China trade tensions. Originally founded in China and popular for their cheap products, such as $5 bike shorts and $18 sundresses, they have agreed to lease nearly 15 hectares of industrial land for a warehouse near Ho Chi Minh City, Vietnam’s commercial and trading hub. Shein is expanding its network of contractors in China and is also investing 10 billion yuan in industrial projects in the south of the country, including a $500 million supply chain hub near Guangzhou. The first phase of that hub is currently under construction, will span about 49 hectares.

BYD Tops Singapore Vehicle Sales so Far This Year, Replacing Toyota

China’s BYD became the most popular vehicle brand in Singapore so far this year, outselling Toyota. For the first time, government data showed that the fast-growing electric vehicle maker is stepping up efforts to boost overseas sales. In the first flour months of 2025, BYD sold 3,002 cars or 20% of total vehicle sales in Singapore. Toyota and BYD’d main EV rivals of Tesla, sold 2,500 and 535 units each during the same period. Toyota used to hold the crown in the wealthy Asian financial hub, where the population of cars is kept steady by an expensive certificate system, selling 7,876 cars in 2024, versus BYD’s 6,191 sales. BYD’s robust sales growth in Singapore underscores its efforts to focus on overseas markets amid bruising price competition in China. Reuters reported this month that China’s No.1 automaker aims to sell half of its vehicles outside the Chinese market by 2030, a massive increase that would make it a rival to the world’s largest automakers.

Song of the week:

Post-Election (Early) Analysis of Energy Transition, Sustainability Initiatives, and Trade

Breaking News | By Gaven Simon • 11/11/2024

A new administration has been selected after this week’s long-anticipated presidential election has come to an end. Now that the results are in, what does that mean for the many renewable energy and sustainability initiatives that have progressed over the past four years, including the Inflation Reduction Act? Obviously, we don’t really know the answer, but we do know the attitudes of the incoming administration regarding environmental legislation and the support of fossil fuels. So here are some possible scenarios for the energy and process and discrete manufacturing markets. As we write this article, the fate of Congress is unclear, but a GOP majority in the Senate, Supreme Court, and Executive Branch could potentially allow for swift policy shifts regarding renewable energy policy and environmental legislation. A majority in all branches of government would leave little room for debate on policy. Over the last four years, the Biden administration invested hundreds of billions of dollars to support domestic energy transition efforts, including the Bipartisan Infrastructure Law and the Inflation Reduction Act (IRA). However, these investments — and the tax credits supporting them — now face uncertainty.

The Inflation Reduction Act

Since 2022, states with GOP leadership have received more than half of the $387.8 billion allocated through the IRA, including states such as Texas and Louisiana whose regulatory climates are more conducive to business due to fewer regulatory barriers, (e.g. limited public commentary periods for energy projects). Many GOP-leaning states offer advantages for clean energy projects, including established industrial energy infrastructure, ample land, and abundant natural resources. Just days before the recent presidential election, more than a dozen House Republicans urged Speaker Mike Johnson to preserve the clean energy credits within the IRA if the GOP maintains or expands its House majority. They argued that removing these credits could result in a “worst-case scenario,” as numerous companies have already begun projects based on the assumption that these credits would remain in place. Eliminating them, they contend, could waste billions of dollars already invested. Meanwhile, in 2024, 99 percent of all the new power generation capacity in the US was wind and solar. It’s cheaper and faster to construct, despite the Much of the new on-demand generation capacity, those plants that need to start up quickly in the event of a need for more power on the grid, are still gas fired turbines mixed with battery storage. This is also true for deep red states like Texas, which now has more wind and solar capacity than any other state in the union. This is the invisible hand of the market at work and this scenario will not likely change with the incoming administration.

What About Tariffs?

Tariffs also play a central role in this administration’s economic strategy, a stance that dates back to their first term in 2016. Now in 2024, proposals include significant tariff increases on foreign goods to support U.S. manufacturing and job growth. Plans floated during the campaign suggested a universal tariff of 10% to 29% on most foreign products, a 60% tariff on Chinese goods, and the removal of China’s permanent normal trading status. A proposed “reciprocal” tariff would match the tariffs other countries place on U.S. goods.

