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This Week in Logistics News (August 20 – 26)

By August 26, 2022Uncategorized

It seems to me that we are losing daylight at a rapid pace in these days of mid and late August. I understand the concepts of the shortest day of the year (winter solstice), longest day of the year (summer solstice) and the two equinox (equinoxes?), but was unsure of how consistently the change occurred over the year. I decided to google the daylight change according to the time of year and came across this article from Scientific American. It is brief, informative, and includes some great visual depictions. I suggest you check it out. For me at the 45-degree latitude, August 22 through October 22 is going to be the express train to early sunset. But this is nothing compared to the shift for those of you up at the 60th parallel. And now on to this week’s logistics news:

Retailers Scrambling to Stow Inventories Are Turning to Transport Equipment
Hot warehouse demand drove jump in “megawarehouses” in first half of 2022
Canceled sailings, stuck vessels, warehouse prices show U.S. ports are still struggling
Amazon halts Just Walk Out tech powered checkout-free stores push
French supermarkets and gas stations are capping prices
Honda considering risk-hedging supply chain from China
ATA Truck Tonnage Index Decreased 1.1% in July | American Trucking Associations

RETAILERS are reportedly now turning to excess trailer capacity to store inventories. The goal is to keep supply chains nimble with the ability to move storage capacity to various trailer yards. This is in comparison to committing to additional warehouse storage capacity in a tight and highly volatile market. Additionally, the trailer load of inventory can be relocated to different facilities without unloading and reloading. It sounds sensible enough to me, but I am unsure of how well these organizations manage the trailer locations and contents of those trailers within the networks. If they have the trailer and yard capacity and the ability to manage inventory properly, it sounds like a reasonable tactic.

WAREHOUSE users signed leases for 37 facilities of 1 million square feet or larger in the U.S. in the first half of this year, up from 24 in the first half of 2021, according to DC Velocity‘s write-up on a report from Dallas-based CBRE. The average warehouse size in the 100 largest leases also rose, increasing to 931,860 square feet from 800,149 a year ago. “We have seen a falloff in leasing by smaller users – those in 25,000 sq. ft. of less – likely due to the economic environment. But the largest users are forging ahead, picking up most of the slack,” John Morris, CBRE’s President of Industrial & Logistics in the Americas, said in a release. I see this as another sign of inventory management and planning in a time of heightened supply chain uncertainty. Larger companies can invest for growth while absorbing the risk of a downturn. Smaller companies have less latitude.

VESSEL number increases anchored off of Savannah and Houston is one sign of a global shipping industry that has moved more cargo away from the U.S. West Coast. MarineTraffic has tracked an increase in the number of vessels anchored off the East Coast and Gulf ports. Port of Savannah has 39 vessels at anchor. In the Gulf, at the Port of Houston, there are 22 cargo ships at anchor. A lot of this was the result of moving freight away from USWC arrivals due to labor disruption risk. Ocean carriers are canceling sailings as result of U.S. port congestion, and even as container volume from China is way down, U.S. ports continue to have productivity issues.

AMAZON has put the brakes on the expansion of its UK checkout-free convenience stores, due to sales falling short of expectations and fit out costs being multiple times higher than with a standard location. There will still be a handful of openings this year at sites where Amazon had already committed to a lease. Amazon’s first checkout-free store in the UK opened in March last year, in Ealing, west London. Since then, it has opened another 18 stores, predominantly in the capital.

FRENCH supermarkets and gas stations have an answer to soaring inflation — freezing some prices for the next few months.  On Monday, French retail giant Carrefour announced that it would keep prices for more than 100 essential products unchanged for the next 100 days. The list of items includes breakfast cereal, coffee, tinned vegetables, detergent and diapers. This is an interesting social and business approach. In my opinion, it is likely that these retailers will obtain higher volume sales of these goods, reduced margin per unit than they would have achieved otherwise, and potentially higher total sales (for goods with price elastic demand). The input price changes over this time period will determine the economics effects after the moratorium on price increases (higher price increase with return to normal margins, lower price increase with cost absorbed by retailer, etc.) and the subsequent demand changes to substitutes.

HONDA is reportedly considering risk-hedging its supply chain from China. Honda would continue to keep its supply chain in China for the domestic market in the world’s second-largest economy, while building a separate one for markets outside of China, the Sankei said. It did not say where it got the information.  A Honda spokesperson said the Sankei report is not something announced by the company, adding it has been working on reviewing and risk-hedging its supply chain in general.

ATA TRUCK TONNAGE Index decreased 1.1 percent in July. “Tonnage declined sequentially in July for only the second time during the last twelve months. Despite the dip from June, tonnage remains at elevated levels and increased significantly from a year earlier,” said ATA Chief Economist Bob Costello. “While tonnage is much stronger than a year ago, the monthly gains have moderated as the year has gone on. The combination of softer consumption of goods, home construction falling and slower manufacturing activity are the main reasons.”

That’s all for this week. Have a great weekend. And enjoy this week’s video “Centerfield” by John Fogarty




The post This Week in Logistics News (August 20 – 26) appeared first on Logistics Viewpoints.

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