For years, the e-commerce sector has been dominated by one name: Amazon. The company’s low prices, fast shipping, and ever-expanding range of services have long secured their spot at the top of the e-commerce mountain. However, the e-commerce landscape may be in for a shake-up. The Federal Trade Commission, under the direction of Chair Lena Khan, filed suit against Amazon on Sept. 26, alleging that the e-commerce giant has violated antitrust guidelines. While the case may have some at Amazon nervous about the future, shareholders remained undeterred: the company’s stock price rose 2.6% following the FTC’s announcement.
But Amazon isn’t the only company making headlines in the transportation industry. Carriers and retailers are lowering peak season hiring numbers as bleak consumer-spending forecasts force businesses to reconsider labor needs, and FedEx is further exploring automation as a means of mitigating ongoing labor shortages. Meanwhile, the UAW strike expanded to plants in Lansing, Michigan, and Chicago. Read on to learn the details.
The FTC’s accusations focus on Amazon’s primary e-commerce venue, Amazon.com, and allege that the website places undue pressure on sellers to lower prices and agree to anti-competitive marketplace terms.
“There is immediate harm that is ongoing here,” Khan said at a news conference ahead of the lawsuit announcement. “Sellers are paying one of every $2 to Amazon. Shoppers are paying higher prices as a result, not just on Amazon but across the internet. And the public as a whole has been deprived of the benefits of open and fair and free competition. And so that’s what this case is really about, and those are the harms that we’re looking to fix.”
For peak-season parcel shippers, performance is vital. A recent survey by e-commerce fulfillment software provider ShipStation found that, of the 1,000 customers surveyed, more than half expressed willingness to pay as much as a $9 premium for guaranteed same-day or next-day delivery. Additionally, the survey revealed that today’s shippers are more concerned with theft and loss than with on-time delivery, with nearly 39% of respondents planning on purchasing delivery insurance this holiday shipping season. Reporting on ShipStation’s survey, FreightWaves wrote, “Globally, surveyed consumers have an increased interest in delivery speed, parcel visibility, and flexible returns, while interest in delivery costs has decreased.”
With significant investment from companies like Amazon, UPS, and OnTrac, out-of-home service, in which a consumer travels to a designated pick-up location to take delivery of their shipment, has gained notable traction as a delivery method in recent years. However, despite the benefits in terms of delivery cost and emissions reduction, out-of-home service nonetheless faces a significant challenge: convenience-minded consumers. According to reporting from FreightWaves, a recent industry survey found that 85% of consumers still preferred at-home delivery.
As major carriers continue to explore the role of automation in their operations, FedEx has partnered with robotics firm Dexterity AI to test the functionality of in-vehicle robots during the loading process. Dexterity AI’s robot, DexR, can move autonomously to the back of a vehicle during loading, using AI technology to optimize the process. An automated conveyor system attached to DexR feeds packages directly from the FedEx sortation system, which can then be picked and packed simultaneously, boosting overall parcel throughput.
“Testing of the truckload technology is ongoing by FedEx with a goal to refine the technology and deploy commercially in the future,” according to a Sept. 26 FedEx statement obtained by Supply Chain Dive.
As consumer spending remains sluggish, retailers are cautiously moving forward with their peak season hiring plans, with most major companies planning to keep seasonal hiring levels unchanged from last year. According to Deloitte, holiday spending in 2023 is expected to slow significantly compared to previous years, with consumer spending expected to grow between 3.5% and 4.6%. This forecast is far lower than 2022’s 7.6% growth or 2021’s 15.1% growth.
Laura Ritchey, Chief Executive at e-commerce logistics firm Radial, told The Wall Street Journal that, for most companies, peak season hiring is on hold until companies have a better sense of consumer demand, “unless something changes from a macroeconomic perspective or there’s suddenly even more inventory in the supply chain.”
As Russia continues its invasion of Ukraine, new supply chain ramifications of the conflict continue to emerge. The trade imbalance between China and Russia has grown to roughly 150,000 TEU stranded in Russia. Meanwhile, imports from Russia to China have plummeted since the war’s onset. As containers continue to flow into Russia, Chinese exporters are scrambling to find available equipment. In Russia, however, congestion at transport hubs due to the container surplus has reached ‘critical’ levels, according to reporting from The Loadstar.
United Auto Workers President Shawn Fain has called for workers to strike at plants in Chicago and Lansing, Michigan. These strikes have brought some 7,000 workers onto the picket line and have increased the total number of UAW workers striking to roughly 25,000.
“I am still very hopeful that we can reach a deal that reflects the incredible sacrifices and contributions our members have made over the last decade,” Fain said in a Sept. 29 press release. “But I also know that what we win at the bargaining table depends on the power we build on the job. It’s time to use that power.”
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