While tariffs are intended as taxes on goods crossing U.S. borders, importers often pass the costs onto consumers, potentially affecting U.S. manufacturers dependent on imported resources. China, a major supplier of electric vehicle (EV) batteries, could be particularly impacted by these tariffs, leading to increased costs for EV materials and pricing many consumers out of the EV market. Currently, the U.S. domestic supply chain for key low-carbon products, such as EV batteries and solar panels, remains insufficiently scaled to compete with foreign sources. Although tariffs may encourage domestic production, they could also increase costs for American manufacturers, reducing revenues.

However, that picture is changing. In just the past couple of years, massive deposits of lithium, a key ingredient in EV batteries, have been discovered in the US. ExxonMobil also became a huge lithium producer in 2023 with the acquisition of 120,000 gross acres of the Smackover Formation in southern Arkansas, one of the most prolific resources of its kind in North America. The direct lithium extraction that will be used by ExxonMobil utilizes 2/3 less carbon intensity than conventional extraction methods.

The Fate of Electric Vehicles

EV sales continue to grow overall, and the US share of electric and hybrid vehicle sales increased in the second quarter of 2024. The new administration, however, could roll back emission regulations, which would likely decrease demand for EVs (outside of strong pro-EV states like California, which may go on their own while increasing demand for oil, gas, and combustion-engine vehicles. Additionally, policies on methane emissions may be revisited. Any changes to methane regulations could impact U.S. oil and gas exports, as international buyers increasingly prioritize products aligned with methane-reduction goals. A U.S. withdrawal from the Paris Agreement is also possible, which would likely slow international efforts toward a coordinated energy transition.

The Biden on the energy transition has been clear, highlighting the perceived economic benefits of focusing on traditional energy sources and support for clean energy. Nonetheless, the impact of the IRA’s clean energy investments over recent years shows the potential for economic opportunity across party lines. While the next four years will bring changes, the momentum behind the clean energy transition remains significant and difficult to ignore.

Will the LNG Export Boom Continue

Since Russia’s invasion of Ukraine in 2022, Europe has increasingly relied on international suppliers for fuels and oil, with the U.S. emerging as a leading supplier of LNG and crude oil. In 2023 alone, U.S. LNG exports to Europe surpassed $30 billion, accounting for two-thirds of all U.S. LNG shipments. This surge has contributed significantly to U.S. revenue and tax income. Meanwhile, European consumers have faced higher energy costs, which have accelerated Europe’s shift away from fossil fuels.

While European policymakers remain concerned about potential tariffs from the next U.S. administration, they aim to maintain trade relations with the U.S., especially given tensions in trade with China. However, if a tariff conflict were to arise, retaliatory measures on both sides could strain the U.S.-EU relationship. The U.S. should be cautious, as European buyers have alternatives for LNG, potentially forcing the U.S. to turn to more distant buyers like China, increasing shipping costs. Although U.S. LNG production is expected to remain robust, the risk of a trade dispute with major European customers poses challenges to sustaining the current export boom.

This incoming administration has campaigned on a strong opinion on not interfering in the Russian conflict. If the Russian invasion continues without U.S. support to Ukraine the conflict could have detrimental effects on an international scale. In terms of US fossil fuel export policies, the Russian economy will favor these policies. LNG purchasers such as Europe may not agree with the decisions of the new administration and could result in some consequences for U.S. LNG exporters.

Find the Orginal Article Here

This Week in Logistics News (May 2 – 8)

logistics news | By Logistics Viewpoints Editorial Team • 05/08/2020

This Sunday is Mother’s Day. But it will certainly be different than Mother’s Days of years past. Instead of getting together and enjoying brunch and hug, more people will be looking at socially distanced or virtual celebrations. Even so, people are ready to spend this Mother’s Day. According to an annual survey from the national Retail Federation (NRF) and Prosper Insights & Analytics, while 71 percent of respondents are social distancing, 78 percent say celebrating Mother’s Day is important to them this year, given the pandemic. And these respondents plan to spend more, with an average of $205 on gifts for Mom, up about $8 from last year. For those that are celebrating, the most common gifts this year include electronics, housewares, gardening tools, and books, all which saw a significant boost from last year. And now on to this week’s news.

