I celebrated my 46th birthday this week, and commemorated the 8 year anniversary of my father’s passing, by going to the beach. It’s become an annual tradition, as wrote about in a post on LinkedIn this week (“The Moon in Daylight”). I actually wrote that post five years ago, but I shared it again because it still conveys my thoughts and feelings today. It’s also nice to take a break from usual stories and commentary, if only for a day.
Now, on to this week’s supply chain and logistics news….
- First branded ‘Prime Air’ jet in Amazon’s fleet to fly at Seafair (Seattle Times)
- Wal-Mart in talks to buy online retailer Jet.com (Reuters)
- Alphabet will begin testing its delivery drones inside the US (The Verge)
- TPG Capital to Acquire a Majority Stake in Leading Cloud-based Logistics Platform Transporeon
- MercuryGate International Appoints Executives to Strategic Roles
- Cloud Logistics Announces Banner Results For The First Half of 2016
- Verizon to buy vehicle management company Fleetmatics for $2.4 billion (Reuters)
- CommerceHub reaches deal with BJ’s Wholesale Club (Albany Business Review)
- Wal-Mart installs new worker scheduling system in 650 U.S. stores (Reuters)
- Heavy-Duty Truck Order Slump Deepens (WSJ – sub. req’d)
As reported by The Seattle Times, “Amazon will fly its latest Boeing 767 widebody jet freighter, publicly revealing the new ‘Prime Air’ branded livery of its fast-growing fleet of used cargo planes” at today’s Seafair aerial display over Lake Washington near Seattle. The video below shows the jet freighter getting painted.
Here are some excerpts from the article:
Amazon already is operating a fleet of 10 Boeing 767 freighters, flying daily out of its air hub in Wilmington, Ohio. Within two years, it expects to have 40 similar used cargo jets connecting its package fulfillment centers across the U.S.
“Right now, everything going on those planes is inventory held in Amazon fulfillment centers and sold on the Amazon website,” [Dave Clark, Amazon.com’s senior vice president of worldwide operations] said. “And we have more than enough package supply to utilize the 40 planes we’ve procured.”
Clark also said Amazon for now is focusing its air operation on the U.S. domestic market and has no plans yet to expand internationally.
So, is Amazon a disruptor or a distraction? That was the main question I addressed at the SMC3 Connections Conference a few weeks ago, and I will share my thoughts in an upcoming post. But if you’re in the disruptor camp, you might point to Walmart’s interest in buying Jet.com as another proof point. As reported by Reuters:
Wal-Mart Stores Inc is in talks to buy Jet.com, a year-old online rival, as part of a multibillion-dollar revamp of its e-commerce division aimed at boosting online sales growth…The world’s largest retailer is playing catch up with Amazon.com Inc on distribution and technology. The acquisition could give it access to Jet.com’s innovative pricing software, its network of warehouses and customer data.
A July 2015 survey by consulting firm Kantar Retail showed the extent to which Amazon had eaten into Wal-Mart’s customer base. The survey found that 48 percent of shoppers at Wal-Mart Supercenters were placing orders weekly or monthly on Amazon.com, double the percentage shopping at that frequency on Wal-Mart’s own site.
Buying Jet.com might strengthen Walmart’s e-commerce capabilities from a technology and distribution network perspective, but I’m not sure it directly addresses Amazon’s true killer competitive weapon: its Amazon Prime subscription service. More on that in my upcoming post.
Moving on to transportation management software news, private equity firm TPG Capital has entered into a definitive agreement to acquire a majority interest in Transporeon from The Riverside Company and other shareholders. According to the press release:
Transporeon offers various connectivity-focused applications for the different stages of freight execution, providing shippers and carriers with meaningful cost savings, productivity gains, and service-level improvements by enabling them to communicate, collaborate, and transact efficiently. Transporeon is the leading cloud-based logistics platform with the largest network of its kind, connecting more than 1,000 shippers with more than 57,000 carriers across the world [emphasis mine].
This is yet another example of how investors are recognizing the value potential of network-based solution providers, a trend I wrote about just a few weeks ago in Follow the Money: Investments Rise in Supply Chain Operating Networks. Simply put, everyone in the market is starting to recognize that for business processes involving many external trading partners, network-based solutions are the best platform (see Where to Find Supply Chain Innovation).
Finally, as reported by Reuters, “Wal-Mart Stores has implemented a new system for scheduling workers at 650 U.S. stores, as it aims to improve staffing levels during peak shopping times and offer more certainty over hours for employees.” This move underscores a prediction I made a back in December — i.e., that more companies will place a greater focus on workforce planning, one of the weakest links in their supply chain transformation journey. As Doug Pollard from Quintiq said in an episode of Talking Logistics earlier this year: “Companies are starting to realize that the human capital element is extremely important to their bottom line, as well as their customer service.” For related commentary, see How Are Leading Companies Approaching Workforce Planning?
And with that, have a happy weekend!
Song of the Week: “There Will Be Time” by Mumford & Sons feat. Baaba Maal