This Week in Logistics News (May 30 – June 3, 2016)

By Adrian Gonzalez

What was your first concert? Mine was UB40 my freshman year at Cornell, followed by Tracy Chapman a few months later. I can’t say I was a big fan of either prior to going to the shows, but after getting swept up by their live music and singing, I bought their albums the next day.

This coming Tuesday, my wife and I are bringing our oldest daughter to her first concert: Florence + The Machine, with opening act Of Monsters and Men. We’re all big fans already and own several of their of albums; the only question is which one of us will lose our voice first by the end of the night.

Now, on to this week’s supply chain and logistics news…

One of my supply chain and logistics predictions for 2016 was that drones would have a breakout year — not in delivering packages to consumers, but in yard and warehouse management. Last November, for example, Kenco Group announced that it was working with PINC Solutions on exploring the potential to deploy drones for yard management at Kenco distribution facilities. And this week, Reuters reported that Walmart is “six to nine months from beginning to use drones to check warehouse inventories in the United States.” The company demonstrated the use of drones to reporters this week at one of its distribution centers. According to the article:

“We are still in early phases of testing and understanding how drones can be better used in different types of business functions,” said [Walmart’s Vice President of Last Mile and Emerging Sciences Shekar Natarajan.]

The remotely controlled drone captured 30 frames per second of products on aisles and alerted the user when product ran out or was incorrectly stocked. Natarajan said drones can reduce the labor intensive process of checking stocks around the warehouse to one day. It currently takes a month to finish manually [emphasis mine].

From one month down to one day — now that’s a significant reduction in time and labor savings! Having drones flying around the inside an industrial building is not as sexy or exciting as having a drone drop off a package at your doorstep, but who cares about sexy when you have a real and executable business case before you. Forklifts, meet your new co-workers, the drones!

Walmart also announced that it is piloting grocery delivery using Uber, Lyft and Deliv. In a blog post published today, Michael Bender, EVP and Chief Operating Officer, Walmart Global eCommerce, writes:

Walmart will start with tests of grocery delivery through Uber and Lyft, which we expect to start within the next two weeks in Denver and one other market. This is in addition to a very quiet Sam’s Club pilot that started in March with Deliv involving delivery of general merchandise and grocery for business members in Miami.

Here’s how it works for Walmart grocery customers: A customer in one of the test locations places their grocery order online and selects a delivery window. Our personal shoppers, highly-trained Walmart associates, will carefully select and prepare their order. Then, our team may request a driver from one of these services to come to the store, pick up the customer’s order, and take it directly to the customer’s location. It’s all seamless to the customer. They pay us our normal $7-10 delivery charge online, and make no payment to the driver. We’ll also let them know their order is being delivered by a driver from Uber or Lyft. [The process at Sam’s Club with Deliv is very similar].

Picking up and delivering groceries to somebody’s house is not the same as picking up a passenger and driving them somewhere, so Uber and Lyft will have to adjust their operating models and driver training to make it work. That said, if you’re wondering why investors are pouring money into Uber, Lyft, Didi Chuxing, and others, it’s not for their passenger transportation services; it’s for the bigger opportunities before them in logistics services, especially last-mile deliveries.

Speaking of last-mile delivery, Schneider National made a big move yesterday, acquiring two leading service providers in the field, Watkins & Shepard and Lodeso. Here are some details from the press release:

Both acquisitions complement the growing Final Mile+™ service from Schneider, which provides customized home, commercial and retail delivery with white-glove service.

Based in Missoula, Montana, Watkins & Shepard is the leading provider of LTL, truckload and logistics services for difficult-to-handle goods, such as furniture and floor coverings, across North America. The company was founded in 1974 and has more than 1,300 employees, including nearly 800 drivers based out of 20 terminals across the U.S.

Lodeso is the leading final-mile logistics solution provider, specializing in delivery of overweight, oversized and difficult-to-handle goods, including furniture and mattresses. It uses proprietary technology developed by its in-house experts to handle supply chain complexities within the national home delivery industry. Lodeso is based in Zeeland, Michigan and has more than 50 employees and nearly 600 agents across the U.S.

In today’s Wall Street Journal, Mark Rourke, Schneider’s chief operating officer, says “As we talked to our customers and looked to where the market is growing, what we heard was there are pain points—product categories that don’t run through the parcel network for home delivery. We felt that was an underserved need.”

It’s interesting that Schneider specifically highlighted Lodeso’s proprietary technology in the press release. “In addition to continuous delivery tracking throughout the supply chain, this unique technology platform allows delivery agents, customers and all appropriate parties to handle any issues in a proactive manner.” I have not been briefed on this technology, but it sounds like it’s focused on addressing what I’ve called the most critical factor in last-mile delivery: managing the end-customer experience.

Finally, speaking of technology, Enspire Commerce announced the launch of the latest version of RetailPoint®, “its next generation point of sale solution that helps small to mid-sized retailers empower associates to deliver personalized customer service experiences that improve service and drive additional sales.” New functionality includes:

Standard mobile capabilities (mPOS) that allow retailers to interact with clients anywhere in the store and conduct fast mobile transactions via smartphone or tablet.

Customer profiles which can be shared across every channel, enabling retailers to offer in-store returns for online purchases, view customer order history and items remaining in an online shopping cart, and much more.

Enterprise inventory visibility enabling retailers to fulfill orders that might be out of stock in that particular store through other store locations, partners, locations and channels. With visibility to all inventory, in-store and online, retail associates can ship an item from any store location, warehouse, distribution center, or have items drop-shipped from a vendor to save the sale and optimize customer service.

This is yet another example of how technology providers are focusing on meeting the needs of small and mid-sized businesses, where plenty of growth opportunities exist.

And with that, have a happy weekend!

Song of the Week: “You’ve Got the Love” by Florence + The Machine