The coronavirus pandemic has led to increased e-commerce spending, especially in the grocery space. However, with so many consumers looking at grocery delivery, availability has become scarce. And even when consumers have been able to find delivery windows, orders are often delayed. Walmart is launching a new service to help customers get orders when they want them. The company has launched Walmart Grocery Express which promises orders in two hours or less, charging a $10 fee on top of the normal delivery charge to move the customer to the front of the line. Walmart has been testing the service at 100 stores across the US over the last few weeks and plans to roll it out nationwide in the coming weeks. Like Walmart’s other grocery deliveries, Express deliveries are handled by Walmart’s external network of delivery partners, which vary by market.

Back in March, President Trump exempted personal protective equipment (PPE) from tariffs. However, this exemption did not include chemicals that were important to make disinfectants. The Trump administration is still charging a 25 percent tariff on these disinfectants. One of the most important items is isopropyl alcohol, a critical ingredient in hand sanitizer and other disinfectants used by households, the food service industry, and first responders. This is crippling the isopropyl alcohol supply chain and making it difficult for companies to supply essential workers with antiseptics and sanitizing products.

On April 29th it was reported that 890 workers at a Tyson Foods plant in Indiana have tested positive for the coronavirus. That is more than 40 percent of its workforce. As part of its plan to keep employees safe during the reopening of its meat and poultry processing facilities, Tyson Foods announced a partnership with Scottsdale, AZ-based Matrix Medical Network. The partnership will use a fleet of mobile health clinics and staff to provide diagnostic testing for employees for COVID-19. The company will send the mobile clinics to beef, pork, and poultry plants across the country offering additional services such as clinical screening of working environments and health education for employees. Matrix will also help in the development of environmental designs at the plants to ensure safety.

There have been a lot of stories floating around regarding counterfeit and defective equipment being sold to protect against COVID-19. Well, in an effort to stop the flow of counterfeit masks, coronavirus test kits, and other medical equipment, US Immigration and Customs Enforcement (ICE) is working with companies such 3M, Amazon, and Pfizer. ICE’s center for intellectual property said it is working with these companies to identify suspicious shipments of materials and remove postings that may have counterfeit masks and equipment from online marketplaces. With demand outpacing manufacturing capacity, there has been a flood of imported items, which has led to a number of counterfeit operations. The agency said it had identified more than 19,000 suspect Covid-19-related domain names with the help of the companies in the partnership and is working to take many of them down.

Morocco has launched a fleet of drones to combat the coronavirus. Over the last few weeks, the country has rapidly expanded its fleet of drones for aerial surveillance, public service announcements, and sanitation. Like most places, the regulations prohibited widespread adoption of drone usage. However, as coronavirus spread, regulations were eased, and drones were put to work. As lockdown orders were ignored by some, drones were dispersed to monitor and identify suspicious gatherings and relay warnings. The aeronautics department of the International University of Rabat (UIR) offered its facilities, expertise and prototypes to authorities in March, deploying drones with loudspeakers or infrared cameras able to detect movement at night or spot individuals with high temperatures.

Ransomware attacks have been a problem for many companies over the last few years. For the second time in three months, Toll Group has become the victim of a ransomware attack that has led to the suspension of IT systems. Toll Group is an Australian-based logistics company that offers freight, warehouse, and distribution services. The first attack, which occurred in February, was a result of the MailTo ransomware and disabled the company’s IT systems. Now, the company has been hit by a Nefilim variant. The malware locks files and demands blackmail payments. The latest ransomware infection has resulted in a rebuild of core systems, the need to scrub infected servers clean, and the use of backups to restore files rather than give in to demands for payment. With the MyToll portal still offline, it is not possible to track or trace parcels. However, freight and deliveries are “largely unaffected.”

