This Week in Logistics News (October 19-23, 2015)

I forgot to set my alarm last night, so I woke up late this morning. I have to admit, the extra sleep felt good, but now I’m paying for it trying to get back on schedule. With no time to spare, let’s go straight to the supply chain and logistics news that caught my attention this week:

Earlier this week I wrote about how e-commerce is contributing to the demise of malls and forcing retailers and third-party logistics providers to build new types of distribution facilities. E-commerce is also having a big disruptive impact on the mailroom operations of apartment buildings. As Laura Kusisto reports in the Wall Street Journal, “the biggest landlords in the U.S. are being crushed under a mountain of packages, leading one large apartment operator to stop accepting deliveries and others to experiment with ways to minimize the clutter.”

The article goes on to say:

The onslaught [of packages] has turned management offices of apartment buildings into de facto receiving centers as landlords grapple with recording packages, tracking tenants down to pick them up and finding places to store the parcels.

Camden Property Trust, the 14th-largest U.S. apartment operator by number of units…had received almost a million packages in 2014 [across all its properties], and the rate was increasing by 50% a year.

Each package results in about 10 minutes of lost productivity, Camden executives estimated. At a rate of $20 an hour for employee wages, that amounts to about $3.3 million a year, they said.

Where there’s a problem, there’s an opportunity. If apartment mailrooms are indeed turning into receiving centers, maybe software can help. Pitney Bowes, for example, offers a solution that helps companies track and manage inbound packages. For large apartment buildings, this type of software solution could alleviate the labor productivity problem. However, it doesn’t solve the storage issue. Maybe a new type of third-party logistics provider can help, especially in urban areas, where apartment buildings outsource their mailroom operations to a 3PL that manages the package receiving and delivery process for them.

In short, e-commerce is disrupting so many business processes, especially in logistics, but it is also opening the door to new opportunities.

“It’s deja vu all over again,” said the great Yogi Berra, who recently passed away. He wasn’t talking about the Highway Trust Fund, but the phrase applies perfectly to it. Funding for the Highway Trust Fund is set to expire next Thursday, October 29th, and for the 35th time since 2009, Congress is expected to pass yet another short-term extension. If Hollywood ever makes a sequel to the movie Groundhog Day, the storyline should be about a Congressman that wakes up every day on the eve of the Highway Trust Fund expiring, where he and his colleagues debate all day and then pass a short-term extension bill, only to wake up the next day to repeat the process all over again.

In other transportation news, the American Transportation Research Institute (ATRI) unveiled its list of the top ten critical issues facing the North American trucking industry. Here are the top five:

  1. Hours of Service: “For the third year in a row, the industry ranked the Hours-of-Service (HOS) rules as its top industry concern. For the past two years, major HOS impacts on supply chains were the impetus behind the first place ranking. In this year’s survey, carriers and drivers voiced their concern over the uncertain future of the current suspension of the rules.”
  2. Compliance, Safety, Accountability (CSA) program
  3. Driver shortage problem
  4. Driver retention
  5. Lack of safe truck parking: “Since first appearing as an issue in the annual survey, truck parking has been on the rise as an industry concern. It initially ranked 8th in the 2012 survey and has steadily climbed to the top five issues.”

When it comes to Hours of Service, it’s deja vu all over again too.

Thinking of buying a drone for the holidays? Already have one? Well, it looks like you’re going to have to register it with the Federal Aviation Authority (FAA) by the end of the year. According to Reuters:

The Obama administration said on Monday that it would require drone owners to register their unmanned aircraft as part of an effort to curtail rogue drone flights that pose a danger to commercial aircraft and crowded public venues.

U.S. Transportation Secretary Anthony Foxx announced the creation of a task force of private sector and government representatives to craft recommendations for establishing the first ever federal drone registry.

The recommendations are due by Nov. 20, and administration officials hope to have the registry in place before Christmas, when they say that more than 1 million new drones could be given as gifts to new untrained operators. The registration requirements would also apply to drones already in use.

I wonder how long it will take for cities and states to impose excise taxes on drones?

And with that, have a happy weekend!

Song of the Week: “First” by Cold War Kids