This Week in Logistics News (May 7 – 13)
After more than two years, I finally traveled for a conference again. I was in San Diego for Kinaxis Kinexions, and it was a great trip (I will have a full recap of the conference next week). And I have to say, that while it was weird to be in a room with 400 other people and attending customer appreciation events, it was also nice to have that sense of normalcy that comes with the nature of my work. I was able to connect with colleagues and clients I haven’t seen in person for two years, and meet a lot of new, and very smart, people. It was also nice to finally start earning some airline miles again. But like any trip, it is always great to get home and sleep in my own bed. And now on to this week’s logistics news.
- Amazon recruiting mom-and-pop shops for rural deliveries
- Unilever to pilot mobile ice cream shops
- Kraft Heinz wants to solve its supply chain problems — in the metaverse
- Ford expedites freight to alleviate supplier disruptions in China
- IKEA plans to retool big box stores for online orders
- Biden to announce 3D printing initiative to boost US supply chain
- Port of Long Beach goes big on trains to relieve congested docks
- Retailers ration baby formula as shortages hit 50 percent
As e-commerce continues to grow, companies are looking at new and innovative ways to ensure they get orders delivered on time to their customers. While most of the buzz has been around emerging technologies such as mobile robots, autonomous cars, and drones, Amazon has quietly been exploring other options. Since at least last summer, Amazon has quietly been recruiting mom-and-pop shops in rural America to join an experimental delivery program. The company is paying participating small businesses a per-package fee to deliver Amazon orders within a 10-mile radius to their neighbors’ homes in states like Nebraska, Mississippi, and Alabama. None of these businesses are required to have prior delivery experience; they just need to make a commitment to deliver Amazon packages seven days a week, around 360 days a year, and a physical location to receive parcels each morning. Amazon hopes the new program could help it take more control over customer deliveries in sparsely populated areas and improve the delivery speed to these customers’ doors.
As the temperature rises, kids across the country get excited for the return of the ice cream truck. Well, if Unilever has its way, kids will not need to wait. At in select LA neighborhoods that is. Unilever is partnering with store-hailing app Robomart to trial a fleet of mobile ice cream shops powered by Robomart’s technology under Unilever’s virtual ice cream brand, The Ice Cream Shop. Customers hail the mobile Ice Cream Shop to their location using Robomart’s mobile app. Once it arrives, the user swipes across the app to open the vehicle’s door. Robomart’s checkout-free system allows customers to select their ice cream and walk away without tapping or pulling out a credit card. Robomart founder Ali Ahmed told The Spoon that the Ice Cream Shops would run seven days a week for at least 12 hours a day. Robomart employees will drive the stores (interaction with the stores is fully automated) and restock the mobile shops at Robomart operations hubs.
A few weeks ago, I wrote that UPS is entering the metaverse, having submitted several trademark filings for goods and services including “non-fungible tokens” (NFTs); “virtual goods, namely, packages, parcels, [and] shipping labels;” and “virtual retail shipping.” Kraft Heinz is joining the metaverse too. The company announced a deal with Microsoft to help secure its supply chain by, among other things, using automation to speed up operations and replicate the company’s facilities online. Kraft created “digital twins” in the metaverse that allow the company to problem-solve virtually. The tactics should help Kraft get its products to grocers more quickly and ensure that factories are running as efficiently as possible. The deal, which Kraft said is one of its biggest tech investments, “increases our dependability,” said Carlos Abrams-Rivera, Kraft Heinz President of North America, adding that it should help make “sure we’re there whenever you need us … regardless of the situation that the world is going through.”
Ford, which has 50 Tier 1 suppliers in China, is working to restart production in the country as manufacturing in major cities such as Shanghai remains snarled by COVID-19 lockdowns. Authorities in China are just starting to have a white list process to allow suppliers to resume production. Shanghai’s “white list” is its system of prioritization for companies that can receive approval from local authorities to resume production. Authorities initially prioritized approving many automotive companies, which must prove their factory campuses can comply with the city’s stringent virus-control measures. The company is leaning on expedited shipping lanes to pull ahead supply and mitigate COVID-19 disruptions in China. The company secured fast maritime shipments as well as “airlift capacity to protect our suppliers.” However, speeding up shipments and other steps to secure supply have come at a cost, as Ford is spending a lot of money on premium freight and other things to work around COVID escalations in China.
IKEA is set to invest over $3 billion in opening city-center stores and outfitting existing big-box locations to act as distribution hubs for online orders as the furniture giant looks to adapt to changing shopping habits. The retailer has for decades focused on sprawling, out-of-town stores that act as showrooms, storage depots and restaurants. But in recent years, IKEA has been experimenting with new formats, opening smaller, city-center stores, and working to build up its online offerings. The company said it would look to modify between 30 and 40 percent of its big-box stores so they include new additions like parcel distribution centers. Rather than increase the footprint of existing stores, it plans to redistribute space. IKEA is also investing in last-mile delivery services by improving handling capacity in stores.
President Biden on Friday will unveil a new initiative to boost 3D printing technology, making US companies less reliant on the global supply chain and increasing investment in small- and medium-sized businesses. The initiative, dubbed Additive Manufacturing Forward, will match large manufacturers with US-based supply companies to use 3D printing technology to manufacture parts. The 3D printing market is expected to more than double over the next decade. It was valued at $1.3 billion in 2020 but could rise to $2.9 billion by 2030, according to data from Transparency Market Research. Manufacturing some parts from a 3D printer is cheaper and more efficient than traditional supply chain methods. President Biden will announce the initiative while speaking at United Performance Metals, which offers supply chain solutions to businesses in the metals industry.
The Port of Long Beach is embarking on a massive overhaul of its cramped and aging rail yard to enable more cargo to get moved off the docks by train and to cut down on the number of diesel trucks that are currently hauling the vast majority of containers inland. Last month, the U.S. Maritime Administration issued a final environmental impact statement and approved the Pier B On-Dock Rail Support Facility, a $1.5 billion a project that will take about 10 years to complete. The approval clears the way for the port to seek federal funding for the undertaking that aims to put 35 percent percent of the import containers arriving from across the Pacific on trains. The new yard is the centerpiece of four rail projects at the port to move cargo faster, more efficiently and more sustainably as the unprecedented increase of imports from Asia shows no sign of slowing down.
Product shortages continue to be an issue, and baby formula is high on the list. Six states were showing out-of-stock percentages for baby formula higher than 50 percent for the week starting April 24, with the number of states nearing 50 percent more than tripling to 26 from just three weeks earlier. Nationwide the average was 40 percent, building from 31 percent in early April and 11 percent at the end of November. Shortages of formula began to take effect last summer amid supply chain disruptions, product recalls and inflation. Some retailers have responded with rationing, as purchases are being capped at some chains, including CVS, Target, and Walgreens.
That’s all for this week. Enjoy the weekend, and the song of the week, Going to California by Led Zeppelin.