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As falling volumes and shifting consumer demands continue to force businesses to adapt, some of the largest businesses are considering innovative solutions to new challenges. For Target, shifting consumer demands mean new investments in next-day delivery, while Amazon’s falling volumes are forcing the e-commerce giant to reconsider bloated air cargo fleets. For logistics professionals large and small, we’ve rounded up the top 10 headlines you need to know.
In a Feb. 22 press release, mega-retailer Target announced a $100M investment in next-day delivery capabilities. The decision comes as consumer demand for fast, affordable shipping continues to grow following the pandemic. Gretchen McCarthy, Target’s chief global supply chain and logistics officer said “Through our sortation centers and Target Last-Mile Delivery capabilities, we’re able to move faster and with more precision — while controlling costs and expanding our network capacity — for years to come.”
According to Retail Dive, Target’s e-commerce ambitions rely on a “stores-as-hubs” model of omnichannel fulfillment: “Under the stores-as-hubs model, a Target-controlled truck can go to different stores multiple times per day and bring packages to a sortation center. From there, packages are placed on conveyor belts and automatically sorted by ZIP code before they’re loaded into delivery vans.”
The Air Line Pilots Association, the labor union representing FedEx Express Pilots, has said that contract negotiations with FedEx have stalled. The disruption to negotiations could lead the union to vote on a strike, potentially disrupting air operations at the parcel delivery giant.
“FedEx pilots are committed to reaching a deal with management, but we will not waiver in our commitment to deliver a contract that rewards pilots for their sacrifices to build FedEx into the global leader it is today,” said Chris Norman, Master Executive Council Chair of the Air Line Pilots Association, according to reporting from Supply Chain Dive.
Despite worries over upcoming negotiations at the parcel giant, Shelby McFaddin, senior analyst at Motley Fool Asset Management, recently rated UPS a “buy” on a Feb. 10 segment of CNBC’s Three-Stock Lunch.
“UPS is absolutely a story of excellent management, asset allocation, and delivering a value proposition to their customers,” said McFaddin.
In an expansion of the delivery company's grocery offerings, DoorDash has partnered with German discount supermarket Aldi to provide delivery from the store’s locations across 38 states. For shippers who have DoorDash’s “DashPass” membership, grocery orders of over $35 will include free delivery.
According to Grocery Dive, this partnership comes as DoorDash seeks to make headway in the crowded grocery delivery sector: “DoorDash remains closely associated with restaurant delivery, but the company has moved aggressively to grab market share in the grocery delivery space, where rival Instacart remains the dominant player.”
In a Feb. 15 announcement, the Digital Carrier Shipping Association committed to converting a full 50% of bills of lading to electronic files over the next five years. The association, which includes major carriers like A.P. Moller-Maersk, MSC, Hapag-Lloyd, and CMA CGM, hopes to transition to exclusively electronic BOLs by 2030.
“This heralds the start of a new era in container shipping as the industry transitions to scaled automation and fully paperless trade,” said Thomas Bagge, Chief Executive Officer (CEO), of the Digital Container Shipping Association, “Document digitalization has the power to transform international trade and requires collaboration from all stakeholders. I applaud the leadership of our members in coming together to achieve this important milestone.”
DHL has announced plans to move operations from its current facility in Carson, California, to a state-of-the-art facility in Redondo Beach. The facility, which will serve Southern California, will be 60% larger than the facility in Carson and will represent a $5 million investment on the part of DHL.
“The facility is situated closer to the DHL Express Gateway at LAX airport, and as such, we receive many shipments sooner at the facility, resulting in earlier deliveries for many customers in Southern California,” a DHL representative told Logistics Management, “It’s also in a much more convenient location for customers to pick up and drop off packages, and includes a larger parking area with an improved front counter area.”
In an effort to bolster supply chain performance, TreeHouse Foods will allocate roughly $65 million toward growth and supply chain initiatives. The increased investment in supply chain performance comes as TreeHouse Foods faces persistent production and service slowdowns, according to Supply Chain Dive.
Facing falling volumes, Amazon is reducing the size of its current air freighter fleet. The leases on eight of the e-commerce giant’s twelve 767’s, leased through Air Transport Services Group, are set to expire this summer. According to Supply Chain Dive, “Three of the planes will be retired, while the other five are expected to be re-leased or sold to other customers.”
In a Jan. 31 earnings call, UPS CEO Carol Tomé announced the expansion of UPS’s RFID initiative. Under the guidelines of the initiative, UPS employees and packages are tracked using RFID to “eliminate manual scans, reduce misloads and accelerate parcel throughput in the delivery giant’s warehouses,” according to Supply Chain Dive.
“We were very pleased with the initial results of our Smart Package Smart Facility RFID Initiative, where we are seeing fewer missed loads and higher productivity,” said Tomé, “As a result, this year, we plan to complete the RFID deployment in the more than 900 remaining buildings across the U.S.”
The global semiconductor shortage is hitting consumers where it hurts: their credit cards. As credit card manufacturers struggle to find the parts they need to make new cards, consumers are seeing significant wait times for replacement cards, according to the Washington Post: “Wait times of six weeks or more have become common — particularly for credit union members — compared with the five- to 10-day turnarounds seen in the past.”
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