The closing of meat processing plants due to COVID-19 outbreaks has put added strain on the meat supply chain. And while President Trump has signed an executive order to compel plants to stay open during the coronavirus crisis, shortages are still expected. One of the big concerns is that customers will stock up early and often and hoard meat as the shortage hits grocery stores. To prevent this, many grocery chains are limiting meat purchases. At some Kroger stores, for example, customers are being limited to two pork items and two chicken items. Midwestern retailer Hy-Vee has limited customers to four packages of a combination of fresh beef, ground beef, pork and chicken. Costco, Giant Eagle, H-E-B, Wegmans, and a host of other chains are also imposing purchase limits.

The Federal Aviation Administration (FAA) has selected eight companies to help establish technical requirements for Remote ID, a protocol that drones will be required to follow for broadcasting identification and location data while in flight. Remote ID would require drone manufacturers to make their products capable of sending out ID codes and location data during operation in national airspace. Drones without the Remote ID system could be flown only within special FAA-designated zones, usually the same sorts of places where hobbyists fly model airplanes. The selected companies are Airbus, AirMap, Amazon, Intel, OneSky, Skyward, T-Mobil, and Alphabet’s drone subsidiary, Wing.

And finally, while some markets show growth in freight volume, rates still lag. The national average spot van rate hovered around $1.50 a mile during the week ending May 3, a four-year low despite improving freight volumes, said DAT Solutions, which operates the DAT load board network. Rates for refrigerated and flatbed loads hit their lowest points since early 2017. The number of loads posted on the network was up 33 percent, though, compared to the previous week, as fresh produce began to move and some states prepared to relax stay-at-home orders. Load-to-truck ratios were higher for all three equipment types, but a 4 percent reduction in capacity was a factor as more carriers sideline their equipment and wait for better pricing.

That’s all for this week. Enjoy the weekend and one of my mom’s favorite songs, the Grateful Dead’s Ripple.

US-China Trade Conference: Timely and Relevant

China | By LV Staff • 10/16/2019

The United States-China Chamber of Commerce (USCCC) held its twentieth annual US-China trade conference in Chicago on October 10 and 11. The theme “Navigating the Uncharted Waters of Future Global Trade” was certainly relevant, and the event was also timely as high-level government officials from both countries were negotiating trade terms in Washington at that same time. The conference included several speaker panels that provided insights on operating in today’s uncertain trade environment. Generally speaking, attendees expressed that tariff increases are not substantive enough to shift production operations to another Asian country in the short and medium-term. In addition, the publicity of the trade wars has established cost increase expectations, making it easier for companies to pass on some of the tariff increases to their customers. Finally, selling China production to customers in China is viewed as a means for offsetting a potential decrease in demand from the US.

Established Operations and Relationships

US companies and their owners place great value on their established relationships and ongoing operations in China. Frank and Mary Mehwald, the owners of Atlantic Tool & Die, shared their experience of establishing a wholly owned foreign subsidiary in Guangzhou, China. The facility began production back in 2007 when the presence of American companies in the area was limited in comparison to today. They believe that their current management in China and the relationships they have developed with the staff are critical to the operation’s ongoing success. Anthony Williams, VP of Imports and Sourcing for Handgards, a privately-owned provider of plastic disposable products, also emphasized the value of Handgards’ established operations and relationships. More specifically, he noted the amount of time and effort required to establish and refine supply chain partnerships. He also mentioned that it is a misconception that companies can swiftly shift operations to a different country in response to tariff increases – the processes are simply too important to the company and too complex to replicate quickly. Yi Zang from Plante Moran outlined an analytical framework that he presents to clients as they evaluate sourcing and production changes. Among those considerations were the consequences from losing experienced management and labor, as well as the extended supply chain capabilities in a given location. Very often an outsourced operation is supported by several local inputs that are critical to the outsourced operation’s success. Scott Wise, Director Global Sourcing from The Ames Companies, cautioned the audience that Southeast Asia may have lower labor costs, but it also may be less productive and be subject to higher raw material costs and insufficient local infrastructure. He also noted that it is getting easier to establish a foreign entity in China. And being established in China provides opportunities to sell into China if your products are suitable for the market.

