This Week in Logistics News (October 9 – 15)

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logistics newsI just read an interesting article about Chris Johnson, former top sales executive at Apple and CEO of JC Penney. It seems that Mr. Johnson is on a quest to “remake the retail world” as he takes his new company public. The company in question is Enjoy, and it runs mobile retail stores for its partners. Mr. Johnson sees the company as a combination of white-glove delivery service and an army of door-to-door salespeople. The company differentiates itself by solving a problem for high-end electronics makers and luxury brands – owning the final part of the customer experience. Instead of shipping a new smartphone to someone’s house and having it left on the front steps, one of Enjoy’s delivery workers will personally deliver and set up the phone, and then sell additional services. The company has grown, with revenue this year expected to rise to $109 million from $15 million in 2018, according to filings with the Securities and Exchange Commission. The company says it will be profitable in 2023 and is telling investors it plans to reach $1 billion in sales in 2025. That is a lot of money for personalized delivery. And now on to this week’s logistics news.

Alphabet subsidiary Wing has launched a pilot program that will have its drones fly products from the rooftops of shopping centers. Wing has been operating in Logan, Australia over the past two years, delivering items from businesses within a mall to customers below. The new program will be the first time conducting deliveries from participating merchants’ existing location instead. Wing has been flying its drones from the rooftop of Logan’s Grand Plaza since mid-August, delivering sushi, bubble tea, smoothies, and other products from merchants in the shopping center. Starting this week, the drones will also deliver over-the-counter medicine and personal care and beauty products. While it remains to be seen whether the Grand Plaza pilot will lead to rooftop deliveries from more locations, Wing has been quite successful in Logan. It has already made more than 50,000 deliveries in the city this year alone and has celebrated its 100,000th delivery overall last August.

The hit from China’s energy crunch is starting to ripple throughout the globe. Not only is the extreme electricity shortage in the world’s largest exporter set to hurt its own growth, but the impact on supply chains could also crimp a global economy struggling to emerge from the pandemic. The timing is particularly bad, with the shipping industry already facing congested supply lines that are delaying deliveries of clothes and toys for the year-end holidays. It also comes just as China starts its harvest season, raising concerns over sharply higher grocery bills. Beijing has been scouring for power supplies as it tries to stabilize the situation. The impact on the global economy will depend on how quickly those efforts bear fruit. Many Chinese factories reduced production for this week’s “Golden Week” holiday, and economists are closely watching whether power shortages will return as they ramp up again.

In a partnership with Instacart, Stop & Shop has launched Stop & Shop Express, an online shopping service providing delivery of groceries, convenience products, and household essentials in as little as 30 minutes. For the service, Stop & Shop joined Instacart’s Convenience Hub, a new product experience on the Instacart Marketplace designed to streamline convenience shopping. The companies noted that Express Delivery is aimed at supplementing customers’ weekly grocery shop by offering as fast as 30-minute turnaround when they just need a few items quickly. More than 30,000 products, such as prepared foods, snacks, beverages, paper goods, cleaners, and baby care, among other items, are available through Stop & Shop Express.

Adidas has partnered with online resale company ThredUp to launch a new program where consumers can send in used apparel and accessories to be resold. Using ThredUp’s Retail-as-a-Service platform, the program aims to “extend the lifecycle” of clothing items by rewarding consumers with points in exchange for their old gear. The program, dubbed “Choose to Give Back,” comes amid Adidas’s ongoing efforts to reduce plastic waste. With the new program, users of the Adidas Creator’s Club app can generate a prepaid shipping label to send in their old clothes and accessories. The program supports products from any brand or category, so consumers can send in more than just Adidas sportswear. “Choose to Give Back” is expected to launch stores and online early next year.

Walmart-owned Sam’s Club is betting consumers will go big this year with their holiday celebrations. The membership-only warehouse club said Friday it had huge gatherings and pent-up demand in mind as it selected and ordered holiday merchandise. It doubled the size of popular holiday side dishes, mashed and sweet potatoes, to 4 pounds from 2 pounds. It developed desserts meant to please a crowd, such as Christmas-themed cupcakes and brownie-topped cheesecake. And it launched a new service that will drop six- and 12-bottle packs of wine at customers’ doors to help them stock up for a party. The company is also bringing back larger turkeys, after the market shifted to smaller gatherings and smaller birds in 2020.

Tesco has announced that EO Charging has won the contract to power Tesco’s electric vehicle (EV) fleet of electric vans. The grocer plans to roll out the fully electric fleet by the end of 2028, after releasing 30 this year with plans for a further 150 by next year. The first phase of the partnership with EO will mean that the company will supply over 200 AC fast chargers and five DC rapid chargers across five sites. The charging depots in Lakeside Oxford, Glasgow (two sites) and Enfield will serve day-to-day charging requirements as well as emergency cover in case of short turn-around times. The partnership with Tesco will also mean that EO provide upfront consultation for charging hardware, 24/7 support, maintenance and onsite Service Level Agreement (SLA) for mission critical charging infrastructure. The grocer’s charging infrastructure will be managed by EO Cloud which will handle depot software, charge scheduling, site load management, vehicle telematics integration and energy data to reduce infrastructure installation costs and optimize fuel cost per vehicle.

The US Food and Drug Administration (FDA) has entered into domestic mutual reliance agreements with California, Florida, Utah and Wisconsin. Mutual reliance agreements mark a coordinated effort between the FDA and individual states with goals to reduce human foodborne illness outbreaks, reduce duplication of regulatory oversight, and increase public health protection by focusing on areas of higher risk. These new mutual reliance agreements help the FDA to work in cooperation with the states to rely on, coordinate with, and leverage one another’s work, data, and actions to achieve a safer national food supply. As envisioned in the FDA Food Safety Modernization Act (FSMA), the Partnership for Food Protection, and the New Era of Smarter Food Safety blueprint, the mutual reliance agreements will enhance the existing relationships with states and government counterparts, moving the nation toward an Integrated Food Safety System.

The semiconductor production shortage that began afflicting the world last year shows no signs of letting up. Most indications are that it is getting worse. The issue has been exacerbated by the pandemic’s surge in Southeast Asia, where many key chip and electronics-assembly facilities are based. Lead times soared to an average of nearly 22 weeks in the third quarter compared with just over 13 weeks at the end of last year. The problem is even more acute in certain segments of the chip market. MCU controllers (a key component in automobiles) are now averaging lead-times of around 32 weeks, or nearly three times the historical norm. As a result, car makers continue to cut production targets.

That’s all for this week. Enjoy the weekend and the song of the week, Phish’s You Enjoy Myself.

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