Above the Fold: Supply Chain Logistics News (June 28, 2019)

Earlier this week, as we drove our daughter to camp, we were rear ended by a car. We were in stop-and-go traffic on the freeway. We stopped, the car behind us didn’t, bang!

Luckily, nobody was hurt and the damage was relatively minor.

The driver of the car claimed his car skidded in the rain. Or maybe he was distracted by his phone. I have no way of knowing.

What I do know is that way too many drivers are looking at their smartphones instead of the road ahead. I see it when I’m out riding my bike. I look at the cars around me and at least a third of the drivers are texting or engaging with their phones.

The light turns green and they don’t move because they’re looking down at their phones. Only when the cars behind them start beeping do they look up and start moving.

Is that you? 

Please stop before you kill yourself or others. 

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

Amazon Counter: Leveraging Brick-and-Mortar Stores for Delivery

Delivering multiple packages to one location is less expensive than delivering them to multiple locations. This basic truth in transportation is the main driving force behind Amazon’s new service offering called Counter, “a new network of staffed pickup points that gives customers the option to pick up their Amazon packages in-store at a partner location.” 

Here are some details from the press release:

Amazon designed and built the technology for Counter from the ground up, resulting in a quick and simple package pickup experience for customers. For store partners, Counter’s straightforward pickup flow and user-friendly technology helps ensure store associates can serve customers without disrupting their daily activities. 

Counter goes live today in more than a hundred Rite Aid stores across the U.S. By the end of the year, the service will roll out across 1,500 Rite Aid locations…Amazon is actively looking to bring additional partners onboard, including small to midsize businesses and other large chains.

Shipping to a Counter pickup point is easy and secure. After shopping on Amazon.com, customers proceed to checkout and select one of the Counter pickup points available in their zip code as their delivery location. As soon as their package arrives at the store, customers receive an e-mail notification with a unique barcode as well as a reminder of the address and the business hours of their selected store. At the store, customers provide the barcode to store staff, who will scan it, retrieve the package, and hand it to the customer. Customers have 14 days to collect their package.

For Rite Aid and other prospective business partners, this offering brings people into their stores, which creates buying opportunities. According to the press release, “Counter originally launched in the UK with NEXT and in Italy with Giunti Al Punto Librerie, Fermopoint and SisalPay stores. The service has been positively received, driving strong customer engagement and additional foot traffic for partners.”

How much space will retail stores allocate to support Counter? How much time will store associates spend retrieving and checking out packages for customers? When you take these factors into consideration and subtract the sales lift from new customer traffic, is it a profitable service for retailers?

In Kohl’s case, which has a partnership with Amazon to accept returns, the partnership is paying off. In April 2019, Kohl’s announced that it is rolling out the returns service to all of its stores starting in July (it’s currently only available in 100 stores in the Los Angeles, Chicago and Milwaukee markets). Also, according to data from Earnest Research, “[Kohl’s] Chicago region sales for growth tracks very closely to the rest of the U.S. until the first quarter of 2018, where revenue growth tops more than 10%, versus 5% for the rest of the U.S. Additionally, Earnest data shows that Chicago sales, transactions, and customer growth all outpace the same metrics nationwide for 2018.” 

Stores are not just stores any more. They are now fulfillment centers and mail rooms where you can pick up your packages.

Descartes Acquires STEPcom

Descartes Systems Group acquired STEPcom, “a leading Business-to-Business (“B2B”) supply chain integration network based in Switzerland” for approximately $19.6 million in cash. Here are some details from the press release:

STEPcom has connected trading partners to its B2B network for more than 15 years, helping supply chain participants connect, collaborate and seamlessly exchange electronic data. A community of more than 600 customers leverage the STEPcom suite of solutions to automate supply chain processes and streamline a wide array of complex, mission-critical documents found in typical procure-to-pay and order-to-cash processes. STEPcom also operates a GS1-certified, industry-independent data content pool where suppliers can share product master data with customers all around the world.

As I’ve said many times before, when it comes to enabling supply chain innovation, software is not enough. You also need B2B connectivity — the ability to exchange (timely, accurate, and complete) data, documents, and other information with external business partners. And do so in a scalable, flexible, and cost-effective way. This is the foundation to enabling supply chain visibility and control. The best path forward, however, is not to build your own connectivity network, but to join existing communities of trading partners that are already connected to third-party B2B networks, which I call Supply Chain Operating Networks.

As I highlighted earlier this year in my takeaways from the Descartes Evolution 2019 conference, Descartes has 20,000+ customers on its Global Logistics Network (GLN), which experienced 21% growth and processed 18.6+ billion transactions last year. This acquisition adds to the scope and capabilities of the GLN, which is a key differentiator for Descartes.

BluJay Solutions Receives ATLAS 8.9 Certification in Germany

Despite all of the tariffs and trade disputes going on today, the wheels of global trade continue to turn. And customs agencies around the world continue to modernize their systems to help expedite the movement of goods across borders. Every time a customs agency upgrades their systems, providers of global trade management (GTM) software need to upgrade their solutions too and get certified. This week, for example, BluJay Solutions announced that the company’s customs management software in Germany, Zabis 9.2, is officially certified on ATLAS 8.9, the software used by the German Federal Customs Administration. 

Here are some details from the press release:

ATLAS (Automatisiertes Tarif- und lokales Zoll-Abwicklungssystem) is Germany’s main electronic customs system used to organize customs declarations processing including NCTS, import, NEE (subsequent recovery, reimbursement or remission for import), temporary storage, bonded warehouse, and inward processing, declarations and import levy notifications. ATLAS 8.9 is the major upgrade of the German customs system, designed to handle major compliance changes from the German Federal Customs Administration, covering XML communication with Customs, new messages, continuous support of the new format of authorizations opened in May 2019, updates of printouts, and some EU harmonization and modernization of messages with regard to format, content, and compliance validations.

When it comes to global trade, change (and keeping up with it) is the only constant.

And with that, have a happy weekend!

Song of the Week: “The Way I Feel” by Keane