China Consumption and Development

Interestingly enough, the publicity of the trade wars has established expectations for cost increases, making it easier for companies to pass on some of the additional costs to their customers. The tariff increases are also motivating companies such as Atlantic Tool & Die to sell more of their products into the Chinese market. China’s domestic consumption is considered a longer-term growth engine for the country, and Beijing recently listed 20 measures it plans to take to further improve domestic consumption. Jinying Li, Director of China Federation of Logistics and Purchasing, took a longer-term perspective, presenting on China’s plans for infrastructure investment and development in Western China. Her messaging also emphasized the importance of China’s trade relationships with the ASEAN countries. The development effort includes a number of free trade zones and a free trade port in Hainan.

Final Word

Existing production operations and supply chain partnerships in China have taken a great deal of time, money, and effort to establish. Tariff increases are not yet permanent or substantial enough to force companies to search out alternatives. The uncertainty that hinders investment planning in China has a similar effect on planning for alternatives. If anything, the environment reinforces the value of supply chain risk mitigation efforts. Finally, intellectual property rights in China appear to be improving, as several attendees noted enforcement by government authorities. Regardless, conference attendees also noted that patent and branding infringements are still too common.

The Top Supply Chain Stories of 2018

Global Trade | By Steve Banker • 12/30/2018

Looking back at Logistics Viewpoints’ This Week in Logistics News roundups, the top supply chain stories of the year were the following.

Trump’s Tariffs

Tariffs were imposed on steel and aluminum in March. A trade war was threatened with Canada and Mexico, but a new NAFTA style treaty – more favorable to the US and less favorable to Mexico – was announced in September. The most noteworthy provisions, in terms of protecting US jobs, were changes to auto rules of origin, which dictate that a certain percentage of an automobile must be built from parts that originated from countries within the NAFTA region. Under the new rules, cars must be built with at least 75 percent of parts made in North America, up from 62.5 percent under NAFTA. Also, 40 to 45 percent of an auto will have to be made by workers earning at least $16 an hour.

The US and China also had several rounds of the US imposing new tariffs and China retaliating. President Trump and Chinese President Xi Jinping agreed at a Dec. 1 meeting to a truce that delayed by 90 days a planned Jan. 1 U.S. increase of tariffs to 25 percent from 10 percent on $200 billion worth of Chinese goods. China agreed on December 10^th to cut tariffs on U.S.-built cars and auto parts to 15 percent from the current 40 percent as a way of easing trade tensions and contributing to more productive talks. However, the US has not received documentation on the timing of the tariff reductions.

In December, for the fifth straight month, the US trade deficit increased. The Commerce Department announced that the trade deficit increased to $55.5 billion, the highest level since October 2008. The increasing trade deficit is likely linked to the ongoing trade war with China.

Britain Fumbles Brexit

Brexit is the impending withdrawal of the United Kingdom (UK) from the European Union (EU). It follows the referendum in June of 2016 when 52 per cent of those who voted supported withdrawal. On December 11^th, after working for the past few years to negotiate a deal with the EU that her party could support, Theresa May, the Prime Minister of the UK, delayed a recent Brexit vote in the face of mounting opposition. The next steps are not at all clear. If no deal is agreed to, EU treaties cease to apply, the UK faces steep tariffs, and the UK, and potentially Europe as a whole, falls into recession. This is what the Brits would call “a cock-up of epic proportions.”

With global supply chains, the logistics impacts go beyond just the UK and Europe but affect North America as well. But one example of this is that ships from Rotterdam, Hamburg and other European ports converge on the Port of Felixstowe in the UK which serves as a consolidation point where less-than-containerload (LCL) containers can be combined with other LCLs, and then shipped out as full-containerload shipments to North America. If this becomes a more expensive proposition, freight from Europe becomes more expensive.

Amazon Never Stands Still

Amazon’s biggest recent move occurred in 2017 when it acquired Whole Foods. By February of 2018, Many of Whole Foods’ in-house brands, including “365 Everday Value” items, were available to buy on Amazon’s website. But not via Instacart. Whole Foods ended that business relationship.

