This Week in Logistics News (March 7-11, 2016)

By Adrian Gonzalez

I’m a supply chain analyst by day and a cha-cha dance instructor by night — at least I was this week. For the past few nights, I’ve been helping my 10 year old son and 8 year old daughter choreograph a Cuban dance routine that they will perform tonight at their school’s Multi-Cultural Festival. They are dancing to a classic Cuban song, El Bodeguero by Orchesta Aragon, which I trimmed down to 2 minutes and 4 seconds because, well, why push our luck?

And with a hip shake and a step, here’s the supply chain and logistics news that caught my attention this week:

Back in mid-December, The Seattle Times reported that Amazon was negotiating to lease 20 Boeing 767 jets for its own air-delivery service (see my comments at the time). Well, Amazon confirmed the news this week. As reported by Reuters:

The leased planes will start to go into operation on April 1, Amazon spokeswoman Kelly Cheeseman said in an email. The duration of the leases will be five to seven years, lessor Air Transport Services Group Inc said. As part of the agreement, Amazon has the right to buy up to 19.9 percent of ATSG’s stock over five years at $9.73 per share.

And as reported in the Wall Street Journal: “The deal with ATSG would give Amazon control over roughly 15% of the packages it ships annually, according to Stephens Inc. analyst Jack Atkins.”

Amazon, it seems, shares the same philosophy my dad shared with me many years ago: Sometimes, when you want something to get done right, you just have to do it yourself.

Moving on to global trade, the outlook remains pessimistic for a rebound in growth. Back in September, the World Trade Organization estimated that world merchandise trade volume would grow 2.8 percent in 2015, down from its initial projection of 3.3 percent. It also stated that “trade growth in 2016 should pick up to 3.9 percent, down slightly from the last estimate of 4.0%, and still below the average for the last 20 years (1995-2015) of 5 percent.”

What’s most troubling, however, for proponents of free trade is the changing attitude of U.S. politicians, including the presidential candidates, toward global trade. As reported by Bob Davis in the Wall Street Journal this week:

After decades in which successive Republican and Democratic presidents have pushed to open U.S. and global markets, resentment toward free trade now appears to have the upper hand in both parties, making passage this year of a sweeping Pacific trade deal far less likely and clouding the longer-term outlook for international economic exchange.

File under emerging supply chain risk: the prospect of a trade war erupting and the consequences of the United States adopting a protectionist trade policy.

In technology news, JDA Software announced the release of JDA Connect™ for SAP HANA®, “a pre-packaged solution enabling rapid integration between JDA Manufacturing Planning and SAP ECC running SAP HANA.” According to the press release:

JDA customers leveraging SAP ECC will now be able to create seamless connections with JDA Manufacturing Planning, providing the ability to process planning data an order of magnitude faster, while decreasing implementation time and cost. Connecting all pertinent business objects between SAP and JDA, this rapid integration solution performs integrity checks and aggregations on data elements using different SAP HANA Views in real-time.

Meanwhile, Omnitracs, LLC announced the availability of Omnitracs Roadnet® Anywhere v3.9. Here are some details from the press release:

One of the biggest additions to the new version of Roadnet Anywhere is the ability to create and optimize multi-day routes. These routes can be created automatically based on existing orders customers have in the system, and can be configured to include any layover rules (e.g., information pertaining to hotel fees, equipment location restrictions, etc.) in an easily accessible format.

The update also includes significant enhancements to Insight — a data discovery and exploration tool that allows executives, managers, drivers, and data analysts to easily and quickly mine data. Specifically, the release allows users to dynamically change data drill down paths to determine root cause analysis and understand relations — unlike most BI (business intelligence) products, which have predetermined drill-down paths and require IT involvement to change these.

And with that, it’s time to put fresh batteries in my camera for tonight’s performance. Have a happy weekend!

Song of the Week: “Restless” by New Order