This Week in Logistics News (November 30 – December 4, 2015)

My daughter’s second grade class is sharing their work this morning, so in the interest of time, let’s go straight to the supply chain and logistics news that caught my attention this week:

Acquisitions in the logistics space continue. In addition to announcing record quarterly results, Descartes announced this week that it acquired Oz Development, a provider of application integration solutions, for $29.5 million in cash. According to the press release:

For over 10 years, Oz has been helping a growing SMB community connect to, and integrate with, leading ERP, CRM, e-commerce and supply chain platforms. Oz’s strong partnerships with key SMB channels, such as UPS and NetSuite, have helped it build this community to include nearly 7,000 end customers. Oz’s solutions address a number of pain points for e-commerce shippers by automating logistics and supply chain processes, including order fulfilment, inventory management/scanning, and shipping.

Back in January 2014, I spoke with one of Oz Development’s customers, Jordan Kivelstadt, founder and CEO of Free Flow Wines, a pioneer in the “wine on tap” movement that Jordan and his partner launched in 2009. Watch the short clip below where Jordan discusses how the company uses Oz Development with NetSuite:

This deal underscores a couple of trends I’ve been talking about this year: the growing focus by supply chain and logistics software vendors on meeting the needs of small and mid-sized businesses (SMBs), and how APIs, web services, and other enhancements in integration technologies (between systems and trading partners) are helping companies to enable new business processes faster and more cost effectively than ever before (for related commentary, see TMS for SMB: Breaking Down the Barriers). For Descartes, this acquisition greatly increases its customer network in the SMB space, and it opens the door to new opportunities in the e-commerce and trade compliance realms.

Pigs flew over a frozen hell this week, which means Congress actually passed a multi-year transportation bill. The 5-year, $305 billion highway bill passed the Senate 83-16 after a 359-65 vote in the House. Of course, lawmakers couldn’t agree on a sustainable way to fund this bill, so they worked some accounting magic. As reported in the WSJ, “the package raised money through a set of budget maneuvers that many lawmakers acknowledged were gimmicks, including selling oil from the Strategic Petroleum Reserve, hiring private debt collectors to collect unpaid taxes, and taking money from a Fed surplus account that acts as a sort of cushion to help the bank protect against potential losses.” And speaking of pigs, there was plenty of pork included in the bill to win support, including renewing the Export-Import Bank and restoring a crop-insurance subsidy. In short, this bill is arguably better than passing yet another short-term fix, but just barely.

As you probably saw by now, Amazon released a video this week highlighting a new and improved version of its Amazon Prime Air drone. Among the changes and improvements from the original design: it’s a hybrid system, taking off and landing vertically like a quadcopter, but then switching to horizontal flight mode like an airplane for the journey; it can fly for 15 miles at 55 miles per hour; and it uses sense-and-avoid technology and scans the area at the destination location to find a spot to land (marked in the video by the customer placing a mat with the Amazon logo in their yard).

The video clearly demonstrates how Amazon’s vision around drone delivery continues to evolve, along with the technology behind it. I still believe, however, that using drones to deliver medicines to patients in remote areas, or using drones in humanitarian/disaster relief operations or in response to medical emergencies, is where we’ll see the first truly beneficial applications of this transportation technology. Also, as I commented a few weeks ago, although using drones for customer deliveries gets all the buzz, their use within distribution centers and yards for inventory management is equally compelling (see my comments about Walmart and PINC Solutions, which recently received FAA approval to initiate commercial operations in U.S. airspace).

Finally, remember Hyperloop, Elon Musk’s vision for a fifth mode of transportation that would allow passengers to travel from Los Angeles to San Francisco in 35 minutes, traveling at a top speed of almost 800 miles per hour? Well, as Alexander Chee reports in a long piece in the Wall Street Journal, “it is quickly and quietly becoming a reality.” Two startups — Hyperloop Transportation Technologies (HTT) and Hyperloop Technologies Inc. (HTI) — are working toward “Hyperloop’s Kitty Hawk moment: when the first working pod shoots down a full-size tube.” Will it happen in 2016? Will this end in a breakthrough innovation or a supernova bust? Stay tuned, the fun is just beginning.

And with that, have a happy weekend!

Song of the Week: “Mountain At My Gates” by Foals

Note: Descartes is a Talking Logistics sponsor.

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