This Week in Logistics News (March 25-29, 2013)

Lots of interesting news this week related to e-commerce fulfillment and same-day delivery, so let’s get right to it.

Walmart is thinking about taking the crowdsourcing model to final-mile delivery. According to a Reuters article:

Wal-Mart has millions of customers visiting its stores each week. Some of these shoppers could tell the retailer where they live and sign up to drop off packages for online customers who live on their route back home, [Joel Anderson, chief executive of] explained.

Wal-Mart would offer a discount on the customers’ shopping bill, effectively covering the cost of their gas in return for the delivery of packages, he added.

“This is at the brain-storming stage, but it’s possible in a year or two,” said Jeff McAllister, senior vice president of Walmart U.S. innovations.

The article highlights a startup, Zipments, that’s been using a similar model in New York and Chicago. According to the company’s CEO, the biggest obstacle hasn’t been theft or late deliveries, but obtaining insurance and licenses. Zipments also shifted away from pure crowdsourcing where anyone can serve as a courier to screening drivers before allowing them to participate in the network.

As the article highlights, there are various legal and privacy issues that Walmart would have to overcome for this model to work. And technology will have to play a role too in order for Walmart to manage this process efficiently and cost-effectively. But whether it’s this crowdsourcing model or some other idea (see “Drones: The Birth of a New Transportation Mode”), I am convinced that we will see new distribution models emerge in the years ahead, especially when it comes to final-mile delivery.

In related news, Walmart also announced that it will install delivery lockers at a dozen stores starting this summer, following in the footsteps of Amazon and Google, which bought BufferBox in December 2012. Meanwhile, Google officially launched its same-day delivery service, Google Shopping Express, in San Francisco yesterday. According to a Reuters article:

Companies taking part in the test include national retailers such as Target, Office Depot Inc, Staples Inc and Toys ‘R’ Us Inc and smaller, local firms such as Blue Bottle Coffee and Palo Alto Toy & Sport.

Google is working with local courier companies that pick up products from local stores and deliver them to shoppers’ homes.

Do customers really want same-day delivery or just more flexibility in specifying a delivery time? Which types of products does it make sense to offer same-day delivery? Will this be a loss-leader for retailers or can they actually make money at it? Why is Google even getting into same-day delivery? There are many questions but few answers at this time.

Moving on to other news, if you rely on UPS for your parcel shipments, you should start thinking about a Plan B in case the company and the Teamsters don’t reach a new labor agreement by the end of July when the current agreement expires. Negotiations are not going well according to a Logistics Management article. Among the issues: UPS wants Teamster workers to pay a small copay for their health care premiums, but as the Teamsters’ general secretary treasurer is quoted in the article, the Teamsters “will not pay $90, $9 or 9 cents” toward their health care. Other issues mentioned by the union include production harassment, excessive overtime, understaffing, technology, trumped up discharges for “dishonesty” and other harassment.

Although I don’t normally comment on awards, I make an exception this week to highlight C.H. Robinson being been named one of America’s Top Workplaces by WorkplaceDynamics (the company was ranked #65 nationwide among 872 organizations in the survey). In a blog posting about growing talent and rewarding success in the workplace, Angie Freeman, VP of Human Resources at C.H. Robinson, says, “The recipe is quite simple: hire great talent, create an environment that allows for long-term growth, give employees the power to make decisions and drive their own career, and provide incentives that reward success.” The reason this news caught my attention is because it underscores one of the four important factors shippers should consider when evaluating 3PLs: their investment in talent development and retention.

Finally, the news this week about a trucker selling stolen cheese reminded me of a similar story from a couple of years ago (see “Stolen Tomatoes Raise Serious Transportation Issues”). The victim in this case didn’t follow one of my three tips to prevent cargo theft: know who you are working with. As I wrote last year, “Thieves are getting more creative and sophisticated. This means you must have a robust carrier qualification process and follow it consistently. The same is true for the brokers you work with and the employees you hire. Trust, but verify.”

Have a happy weekend!

Song of the Week: “Talk Talk” by Talk Talk

(Note: C.H. Robinson is a Logistics Viewpoints and Talking Logistics sponsor)