This Week in Logistics News (October 12-16, 2015)

By Adrian Gonzalez

I was up late last night watching the Mets beat the Dodgers in the National League Divisional Series. Although I’m a Red Sox fan now, the Mets hold a special place in my heart. They were my dad’s favorite team, and mine too as a kid growing up in Brooklyn. My passion for baseball, the reason I coach my sons today, all started sitting next to my dad on the couch, watching the Mets on television, both of us often walking away in disgust and disappointment.

I watched the end of the game alone last night. Nobody next to me on the couch. After watching the Mets celebrate on the field for a few minutes, I turned off the television and walked upstairs to bed.

In the darkness, in the silence, I missed my dad, again.

—

In this week’s supply chain and logistics news…

More large mergers and acquisitions were announced this week: AB InBev and SABMiller reach $100 billion deal, Dell is buying EMC for $67 billion, and in the 3PL industry, the convergence continues with DSV acquiring UTi Worldwide for $1.35 billion. Here are some details from the press release:

The acquisition of UTi is expected to increase DSV’s annual revenue by approximately 50%…Pro forma 2014 revenue amounts to approximately USD 13 billion (DKK 75 billion) and the combined workforce will grow to 44,000 people in 84 countries, 848 offices and 339 logistics facilities.

The Air & Sea Division will be significantly strengthened, and DSV will increase its industry specific capabilities across all divisions. Furthermore, DSV will now be truly global within contract logistics and expand into road freight activities outside Europe. This will enable the company to offer its customers a broader range of services.

The combined companies will have a more balanced geographical footprint with approximately 61% of revenue in Europe, Middle East and North Africa, 17% in Americas, 16% in Asia (APAC) and 6% in Sub-Saharan Africa.

Roger MacFarlane, chairman of the UTi board, said “We are operating in an industry where increasingly scale is critical [emphasis mine]. Joining forces with DSV delivers substantially greater client value and many future opportunities for our people, while it is financially very attractive for our shareholders.”

But is bigger better? Do customers really want to put more (or all) of their logistics eggs in one service provider basket? I plan to explore those questions next week with shipper executives at a 3PL client meeting. It should be an enlightening conversation! (For related commentary, see Is XPO Logistics Biting More Than It Can Chew?).

Moving on to disruptive technologies and services, Uber announced this week that UberRUSH, its same-day/same-hour delivery service, is now open for business in Chicago, New York, and San Francisco. UberRUSH was first announced in April 2014, but I’m sure that Amazon’s recent announcement of a competing service called Amazon Flex prompted Uber to put the spotlight back on itself.

Below is one of two promotional videos for UberRUSH. You’ll notice there’s virtually no traffic on the streets, parking spots are easy to find, it’s sunny and warm outside, there are no rain puddles or foot-high snowbanks anywhere. I’d like to see a winter version of UberRUSH in Chicago and New York, when it’s 17 degrees Fahrenheit and windy outside, with Uber drivers and bicyclists wearing parkas and gloves, their cars double-parked with the engines running to stay warm, stepping in puddles and climbing over snowbanks to retrieve the ordered items, then doing the same when they get to the delivery location. I really want to see that video, don’t you?

In retail technology news, Infor announced Infor CloudSuite™ Retail, “a new, modern suite of enterprise applications delivered in the cloud and designed for today’s retailing landscape.” In a separate press release, Infor announced that Whole Foods Market is the catalyst for this new suite:

“The new retail platform we will co-create with Infor will be unlike anything currently on the market, better leveraging major technology advances to deliver much more value at lower cost,” said Jason Buechel, executive vice president and chief information officer of Whole Foods Market.

Through a combination of cloud-based automation and more advanced, efficient processes for a wide variety of strategic merchandising and supply chain management functions, Whole Foods Market expects the new platform’s advanced analytics to provide insights that will drive business performance and operational efficiencies. The new platform’s advanced IT infrastructure is also expected to deliver more in-depth information and an enhanced shopping experiences for Whole Foods Market customers both in-store and online through Whole Foods Market’s digital channels.

According to the press release, Infor CloudSuite Retail is intended to support the following areas:

Item Management
Inventory Management
Order Management
Price & Promotions
Cost Management
Stock Ledger & Sales Audit
Replenishment & Allocation
Integrated Planning

What attracted my attention the most is that one of the key design principles for the suite is making it network-based — that is, “putting the supply chain on the network (e.g., items, orders) will enable retailers to orchestrate the supply across a network of suppliers and partners on behalf of customers. GT Nexus, an Infor company and one of the world’s largest cloud-based global commerce platforms, will help retailers to act as interconnected, agile business networks that operate far more efficiently and much more quickly than they do today.”

In short, it’s only been a few weeks since the acquisition was finalized, but Infor is already weaving GT Nexus into its solution roadmap and value proposition, which in my opinion (as a proponent of Supply Chain Operating Networks) is what truly differentiates this offering. For related commentary, see what I wrote back in August about the acquisition.

Finally, MatchBack Systems, “the leading software solution to automate, plan and communicate street-turns, launched MatchAdvisor™ to help customers realize street-turn savings, improve container utilization and reduce emissions.” Todd Ericksrud, president and CEO of MatchBack Systems, explains the industry challenge and their solution:

“Effectively pairing container delivery with available pick-ups is a huge problem in the maritime industry across the globe. Nearly 50% of international container miles are empty, primarily because companies lack the realtime information to generate effective street-turns. We also understand that each company operates on their own business rules, so what might work for one company may not apply to everyone. That’s why we developed MatchAdvisor – a highly configurable, automated platform that allows each customer to set priorities based on their unique container optimization needs. MatchAdvisor vets through hundreds (and sometimes thousands) of potential street-turns to quickly focus planners on the optimal matches for their company. Matches happen in seconds, so planners have the information they need quickly to communicate to their supply chain partners. Better yet – each successful street-turn match saves approximately $400 (USD).”

Todd walked me through the solution earlier this week and it’s very intuitive and easy to use. The main challenge is growing its network of users, but the company has made significant progress in a relatively short period of time. Put simply, MatchBack Systems is focused on a white space in logistics operations, where a lot of costs and inefficiencies exist. Has a better mousetrap finally arrived?

And with that, have a happy weekend!

Song of the Week: “Once a Day” by Michael Franti & Spearhead