Above the Fold: Supply Chain Logistics News (September 8, 2023)

My kids did not inherit the Cuban gene for heat and humidity resistance. 

The calendar says it’s September, but it feels more like July outside. July in Florida, not in Boston. It’s been in the mid 90s this week, with humidity in the tropical zone. 

I didn’t grow up with air conditioning. As a kid, on hot and humid days in the Brooklyn jungle, I would take a cold shower, barely dry myself, and plop into bed face down beneath the ceiling fan. The evaporative cooling worked long enough for me to fall asleep. (Being completely exhausted from 12 hours of playing stick ball, stoop ball, wiffle ball, anything ball also helped).

I told this to my youngest son who just started his freshman year at the University of Maryland. He’s living in a dorm with no air conditioning, on the third floor, with one small window. The temperature inside his room is 98F. 

Considering the outrageous tuition we all pay, why don’t all dorms have air conditioning? I’m guessing all the football players are fine, but the rest of the students? Let them eat cake, er, take cold showers instead. The Wall Street Journal recently reported that “Colleges Spend Like There’s No Tomorrow. ‘These Places Are Just Devouring Money’” — except for equipping old dorms with air conditioning.

The good news is that the heat is forecasted to break next week, and before you know it, the leaves will turn into their fall colors, and the air will cool too, and those of us without the gene for resisting frigid temperatures will put on our wool sweaters and socks, climb into bed beneath heavy blankets, and fall asleep dreaming

of warmer days ahead. 

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

Things That Make You Go Hmmm…

When I saw Dave Clark’s post on X that he was resigning from Flexport, my first reaction was, Hmmm.

Within an hour, multiple publications pumped out articles about the news. It reminded me of when Brad Pitt and Angelina Jolie (aka Brangelina) called it quits, except the divorce here is between Dave Clark (who established his logistics fame at Amazon and joined Flexport with much fanfare less than a year ago) and Flexport founder Ryan Peterson (and the company’s board of directors).

As reported by Liz Young in the Wall Street Journal:

Clark, who oversaw the expansion of Amazon’s sprawling logistics network and was head of the e-commerce giant’s consumer business when he left the company last year, resigned from Flexport on Wednesday just a year after joining the company…Clark resigned from San Francisco-based Flexport after the board asked him to step down for how much he increased company spending without increasing revenue, according to a person familiar with the matter. 

Young also reported that Flexport “let go [on Thursday] at least six executives hired by Clark, including Teresa Carlson, who joined Flexport as president and chief commercial officer in January after previous senior executive roles at Microsoft and Amazon, according to a person familiar with the matter.”

I guess the only surprising thing about the news is that it seems like Clark was blindsided by the board, considering his tweet just the day before where he stated “All right entrepreneurs can’t wait to see you all in Seattle [next week]!  Going to be a fun night with cool tech and some cool surprises!  Come by and say hello, see you soon.”

Otherwise, if you’ve been paying attention, this has been a challenging year for many logistics service providers, especially those in the freight brokerage and freight forwarding business — not only for newer players like Flexport and Convoy (which is reportedly exploring strategic options, including selling itself) but established leaders like C.H. Robinson too.

Simply put, the market environment today (and into the foreseeable future) is a lot different than when Dave Clark was hired almost a year ago. He signed up for X, but X no longer makes sense in this economic environment (where profitability suddenly matters again), so it’s time for Plan B and he’s not the right person for it.

That’s it. Everything else is commentary.

Dave will be okay. I’m sure he has plenty of air conditioning.

Drones and Driverless Trucks

In November 2020, we asked members of our Indago supply chain research community, “Which of the following transportation modes in development do you believe will gain the most traction and deliver the most business benefits by 2030?”

Our members were almost evenly split, with 50% selecting “Driverless Trucks” and 45% selecting “Drones” (the remaining 5% selected “Delivery Robots”).

If we asked the question today, I suspect we would see similar results too.

On the drones front, the FAA announced this week that it authorized “two more companies to operate drones beyond visual line of sight (BVLOS). UPS Flight Forward with its Matternet M2 can conduct small package delivery and uAvionix with its Rapace can use the Vantis Network to test its detect and avoid technology.” The press release adds:

The FAA is focused on developing standard rules to make BVLOS operations routine, scalable and economically viable…The FAA’s long-term goal is to safely integrate drones into the National Airspace System rather than set aside separate airspace exclusively for drones.

And on the driverless truck front, Tyson Foods and Gatik AI announced “a multi-year collaboration to deploy autonomous refrigerated box trucks to bolster Tyson routes in Northwest Arkansas.” Here are some more details from the press release:

Operating 18 hours a day, trucks will deliver Tyson®, Jimmy Dean® and BallPark® products, among others, to the company’s distribution and storage facilities in the Rogers and Springdale, Arkansas areas.

The deployment will introduce Gatik trucks equipped with commercial-grade autonomous technology to the Tyson supply chain, operating on predetermined short-haul, repeated routes to support fast and efficient product flow from plant to storage facilities. In a nationwide truck driver shortage, these autonomous trucks are an innovative and safe way to add resources that will allow the company to elevate drivers to other transportation positions in the Tyson business, while ensuring continuous supply chain reliability.  

The collaboration, which begins this week, will include multiple trucks with the potential for future expansion at other Tyson locations…A safety driver will initially be present in the cab to monitor the autonomous system and take command of operating the truck if required.

2030 is still more than six years away, but drones and driverless tricks are clearly still in the race, which is more like an ultra-marathon than a sprint.

For more on this topic, see “Drones Or Driverless Trucks: Which Will Deliver Most Business Benefits First?

And with that, have a happy weekend!

Song of the Week: “Things That Make You Go Hmmmm….” by C+C Music Factory