Above the Fold: Supply Chain Logistics News (May 21, 2021)

We mark the seasons differently in our family.

Yes, there is Spring, Summer, Fall, and Winter, but we’ve bundled those into two seasons: Air Conditioning On and Heat On.

Air Conditioning On began this past Wednesday at 10:18 pm, the way it usually does: right before getting into bed, my wife says, “It feels a bit hot in here, doesn’t it?” It’s kind of like our own Groundhog Day, and when I hear those words, I head downstairs to the thermostat and turn the AC on.

This season will last until about late October, when I put on my ski coat and hat to eat breakfast in the kitchen. “It feels a bit cold in here, doesn’t it?” I’ll casually ask my wife. It may take a day or two, but eventually she realizes that another season has passed and Heat On officially begins. 

Our family. We mark the seasons. Differently. 

In this week’s supply chain and logistics news…

In-Sourcing Package Delivery

When Parcel Demand Exceeds Capacity: What Should Shippers Do?

That was the title of a Talking Logistics episode we recorded earlier this year with JP Wiggins from 3Gtms (a Talking Logistics sponsor). Adding more local and regional carriers was one option we discussed. Another option, mainly for those who have the scale and means, is to in-source package delivery– i.e., make the deliveries yourself.

Of course, Amazon has been doing this for some time. But as Lisa Baertlein reports in Reuters this week, “Walmart and Target are testing their own home package delivery services in the United States — stealing a page from Amazon’s play book — as e-commerce demand strains traditional carriers like United Parcel Service, FedEx and the U.S. Postal Service.” Here’s more from the article:

Walmart — a key FedEx delivery customer — has been trialing its first company-branded “last-mile” delivery vans, John Furner, Walmart’s U.S. chief executive, said on the company’s earnings call on Tuesday. Since January, a small, electric van fleet has made package deliveries in the Bentonville and Rogers areas near Walmart’s Arkansas headquarters, company spokeswoman Camille Dunn said. The drivers work for Walmart, which also employs its semi-truck drivers.

[Target] earlier this year began testing home package delivery from a new sorting center in its hometown of Minneapolis. Workers in that center group packages by zone and hand some over to drivers for Shipt, who use their own cars for deliveries. The effort, which is fortified by acquired technology from transport management provider Grand Junction and delivery firm Deliv, aims to “add capacity, reduce costs and enable more flexibility,” Target Chief Operating Officer John Mulligan said on a conference call on Wednesday.

As I wrote in “Domino’s Pizza And Panera: Keeping Control Of Delivery” in September 2019:

The reason Domino’s Pizza, Panera, and others are keeping delivery in-house — and why Amazon continues to invest in its own delivery capabilities [and why Walmart and Target are doing so now] — is that delivery is tightly linked to customer experience and brand reputation. And those two things are becoming greater competitive differentiators across all industries today.”

Sometimes, you just have to take more direct control of your destiny.

(For related commentary, see Keeping Control: What 3PLs Must Convince Their Customers)

And with that, have a happy weekend!

Song of the Week: “Seasons” by Future Islands