This Week in Logistics News (July 2-6, 2018)

It’s been a long hot week here in Boston, and even though we had the 4th of July holiday tucked in the middle, I still feel like I need another break. The forecast calls for thunderstorms this morning and afternoon, which should bring down the temperatures a bit — and hopefully raise my energy level and brighten my mood too.

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

The First Shot in U.S. – China Trade War

At 12:01 am this morning, the United States slapped tariffs on $34 billion worth of Chinese goods. Seconds later, China fired back with retaliatory tariffs on $34 billion worth of U.S. goods, including soybeans, pork, and electric vehicles.

The likelihood that this tit-for-tat trade war will escalate is high. As reported by CNBC:

President Donald Trump said Thursday that tariffs on $34 billion worth of Chinese goods will kick in at 12:01 a.m. EDT Friday [July 6]. Another $16 billion are expected to go into effect in two weeks, he said. He told reporters he would also consider imposing additional tariffs on $500 billion in Chinese goods, should Beijing retaliate against the already-scheduled actions.

In addition to the added costs, the tariffs are starting to cause delays at ports. “Some major Chinese ports delayed clearing goods from the United States on Friday,” reported Reuters. “The port of Shanghai had put on hold clearing some U.S. imports through customs…There did not appear to be any direct guidance to hold up cargoes, but some customs departments were waiting until they had received official instructions from the central government on whether to start collecting the hefty new import tariffs on hundreds of products, the sources said.”

This action has been in the making for months, so it shouldn’t come as a surprise to anybody. In fact, some companies have started to modify their supply chain networks and investment decisions in response (e.g., Harley-Davidson is moving some production of motorcycles for European customers out of the United States to avoid EU retaliatory tariffs).

What should supply chain executives do now? What they should have been doing all along: keep asking those “What if?” questions, keep modeling and simulating different scenarios, and keep developing response plans so that you can take action quickly and effectively to whatever happens in the months ahead.

Acquisitions Heat Up in Supply Chain Technology Space

Last week, Descartes acquired Velocity Mail, and the week before, WiseTech Global acquired Pierbridge. Two more acquisitions were announced this week. First, JDA Software is acquiring Blue Yonder, “a leading provider of artificial intelligence (AI) solutions in retail [that] has assembled one of the largest teams of PhDs/data scientists focused on supply chain and retail merchandising.” Here’s an excerpt from the press release:

Blue Yonder’s intelligent Demand Forecast & Replenishment and Price Optimization solutions will further complement and enhance JDA’s own retail planning solutions, which deliver integrated, customer-centric supply chain and merchandising processes. Blue Yonder’s [machine learning] capabilities will offer immediate opportunities for JDA’s retail customers to dynamically improve their pricing, promotions, markdowns and replenishment capabilities.

I haven’t been briefed by Blue Yonder, so I’m not very familiar with its solutions. However, this deal underscores the growing role and importance of AI and machine learning capabilities in supply chain management. While other technologies like blockchain are perhaps years away from having a broad impact, machine learning is much further along the maturity curve and already delivering value.

In the transportation realm, Logistyx Technologies acquired Transparix, a software-as-a-service transportation execution solution provider based in the Netherlands. Here are some details from the press release:

In business since 2001, Transparix has amassed an impressive roster of clients, including Bosch, Office Depot, Footlocker, ABB, XPO Logistics and many others. The acquisition expands Logistyx’s European footprint, with the Transparix team joining Logistyx and adding to an already talented tech development team.

“Multi-carrier transport management is at the heart of both Logistyx’s and Tranparix’s core competencies, yet the products and footprints of Transparix and Logistyx complement one another. Both companies provide a globally deployed solution combined with local support, which enables our customers to unlock immediate value within their transportation strategies,” said Richard Haeger, managing director of Transparix.

Parcel shipping, along with fleet management, was the ugly duckling of transportation management in the late 90s and 2000s, with most of the leading TMS vendors ignoring this mode. Fast forward to today, with the ongoing rapid growth of e-commerce, parcel shipping is suddenly beautiful, which is why TMS vendors have been adding it to their solution footprint, either via organic development or acquisition.

And with that, have a happy weekend!

Song of the Week: “Name For You” by The Shins