This Week in Logistics News (August 25-29, 2014)

With summer unofficially ending this weekend, and school starting next week, the clock is ticking on summer vacation. So let’s not waste any time and go straight to the news…

Despite the regulatory hurdles and the skepticism of many, the drive to utilize drones for commercial purposes continues. I first wrote about the possibility of drones as a new transportation mode back in February 2013, and during the holiday season last year, Amazon announced its Amazon PrimeAir initiative, which some called a PR stunt, while others — like Google and UPS — saw it as a new competitive threat and opportunity.

Yesterday, Google introduced its Google Project Wing project, posting the following video on YouTube:

According to a Financial Times article, “More than 30 successful delivery flights have been made in Queensland, Australia, including a first aid kit, a water bottle and “dog treats”. The first flight carried chocolate bars for about 1km.” And here’s an excerpt from an in-depth report in The Atlantic:

In the two years [he worked on Project Wing], [Nick Roy’s] goal was simple: figure out if the idea of drone delivery made sense to work on. Should Google pursue creating a real, reliable service? Was it possible? Could a self-flying vehicle be built and programmed so that it could take off and land anywhere, go really fast, and accurately drop a package from the air? [Nick Roy is an MIT roboticist who took a two-year sabbatical to lead Project Wing].


The answer, Roy and [AstroTeller, director of Google X lab] say, is yes. They have not built a reliable system Google users can order from yet, but they believe the challenges are surmountable. Now, Google will begin growing the program in an ultimate push to create a service that will deliver things people want quickly via small, fast “self-flying vehicles,” as they like to call them.

Yes, there are many hurdles to overcome before drones as a transportation mode becomes a reality, including getting FAA approval. But we’re heading toward that future, and more than likely, it will look much different than what we’re imagining and testing today.

Drones are part of a bigger story — the push to provide same-day delivery to consumers — and Newegg is the latest online retailer to offer it. Here’s an excerpt from the company’s blog, which nicely summarizes the driving force behind the new service:

The online retailing industry has become extremely competitive in recent years. Massive Internet adoption rates across the world have prompted thousands of companies to take their brick-and-mortar storefronts online, and every single one of these businesses is competing for your patronage. It’s never been harder to convince online shoppers to choose our store instead of someone else’s, and figuring out new ways to satisfy these consumers’ needs is a daily struggle.


Newegg has been selling consumer electronics online since 2001 and is one of the first e-retailers to do so…And today, we’re proud to announce our latest solution to satisfy online shoppers’ needs: same-day delivery service.

The Newegg Express service is only available to customers that live within 50 miles of the company’s City of Industry warehouse in Los Angeles. For a $19.99 fee, orders placed by 11 AM will be delivered by 6 PM. According to the company, “The ‘Newegg Express’ will be testing the same-day delivery service throughout the Los Angeles metropolitan area through Christmas 2014. If successful, the program will expand next to Indianapolis, IN; Edison, NJ; and Memphis, TN.”

(For related news and commentary, see my recent post about Uber and its Corner Store project, which is yet another experiment in same-day delivery).

Finally, is SAP thinking about getting into the mobile device industry? The company filed a patent application for a “foldable information worker mobile device” in January 2013, which was published last month. According to a summary published in the Wall Street Journal:

[The patent] details a single mobile device that can be manipulated to function like a smartphone, tablet, laptop, e-reader or other mobile computing device…The tool would fold into a variety of shapes with different functions. For example, a user could use the cellphone mode to make a call, fold the device into smartphone mode to send an email, then fold it into laptop mode to edit a large document. Each “operating mode” would supposedly have similar functionality to its standalone counterparts. The device could reduce data synchronization and software compatibility needs, as well as the “cognitive burden” placed on those who have to use multiple devices to search for and extract relevant information.

SAP has not commented yet, but although I believe it’s unlikely the company will get into the hardware business (licensing the IP to a third-party is a more likely scenario), this news points to a larger industry trend: mobile devices, including smartphones and tablets, will become the dominant computing platform for users of enterprise software in the years ahead. And as we’ve already seen with the announced partnership between Apple and IBM “to transform enterprise mobility,” the leaders in the industry are placing their strategic bets and taking action.

And with that, have a great Labor Day weekend.

Song of the Week: “Bring on the Dancing Horses” by Echo and the Bunnymen