Above the Fold: Supply Chain Logistics News (August 21, 2020)

By Adrian Gonzalez

Imagine hell during a heat wave, then add 35-50 mph crosswinds.

That is how I described the conditions in Death Valley, CA the first time I cycled 102 miles there in 2016 (see Logistics Leaders for T1D Cure Team page from that year for more details and photos).

I cycled in Death Valley again last year. The conditions weren’t as hellish as the first time, but it was hot and challenging nonetheless.

This week, the temperature reached 130F in Death Valley — the highest temperature ever reliably recorded on Earth.

I will not be cycling in Death Valley this year.

But I would, even in that heat, if it brought us closer to a cure for type 1 diabetes for my daughter and everyone else who lives with this challenging disease.

I’ll be on my bike when you read this, going for a 35-mile training ride before lunch. Although the JDRF Rides have been re-imagined as virtual challenges this year due to COVID-19, my wife and I still plan to ride 100 miles one day next month (and our LL4T1DCure team members are doing their own challenges too). The pandemic has cancelled many things, but not our commitment to doing whatever we can to help find a cure.

Thank you to our Century Team Sponsors, BluJay Solutions and Descartes, for your support. If you enjoy and get value from our content, please consider making a tax-deductible donation in support of our team and JDRF. Any amount is greatly appreciated.

Thank you for your time and consideration.

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

COVID-19 Pandemic Accelerates E-Commerce Growth

The COVID-19 pandemic has not only been a great disruptor; it’s been a great accelerator too. This is particularly evident in the growth of e-commerce. “U.S. e-commerce sales are forecast to grow 18% to $709.8 billion this year, according to a June report from market research firm eMarketer,” reports the Wall Street Journal. “E-commerce is expected to represent 14.5% of total retail sales this year—a record, according to the firm. This week, retailers including Walmart Inc., Target Corp. and Lowes Cos. reported surging e-commerce sales for their most recent quarters.”

In the case of Home Depot, “online sales doubled in the quarter ended Aug. 2, representing more than 14% of the approximately $38.1 billion of net sales,” up from 9% of net sales in the same period last year, according to the article.

Walmart’s e-commerce business “nearly doubled, with revenue jumping 97% from a year ago, boosted by people ordering groceries online to pick up in store parking lots.”

Meanwhile, Target reported the strongest quarterly sales growth in its history, with e-commerce sales increasing 197% in the quarter compared to the same period last year.

Amazon also reported record revenue and profit in Q2 2020. Its online grocery sales “tripled year-over-year in the second quarter and it increased grocery delivery capacity by more than 160%.”

Yes, the pandemic has put its foot on the e-commerce gas pedal, accelerating the growth of grocery delivery, buy online pick up in store (BOPIS), and ship from store.

At the same time, as Jennifer Smith reports in the Wall Street Journal, the “U.S. Postal Service package-delivery delays are causing headaches for e-commerce sellers and prompting digital marketplace eBay Inc. to look for alternatives as heavy online demand taxes domestic parcel networks.”

And as I wrote earlier this week in Free Delivery Gets More Expensive, USPS, UPS, and FedEx are all implementing additional fees to ship parcels. Here’s an excerpt from FedEx’s announcement this week:

As the impact of COVID-19 continues to generate a surge in residential deliveries, we are entering this holiday peak season with extremely high demand for capacity and are experiencing increased operating costs across our network. We anticipate residential volume to continue to surge into the new year.
To continue providing our customers with the best possible service during this challenging time, we are implementing several surcharges and fees [including $2 for its SmartPost service and as much as $5 a package for its premium Express service].

To quote the great Bob Dylan:

Come gather ’round, people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
And you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’

And with that, have a happy weekend!

Song of the Week: “The Times They Are A-Changin’” by Bob Dylan