This Week in Logistics News (April 7-11, 2014)

By Talking Logistics

“I wish I could see my mother one last time.” That was my father’s dying wish. My father was the oldest of six children, and it is impossible for me to express in words how much he loved his mother, whom he had left behind in Cuba (along with his father and some of his siblings) decades earlier to pursue a better life in the United States.

The morning my father died, back in August 2008, my grandmother woke up in Cuba and asked her daughter if she had slept with her that night. “No,” my aunt replied. “Why do you ask?” “I felt like somebody was lying next to me in bed last night,” my grandmother said.

Today is my father’s birthday. He would have turned 79. And last month, my grandmother died, just a few weeks shy of her 100th birthday. What else is there to say?

In this week’s news…

Another sign that local delivery is hot right now: Uber, the company that is disrupting the taxi industry, is testing a new courier service in New York City called UberRUSH. According to the website, “messengers will pick up and deliver any item [on foot or bike] that a normal human can carry weighing no more than 30 pounds” — although there are some items the company won’t deliver, such as animals, alcohol, and fragile goods. Uber also doesn’t allow users to order items from retailers and have them delivered — users must have possession of the item already. Here are some more details from the website:

Rates are calculated based on zone pricing. If a delivery begins and ends within the same zone, it’s a flat $15. Each zone crossed during delivery is an additional $5. Additional stops may result in a higher fare.

To maintain the Uber standard you’re used to, all messengers pass Uber’s rigorous screening process. In order to be an UberRUSH partner, individuals must pass: a stringent background check; an in-person interview and screening; ongoing quality controls.

The last point about “ongoing quality controls” is critically important to the success of any local delivery service, as I wrote about a few weeks ago in The Most Critical Factor in Last-Mile Delivery: Managing the End-Customer Experience.

Uber is not the first to pursue this idea. As I wrote about in March 2013, Zipments offers a similar service in New York and Chicago, and even Walmart is thinking about having store customers deliver packages to online buyers. Grand Junction (a Talking Logistics sponsor) also allows interested drivers to sign up on its website, where there’s the following quote from a driver named Dominic: “It’s like Uber for delivery is finally here!”

The bottom line is that there’s a lot of experimenting going on with transforming local delivery as we know it, and whoever cracks the code first will reap the benefits — and probably get acquired by Amazon, Google, or eBay.

In other tech news, DiCentral acquired JDA’s on-demand warehouse management system (WMS). The solution was originally from SmartTurn, which was acquired by RedPrairie in May 2010, which was then acquired by JDA. Here’s a quote from the press release:

“The On-Demand Warehouse Management System contains functionality that is redundant with JDA’s core warehouse management solution and does not fit into our go-forward product portfolio,” said Jean-Francois Gagne, chief product officer, JDA.

The reason RedPrairie acquired SmartTurn back in 2010 wasn’t for differentiating functionality (you can argue the solution’s functionality was redundant back then too); it was to serve a specific segment of the market — i.e., smaller, more cost-sensitive companies with less complex distribution operations. In my opinion, the main reason JDA sold this solution is that it’s target market, deployment model, and value proposition don’t align well with the rest of JDA’s focus and solution footprint.

On the 3PL front, Con-way Freight announced it is outfitting its line haul trailer fleet with DuraPlate AeroSkirts (commonly known as “trailer skirts”) to increase overall fleet fuel efficiency and reduce carbon emissions. According to the press release:

Con-way Freight has contracted with Wabash [developer of the trailer skirts] to retrofit some 16,000 trailers used in the company’s line-haul operations. Installation of the skirts began earlier this year and is expected to be completed by August. Combined with the company’s other fuel-savings initiatives and technologies, the addition of the trailer skirts is expected to help reduce fleet carbon emissions by some 80 million pounds of carbon dioxide annually.

This is just another example of the actions carriers and shippers are taking to not only reduce transportation costs, but also reduce greenhouse gas emissions. For more insights on what’s happening in the industry with regards to sustainability, I encourage you to watch my recent Talking Logistics episode with Jason Mathers, Senior Manager at Environmental Defense Fund, where we discuss 5 Principles for Greener Freight.

Also this week, UPS and FedEx announced expansions of their networks. UPS “driven by strong demand from customers in the retail, manufacturing and healthcare industries…announced facility enhancements in three key North American markets [Calgary, Alberta, Canada; Hebron, Ky.; and Mira Loma, Calif.].” According to the press release:

The investment adds nearly 478,000 sq. ft. to UPS’s global supply chain solutions network, which now includes 528 facilities and nearly 31 million sq. ft. Services and capabilities offered at UPS supply chain facilities include: warehousing and fulfillment; inventory, transportation and returns management; custom kitting and packaging; and store-ready displays.

What are customers looking for in a logistics service provider? Stephen Hydrick, UPS vice president of North American distribution, provides some insight in this quote from the press release: “As [our customers] launch new products and experience seasonal spikes in volume, they must have the flexibility to scale up and down [emphasis mine]. These investments give customers that flexibility, and it’s vital to their success.”

Flexibility. Control. Visibility. Those are the operative words in a 3PL’s value proposition today.

Meanwhile, FedEx opened a new distribution center in the State of Mexico this week. “The new [$48 million] hub will become the centerpiece of domestic operations and will enable reductions in transit times, improved pick-ups, and more efficient deliveries throughout the country.” Here’s a quote from the press release:

“FedEx sees the potential that Mexico offers for our business and has invested nearly $160 million since 2011. If Mexican businesses increase their competitiveness and reach more markets, FedEx and its employees will benefit. It’s a win-win scenario and therefore, the company will continue to work and invest to accelerate trade in Mexico,” said Michael L. Ducker, COO and president, International, FedEx Express.

For related insights, join us next Thursday on Talking Logistics (April 17 at 12 ET) where my guest Troy Ryley, Managing Director at Transplace Mexico (a Talking Logistics sponsor), will share his perspective on the growing importance of US-Mexico trade.

And with that, have a happy weekend!

Song of the Week: “Caballo Viejo” by Roberto Torres (my father’s favorite song)