Above the Fold: Supply Chain Logistics News (October 28, 2022)

I’m finally home.

I’ve been on the road for several weeks, attending and speaking at various events — including Transporeon’s Summit 2022, Uber Freight’s Deliver 2022, SAP’s Logistics Info Days, and e2open’s Leaders Forum — and a pitstop in Death Valley to cycle in the desert.

Now that I’m back at home, I’ll share my takeaways from these events in upcoming posts, including my thoughts on two themes that were a common thread across all these conferences: the rise and importance of network-based platforms and sustainability.

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

Free Shipping Gets More Expensive

How can free get more expensive? It’s a nonsensical phrase, but only if you believe that shipping was ever truly free.

“Rising shipping costs are primed to squeeze profits for businesses of all sizes this holiday season,” reports Esther Fung in the Wall Street Journal. “Entrepreneurs and executives say that to cope they are buying their own delivery vehicles, pleading with customers for patience and changing the products they sell. The moves, they say, are in response to carriers such as FedEx Corp. and United Parcel Service continuing to pass along price increases for service.”

Speaking of UPS, the carrier is following FedEx’s lead in raising rates. Starting December 27th, rates for UPS Ground, UPS Air and International services will increase an average net 6.9%.

Earlier this week, I ordered our Logistics Leaders for T1D Cure team shirts. The shipping cost via FedEx: $82.50.

Yeah, nothing free about it.

Apple Planting Windmills and Solar Panels

Planting trees for the benefit of the environment is so yesterday. The focus today is on planting windmills and solar panels — that is, accelerating the transition to renewable energy.

As I mentioned above, sustainability is becoming a core supply chain objective, especially for large, global companies. This week, for example, Apple announced that it is “accelerating work with suppliers to decarbonize Apple-related production, and expanding investments in clean energy and climate solutions around the world.” Here are some excerpts from the press release:

As part of Apple’s supplier engagement, the company is partnering with its worldwide supply chain to urge accelerated action to achieve carbon neutrality for their Apple-related corporate operations. The company requires reporting on progress toward these goals — specifically Scope 1 and Scope 2 emissions reductions related to Apple production — and will track and audit annual progress. Apple will partner with suppliers that are working with urgency and making measurable progress toward decarbonization.

Additionally, Apple is encouraging suppliers to address the greenhouse gas emissions beyond their Apple production, prioritizing clean energy…More than 200 suppliers representing more than 70 percent of Apple’s direct manufacturing spend have already committed to using clean power like wind or solar for all Apple production. Major manufacturing partners — including Corning Incorporated, Nitto Denko Corporation, SK hynix, STMicroelectronics, TSMC, and Yuto — have committed to power all Apple production with 100 percent renewable energy.

This trend underscores a point I’ve made in previous posts: That end-to-end supply chain visibility goes well beyond tracking shipments, orders, inventory, and assets in motion. It also involves (among other things) knowing the greenhouse gas emissions across your supply chain, including Scope 3 emissions.

Whether it’s driven by regulations (see SEC), trading partners like Apple, shareholders (see Costco), employees, or consumers, the fact remains: sustainability is becoming a factor in supply chain decisions along with cost, service, risk, and resilience. 

When it comes to supply chain sustainability, there’s a lot more work to be done, including on the data collection and standards front. But if you have been on the sidelines until now, it’s time to get started.

In the meantime, I hope we don’t stop planting trees. They’re much prettier to look at than fields covered with windmills and solar panels.

And with that, have a happy weekend!

Song of the Week: “Home” by Depeche Mode