By March it was reported that Amazon was searching for bigger Whole Foods locations in cities that could serve as both grocery stores and urban distribution centers for delivering goods to online shoppers. According to sources, Whole Foods was also working with Regency Centers Corp., one of its largest landlords, on a project to convert parking areas at existing stores into stalls for Amazon delivery contractors to load up their orders.

But Amazon also made efforts to insure a profitable e-fulfillment business. In June, there were headlines with stories of customers being banned for too many returns.

With package theft on the rise, which in some cases causes Amazon to offer rebates, Amazon expanded a program for proof of delivery. In the program, delivery providers take a picture of where they put the package; the photo is included in the notice of delivery received by shoppers, so they know when it arrived and where to look for it.

Amazon has long made news for wacky sounding patents, the aerial blimp warehouse being the most obvious example. They were at it again this year. The company won a patent for robotic arms that can toss items around the fulfillment center. The patent described robotic arms that can use sensors to identify objects, figure out how best to grab onto them, calculate the required trajectories and fling the objects into chutes or bins. The patent reads: “The tossing strategy may be based at least in part upon a database containing information about the item, characteristics of the item, and/or similar items, such as information indicating tossing strategies that have been successful or unsuccessful for such items in the past.”

Another 2018 patent, envisioned technology that would emit ultrasonic sound pulses and radio transmissions to track where an employee’s hands were in relation to inventory bins, and provide “haptic feedback” to steer the worker toward the correct bin. The aim, Amazon says in the patent, is to “streamline time consuming tasks, like responding to orders and packaging them for speedy delivery. With guidance from a wristband, workers could fill orders faster.”

And Don’t Forget Uber

Supply chain professionals care about moving freight, not people. Nevertheless, Uber seeks to play in the freight space too. In August, Uber Freight announced the release of Uber Freight for Shippers, a desktop application platform that provides access to carriers and transparency into shipments. The Shipper app facilitates the posting of a load, receiving a quote on the load, and informs the shipper of information such as how long it takes Uber Freight to book the load, and the GPS location of shipment.

Uber Freight also worked to ditch the image of simply being a “load matching service.” Instead, the company innovated with programs such as “Take Me Home” designed to help drivers find loads that return them to their home bases. Similarly, in October, Uber Technologies announced Powerloop. Powerloop is a trailer leasing program, with trailers rented to participating carriers at $25 per day. This is a trailer pooling program that allows fleets, especially smaller owner-operators, to access pre-loaded trailers in the Powerloop network. The primary goal is to cut detention time at shippers and receivers.

Retailers Embrace Rapid Delivery to Compete with Amazon

There were dozens of stories on this. Among the most interesting:

In January, Walmart filed a patent that will allow customers to see fresh items before placing an order. The patent is named “Fresh Online Experience,” lets customers look at individual fresh items, such as produce, bakery items, and deli/butcher items, remotely before making a purchase. Once the customer approves the item, an “edible watermark” can be added so the customer can see that it is in fact the item they wanted when they pick up the order.

In February, Walmart’s Sam’s Club division partnered with Instacart for same-day grocery delivery at select locations across the country. By the end of October, the two companies this had expanded to Sam’s Club deliveries to over 1,000 more zip codes from nearly 350 Sam’s Club stores. Delivery is offered in as little as an hour.

Shipt, the online grocery delivery service that was acquired by Target in December of 2017, continued to expand its service in 2018. Shipt, which operates as an independent company, announced mid-year that it served approximately 50 million households with continuing aggressive growth plans.

Target announced a number of initiatives in March to a group of more than 100 financial analysts. Target said they would offer free two-day delivery for items over $35 and to Redcard holders. The retailer planned to utilize ship-from-store capabilities to help meet these delivery timeframes. The company was already actively shipping from 1400 of its 1800 stores. Target also announced expanding its drive-up service. Under this program, customers who prefer to stay in their cars can place online orders in advance and have a store employee load the items into their trunks within a few minutes of their arrival in the parking lot. The program was slated to expand from 50 test stores in the Twin Cities area last year to nearly 1000 locations by the end of 2018.

