This Week in Logistics News (October 30 – November 5)

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logistics newsThe wine industry has been hit hard in the US over the last couple of years. Pre-pandemic, this was mostly due to droughts and wildfires, which ravaged the West Coast, and destroyed millions of acres of vineyards. For 2021, there has been another hiccup, which the wine industry may refer to as the great supply chain kerfuffle. The issue has become supply chain and manufacturing constraints, which have delayed the deliveries of such essential items as bottles, corks, and even the wine itself for brokers. For some vineyards, they rely on specific barrels to give their wine its signature flavor; but reports are circulating that delays of 6 to 8 months are the norm for these barrels today. Wholesalers are now scrambling to get products from producers to retailers, which explains why our favorite wine from the early days of the pandemic is no longer available. This is simply another example of how the combination of capacity, manufacturing, and port delays impacts every aspect of our lives. And now on to this week’s logistics news.

Sometimes it is simply amazing to watch how a company builds momentum. This is certainly the case for Nuro, the autonomous home delivery start-up that has already secured partnerships with FedEx, CVS, Domino’s, and Kroger. On top of that, two months ago the company announced that it will spend $40 million on the construction of a manufacturing facility and test track for its fleet of self-driving robot vehicles. Now, Nuro has announced that it has raised $600 million in a series D round of funding from high-profile investors, including Tiger Global Management and Google. This brings its valuation to $8.6 billion, compared to “just” $5 billion last year. In addition to the funding, Nuro also revealed a five year “strategic partnership” with Google Cloud, which it said will support the “massive scale and capacity required to run self-driving simulation workloads,” as well as give Nuro access to machine learning smarts and storage for the vast amount of data generated by its vehicles.

What do Bill Gates, Steve Jobs, and Mark Zuckerberg have in common? Besides the fact that they are technology geniuses that built successful companies, they all dropped out of college. I’m not suggesting that this is the route for everyone, but 19-year-olds Aadit Palicha and Kaivalya Vohra may be looking to join the list. The two teenagers, who happen to be Stanford dropouts, launched Zepto, a 10-minute grocery delivery app startup. The company has now raised $60 million in funding from investors like Y Combinator and Glade Brook Capital to boost its presence in India’s crowded but fast-growing grocery delivery market. Zepto will be competing with multiple bigger online grocers such as the SoftBank Group Corp-backed Grofers and the Google-backed Dunzo for a slice of the rapid grocery delivery segment, the so-called Quick Commerce or Q-Commerce. With a network of micro-warehouses, it aims to raise the game and deliver within 10 minutes in neighborhoods of Bangalore, Mumbai and Delhi.

To prevent shipping logjams that have recently stymied the country’s supply chain, the Biden administration and California officials said Thursday that billions of dollars in infrastructure improvements are being fast-tracked for the state’s largest ports. The parties announced a new partnership aimed at aiding “multibillion-dollar” renovations to prep the ports of Los Angeles and Long Beach for the future. The partnership will be tasked with courting financial sponsors and connecting them to federal infrastructure grants to speed up badly needed port and highway upgrades.

Speaking of port congestion, this week West Coast ports announced a fourth attempt to clear the container backlog, which consisted of three new measures. First, the city of Long Beach tried to address a different part of the puzzle by issuing a temporary, 90-day waiver of its rule that containers could be stacked only two units high during storage. By allowing the boxes to be piled four or five levels high, the plan could help workers to move more containers off the ships floating offshore. Second, the twin ports said they would increase the pressure on companies to move their inventory off the dock by assessing a surcharge to ocean carriers for import containers that dwell too long on marine terminals. The ports will now charge carriers a daily fee for every truck-bound container dwelling nine days or more and for every rail-bound container that has dwelled for three days or more. And third, the Port of Long Beach announced a separate plan to move many of those lingering containers off the docks by shifting them to Utah through a deal with the Utah Inland Port Authority (UIPA) and Union Pacific Railroad. That move is intended to bring rapid relief from existing port congestion by optimizing rail deliveries between the two states.

The United States will lift tariffs on some steel and aluminum imports coming from Europe beginning December 1 as part of an agreement to ease trade tensions between the two countries. The agreement sets a quota allowing a certain amount of steel and aluminum to be imported from the European Union duty-free, with anything above that level subject to existing tariffs. In response, the EU said it will remove billions of dollars’ worth of retaliatory tariffs on bourbon and other American-made products that were set to increase next month. The deal will last two years, over which time the US and the EU will negotiate a new agreement to permanently lift tariffs and pressure other countries to reduce carbon emissions from the metal-making process.

It seems as though as Uber wants to deliver everything these days. Earlier this week, the company announced it is partnering with Bed Bath & Beyond and Buybuy Baby to add a new delivery category for babies and kids. Parents can now shop for diapers, wipes, first-aid kits, bath toys, and other baby needs from over 750 Bed Bath & Beyond and 120 Buybuy Baby stores in the US through the Uber and Uber Eats apps. To search for baby and kids products, Uber says to open the app and tap “baby” under categories or search with the baby emoji.

Two weeks ago, I wrote that Sephora has launched a same-day delivery service just ahead of the holiday shopping season, which is set up to deliver purchases within two hours. Now, rival beauty brand Ulta is partnering with DoorDash for same-day delivery aiming for “instant beauty gratification.” In select cities across the United States, including Boston, Atlanta, Los Angeles, Chicago, Houston, and Boise, Idaho, customers will have access to Ulta’s more than 25,000 products spanning skincare, cosmetics, fragrances and haircare on demand through DoorDash Drive, which provides direct delivery for businesses. To order, customers can visit Ulta’s website to add products to their cart, check local availability and choose the same-day delivery option while checking out. There is a $9.95 for each order. For orders over $99.99, a signature will be required.

Panic mode is starting to set in for the upcoming holiday season. That is unless, of course, you are Estee Lauder President and CEO Fabrizio Freda. Earlier this week, Freda expressed confidence in the cosmetic company’s positioning heading into the holiday shopping season. Freda said the following during an interview CNBC’s Jim Cramer on “Mad Money”:

“Imagine that in a period where there is a lot of supply-chain disruption, a lot of supply-chain issues because of Covid in different parts of the world, we were ready with our holiday shipments. Most of our holiday shipments have already been shipped to the retailers, so we’re already in the game well before the full holiday season starts, which is rare in this moment of disruption.”

That’s all for this week. Enjoy the weekend and the song of the week, Spill the Wine by Eric Burdon and War.

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