This Week in Logistics News (October 2-6, 2017)

By Adrian Gonzalez

I’ve never been to Chile.

I’ve never given a supply chain presentation in Spanish.

I’ll be doing both for the first time in a couple of weeks at Seminarium’s Logistics & Operations Conference 2017 (October 18th in Santiago, Chile). Here’s a short video I recorded in Spanish highlighting the topic of my presentation:

If you plan to be at the conference, I look forward to learning and networking with you. And if you’re interested in attending, it’s not too late to register — just click on the link above.

Moving on, here’s the supply chain and logistics news that caught my attention this week:

Earlier this week, I shared some brief thoughts on the future of delivery. Well, here’s the current reality of delivery: it’s a growing competitive weapon and there’s an arms race going on.

Just look at the news this week from Amazon, Walmart, and Target. Beginning with Amazon, the company is “experimenting with a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses,” as reported by Bloomberg Technology. Here are more details from the article:

Amazon is calling the project Seller Flex, one person [familiar with the plan] said. The service began on a trial basis this year in West Coast states with a broader rollout planned in 2018, the people said. Amazon declined to comment.

Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers’ homes, the people said — work that is now often handled by UPS and FedEx. Amazon could still use these couriers for delivery, but the company will decide how a package is sent instead of leaving it up to the seller.

Much of the commentary is focused on how Amazon appears to be taking on FedEx and UPS, but I don’t see it that way. I don’t believe Amazon wants to be a parcel delivery company; it wants to be, to use Jeff Bezos’ words, an “obsessively customer focused” company, and since delivery is so critical to providing a delightful customer experience, Amazon wants to have as much direct control of the delivery process as possible. (For related commentary, see Keeping Control: What 3PLs Must Convince Their Customers.)

I also believe that Amazon is making a network design calculation here: leveraging the warehouses of sellers and taking control of transportation is probably a less expensive and faster approach to keeping up with the rapid growth of e-commerce than building, outfitting, and staffing additional distribution and fulfillment centers of its own. The company will continue to do the latter, but this new Seller Flex program might allow it to slow down its capital investment pace.

That’s my take. What do you think?

Moving on to Walmart, the company announced that it has acquired Parcel, “a technology-based, same-day and last-mile delivery company based in New York.” Here are some details from the press release:

As a 24/7 operation that delivers packages the same-day, overnight and in scheduled two-hour windows, Parcel uses routing algorithms, a fleet of leased vehicles, and a professional, employee-based workforce, to quickly sort, load and deliver packages to customers.

We plan to leverage Parcel for last mile delivery to customers in New York City – including same-day delivery – for both general merchandise as well as fresh and frozen groceries from Walmart and Jet.

Also, Parcel will continue servicing its current clients and adding others, operating from its New York City headquarters where it can accelerate and scale over time.

Walmart has done pilots tests in the past with Uber, Lyft, and Deliv for grocery delivery. This acquisition is perhaps a signal that Walmart also wants to take more direct control and ownership of last-mile delivery. At a minimum, the company is spreading its bets across the table.

Move over driverless trucks, make way for flying taxis and autonomous ships and trains. Check out the links above for more details. Who said transportation and logistics is a dull industry?!

Shifting gears to technology news, MercuryGate announced at its annual user conference this week the launch of MercuryMaestro, “an innovative, advanced business intelligence (BI) platform designed specifically to enhance the value and visual presentation of data captured within MercuryGate’s TMS solutions.” Here’s more from the press release:

The new BI solution will enable logistics professionals to perform advanced analytics of their transportation business and get answers to the most complex of questions in a single easy-to-use platform. The new platform also makes it easy to identify data relationships, trends, and search out exceptions allowing the ability to easily perform functions that previously required extensive data extractions and time-consuming spreadsheets.

MecuryGate provided an extensive demo of the solution at its user conference, so I was able to see it firsthand. I’ll share my takeaways in a future post, but in short, MercuryMaestro is like a “Tableau for TMS” solution, providing users with an easy to use, very graphical, and dashboard-driven approach to analyzing transportation data.

Also this week, Elemica announced that it has partnered with DHL Resilience360, a leading cloud-based supply chain risk management platform, “to build a new solution providing unprecedented insight into risk events and their impact on increasingly complex supply chains.” Here are some excerpts from the press release:

Early notice of disruptive events saves days of assessment in implementing mitigation strategies, providing customers a substantial competitive advantage in the speed and cost required to tactically address these incidents. Elemica’s Risk Solution will apply DHL Resilience360’s comprehensive Risk Management capability, correlating incidents with the customer’s network assets, orders and shipments to detect and understand the impact of disruptive events.

DHL Resilience360 tracks multiple categories of risk events across the globe. The addition of DHL Resillience360 partnership with Elemica provides new layers of insight for Elemica customers, allowing them to discern which orders and products are impacted by location, what alternative shipping methods exist and the economic impact if orders are delayed.

The integration of supply chain visibility solutions with real-time risk event data is a growing trend in the industry. The value proposition is clear: supply chain disruptions are costly, so if you’re able to detect a potential disruption ahead of time (due to weather, labor strike, supplier bankruptcy, and many other factors), then you’re better able to take proactive action to either prevent a disruption or minimize its impact and duration. We’re not there yet, but the ultimate goal is to leverage machine learning and artificial intelligence to predict disruptions and prescribe (and even automate) corrective actions. A prerequisite, however, is that you’ve taken the time and effort to map your supply chain.

And with that, have a happy weekend!

Song of the Week: “Up All Night” by Beck