In November, Pizza Hut announced a partnership with Toyota on a new initiative: a pie-making truck. They seek to create the Tundra PIE Pro, a souped-up pick-up truck equipped with a robot pizza-maker in the truck bed. The truck can cook a pizza in seven minutes while on route to customers’ homes. One robot arm grabs a pre-made pizza from a refrigerator and transfers it to a high-speed, ventless TurboChef oven. A second robot arm transfers the cooked pizza to a round cutting board, slices it into six pieces and places it into an open box.

In early December, Walgreens and FedEx expanded their relationship to launch next-day prescription delivery nationwide. In June, CVS has announced a similar delivery service, but it was only available in a select number of cities.

Logistics Labor Costs Increase

In September it was reported that Walmart was offering referral bonuses of up to $1,500 to attract new drivers. Additionally, Walmart was seeking to shorten the on-boarding process for new hires to get them on the road faster. Walmart has historically been selective about its drivers, generally only hiring those who have at least 30 months experience over the prior three years. On average, new Walmart hires were earning about $86,000 a year with as many as 21 paid vacation days. It was reported that driver turnover rates in 2018 reached their highest level since 2015. This was driven in part by aggressive pay raises and drivers jumping to carriers offering better pay.

However, by the end of the year, off the record conversations with industry experts suggested that driver shortages were easing, demand for transportation was softening, and that industry forecasters were no longer forecasting steep transportation price increases for 2019. The bulge of Baby Boom truckers that are entering retirement age continues to cause concern however.

The Sustainable Supply Chain

On an almost weekly basis, companies announce plans to make their supply chains more sustainable.

In January, Budweiser switched all of its US brewing to renewable electricity and is adding a clean energy logo to its labels.

In February, the Hershey Company joined the fight to end deforestation in its supply chain. The commitment included two fundamental components: no new deforestation for cocoa through a strict commitment not to source cocoa from anywhere in the world where new deforestation has occurred, effective immediately; and agroforestry to support shade-grown cocoa through tree planting programs.

In June, Mars, announced plans to send a team of experts to Madagascar, the world’s largest exporter of vanilla, to support vanilla farmers in increasing vanilla production, but doing it in a sustainable way.

In February, Unilever became the first consumer goods firm to publicly disclose palm oil suppliers and mills that it sources from, both directly and indirectly.

In November, Mondelez put pressure on the palm oil supply chain to improve sustainability.

Several companies, particularly 3PLs, announced plans to add more electric trucks; in September the retailer Ikea announced it will make home deliveries with zero emissions in five cities by 2020. To meet the zero emissions goal, the company has said it will use mostly electric vehicles for all deliveries in Amsterdam, Los Angeles, New York, Paris, and Shanghai. The Port of Los Angeles also has zero emission goals. They have been testing zero-emission hydrogen-electric Kenworth T680 tractors and added a new hydrogen fueling station near the port.

In October, technology startup Flashfood released an app that aimed to help eliminate food waste. For grocery stores, this creates a revenue stream from items that would otherwise be thrown away. The Flashfood website shows pilots going on with Longo’s (Toronto), Farm Boy (London) and Buy-Low Foods (Vancouver).

Natural Disasters Impact Supply Chains

Every year there are stories about natural disaster impacting supply chains. This year was no different. Hurricane Florence which hit North Carolina in September, brought what has been described as the 1,000-year flood to North Carolina. The result, other than an estimated $40+ billion in damages, was disrupted freight activity out of North Carolina. This activity dropped by more than 60 percent and traffic patterns took weeks to return to near normal.

The go to source for global risks is the World Economic Forum’s World Risk Report. They published their 2018 report in January. The published a trend line for natural disasters that cause over a billion dollars in damage. It has been headed sharply up over the last few decades. 2018’s subsequent natural disaster insured that the trend line continues to go in the wrong direction.

“Everybody talks about the weather, but nobody does anything about it” is an old gag. But it is not quite true. In September, Coca-Cola and Mars, Inc. became among the first companies to join the Climate-Resilient Value Chains Leaders Platform. As the name implies, the new digital platform is intended to help companies build more resilient supply chains by identifying and mitigating climate risk.

A complete analysis of logistics trends, technologies, and services