This Week in Logistics News (February 12-16, 2018)

It’s one of those Friday mornings: lots to do, not enough time.

So, without delay, here’s the supply chain and logistics news that caught my attention this week:

E2open Proposes to Amber Road: Two Takeaways

Will you marry me? Sometimes, especially in the business world, the answer is no.

That was the case this week when E2open offered to acquire all outstanding shares of Amber Road that it did not already own for $10.50 per share in cash (a transaction valued at over $300 million).

“This transaction combines Amber Road’s Global Trade Management capabilities with E2open’s end-to-end Supply Chain Operating Platform,” said Michael Farlekas, President and Chief Executive Officer of E2open in the press release. “The joining of E2open’s manufacturing and distribution network with Amber Road’s global trade network creates a unique and unparalleled offering in the market allowing customers to operate their end-to-end supply chain from one place in the cloud. E2open and Amber Road both serve Fortune 100 clients, whose complex, global supply chains will benefit from this combination.”

Amber Road, however, felt differently about the proposed marriage. “Consistent with our fiduciary duty, we routinely evaluate strategic options to maximize value for our stockholders, and we remain committed to considering any credible strategic alternative that would help achieve this objective,” said Barry Williams, Chairman of the Board in a press release. “While we welcome constructive input from all parties that share this goal, the unsolicited offer advanced by E2open is not in the best interests of the Company and its stockholders. We continue to firmly believe that executing our existing strategic plan is the best means of maximizing value for our stockholders and satisfaction for our customers over the long term.”

Whether this marriage happens or not, the news underscores two important points for me.

First, as I wrote a couple of years ago, investments in Supply Chain Operating Networks continue to rise. Why? Because, among other things, many in the market recognize that for business processes involving many external trading partners, network-based solutions are the best platform.

(For related news, see Elemica’s press release this week announcing “significant network expansion in 2017, both in network traffic and participants from the chemical industry sector, [including] an additional two million network transactions, close to 10,000 supply chain trading partners, and more than a million network transactions daily.”)

Second, global trade management — including trade compliance — is becoming an essential part of a Supply Chain Operating Network. Descartes Systems Group, for example, acquired Customs Info in June 2014 and Global Trade Content is one of the company’s fastest growing segments. And just last week Infor announced a partnership with Integration Point to “create a comprehensive, network-based Global Trade Management solution.”

Reverse Logistics: Dealing with $90 Billion in Holiday Returns

“Retailers still celebrating their strongest holiday sales in years now face the less-pleasant task of disposing of billions of dollars in returned merchandise,” writes Erica E. Phillips in today’s Wall Street Journal.  According to the article:

The National Retail Federation said holiday sales reached nearly $692 billion in November and December. About 13%, or $90 billion, is expected to be returned through the end of February, according to a forecast by Optoro Inc., a logistics provider that helps companies like Target Corp., Staples Inc. and BJ’s Wholesale Club Inc. take back and resell returned merchandise.

Roughly half of holiday-season returns go back on the shelf, much of it to be sold again at a discount, said Tony Sciarrotta, executive director of the Reverse Logistics Association and the former head of returns management for electronics company Philips. The other half winds its way through various secondary channels over the next several months, depending on the goods’ resale value and seasonality, he said.

One of my supply chain and logistics predictions for 2018 is that Companies Will Get Smarter About The Other Big E-Commerce Story: Product Returns and Liquidation. As I wrote in December, most retailers lack the systems, processes, and expertise to manage returned goods in an intelligent and efficient manner. What separates the leaders from the laggards is their use of online auction marketplaces, business intelligence and analytics, and lotting strategy to improve their liquidation process and effectiveness.

For more insights and advice on this topic, watch our Talking Logistics episode, Dealing with Holiday Returns: The Case for Technology-Based Liquidation.

Real-Time Temperature Tracking in TMS

Finally, in transportation management systems (TMS) news, UltraShipTMS (a Talking Logistics sponsor) announced a partnership with FourKites enabling “real-time tracking of temperature levels for reefer/freezer trailers.” Here are some details from the press release:

Temperature readings can be transmitted via UltraShip’s web portals, the UltraShipTMS Carrier Mobile App and also via integration with FourKites.

A six billion dollar US protein producer/processor was an early adopter of the temperature tracking service integrated with their implementation of UltraShipTMS. The company ships thousands of temperature controlled loads around the country every month and are now able to more easily comply with FSMA regulations and reduce transportation costs.

Real-time temperature tracking has become especially important for food companies since enactment of the Food Safety Modernization Act (see Impact of Food Safety Modernization Act on Transportation). For TMS solution providers with clients in the food industry, which is the case for UltraShipTMS, this is becoming a must-have capability — and FourKites, which first announced this capability in June 2017, is looking to become the preferred partner for TMS providers (see its partnership with 3Gtms, also announced this week.)

And with that, have a happy weekend!

Song of the Week: “Pleasure, Little Treasure” by Depeche Mode