Fall is here, hear the yell, back to school, ring the bell. These are the opening lines from one of my favorite songs, especially this time of year. And while it is not officially fall yet, summer vacation is over, and my kids are back to school and starting fall sports. That means a quiet house during the week and weekends spent on the athletic fields. It is definitely a bittersweet time of year. But it fills me with excitement to watch them learn and grow, make new friends, improve in their sports of choice, and enjoy the beauty of fall in New England. And what a glorious season it is. And now on to this week’s logistics news:
Amazon in the news:
Driving training programs overwhelmed by interest
Instacart acquires Rosie
U.S. to expand monkeypox vaccine, drug distribution
Desktop Metal to unveil 3D-printed sheet metal technology for cars, planes
Ocean shipping rates have plunged 60% this year
West Coast port congestion leads to new ideas in cross-country rail shipping
In a move to reduce the size of its sprawling delivery operation amid slowing sales growth, Amazon has abandoned dozens of existing and planned facilities around the US. Earlier this week, the company warned officials in Maryland that it plans to close two delivery stations next month in Hanover and Essex, near Baltimore, that employ more than 300 people. The moves are a striking contrast with previous years, when the world’s largest e-commerce company typically entered the fall rushing to open new facilities and hire thousands of workers to prepare for the holiday shopping season. MWPVL International Inc., which tracks Amazon’s real-estate footprint, estimates the company has either shuttered or killed plans to open 42 facilities totaling almost 25 million square feet of usable space. The company has delayed opening an additional 21 locations, totaling nearly 28 million square feet, and canceled a handful of European projects, mostly in Spain.
A string of recent fires at Amazon fulfillment centers and other facilities forced the e-commerce giant to temporarily shut down rooftop solar panels that were blamed for the costly blazes. Amazon experienced “critical fire or arc flash events” at six sites in North America with solar installations, representing about 12.7 percent of all applicable facilities. The company touted itself as the “world’s largest corporate purchaser of renewable energy” in last year’s sustainability report that laid out its goal to reach net-zero carbon emissions by 2040. According to an Amazon spokesperson, “out of an abundance of caution, following a small number of isolated incidents with onsite solar systems owned and operated by third parties, Amazon proactively powered off our onsite solar installations in North America, and took immediate steps to re-inspect each installation by a leading solar technical expert firm.” Amazon said that its solar installations will come back online after inspections are completed.
There is good news and bad news for the trucking industry. The good news is that there is more interest from people in joining the industry. The bad news is that truck driver training programs are in need of more resources and instructors to handle an influx of people interested in joining the industry. Pay raises have certainly driven increased interest, but for those people interested in becoming drivers, getting a foot in the door is harder than ever. Many smaller carriers that do not have training programs still require at least a year of experience. And now, training programs are booking out months in advance, making it more difficult for drivers to get the training they need to join the workforce. This puts pressure to find a carrier that has a training program. I guess in the end, this is a good problem to have for an industry in need of an influx of talent.
In yet another acquisition move leading up to its much-anticipated initial public offering, Instacart has acquired e-commerce platform service Rosie, geared towards local and independent retailers and wholesalers. Launched in 2013 and named after the robot housekeeper on “The Jetsons”, online grocery app Rosie allows customers to shop online from their favorite local stores for same-day delivery or in-store pickup. In addition to e-commerce, Rosie provides retailers with delivery opportunities, omnichannel marketing and deep data services. Instacart says the new technology will give more retailers access to tools and technologies that can lead to business growth. Through this acquisition, Rosie customers will also have the opportunity to utilize Instacart’s in-store offerings like Foodstorm’s order management system and Caper’s smart cart and checkout technology, the Instacart shopper network to help support new picking and fulfillment options, Carrot Ads and loyalty programs. Moving forward, Rosie employees will lead Instacart’s business strategy and technology development for local independent grocers.
The U.S. Department of Health and Human Services (HHS) on Tuesday said it will significantly expand the number of distribution locations for monkeypox vaccines and treatments through a new $20 million contract with AmerisourceBergen Corp. Under the new contract, HHS said it will be able to make up to 2,500 shipments per week of frozen doses of Bavarian Nordic’s Jynneos vaccine from the Strategic National Stockpile (SNS), as well as shipments of SIGA Technologies’ drug TPOXX to up to 2,500 locations. The national stockpile had been shipping to only about 5 locations per state and other jurisdictions. The vaccine and TPOXX doses – as well as the distribution – are being provided to states and other jurisdictions for free. As of Sept. 2, the SNS has shipped more than 800,000 vials of Jynneos and more than 37,000 courses of TPOXX nationwide. By the end of August, more than 350,000 doses of Jynneos had been administered in 30 jurisdictions that are reporting data on the shots to the U.S. Centers for Disease Control and Prevention (CDC).
U.S.-based 3D printer maker Desktop Metal Inc. plans to unveil a new technology that will dramatically simplify the industrial sheet metal production process. The technology Figur G15 is capable of shaping standard sheet metal on demand directly from a digital design file, eliminating the need of stamping tools, molds, dies, or presses and thus reducing costs and production lead time. The company expects first-generation of the new technology to handle volume production of sheet metal parts for aircraft, agriculture and heavy-duty equipment. In automotive assembly, however, the technology will be able to handle sheet metal shaping and stamping in low- to mid-volume. According to Chief Executive Officer Ric Fulop, “it could support production of sub-10,000 vehicles a year initially. I am confident we will dramatically reduce the need for stamping over the next two decades.”
Freight rates on the main ocean trade routes are sinking during what is typically the industry’s peak season after cargo owners shipped holiday goods early and inflation dented consumer demand. The cost to ship a 40-foot container from China to the U.S. West Coast now stands around $5,400 a box, down 60% from January, according to the Freightos Baltic Index. A container shipped from Asia to Europe costs $9,000, 42% less than at the start of the year. The rate for both routes, while still above pre-pandemic levels, peaked at more than $20,000 last September. Shipping rates are set to further ease for the remainder of the year and in 2023, according to shipowners and analysts. A series of new ships will hit the water over the next two years with net fleet growth expected to exceed 9 percent next year and in 2024. By comparison, container volume growth will be marginally negative next year and rise around 2 percent in 2024.
Ongoing rail congestion at West Coast ports has created an opportunity for East Coast ports, container shipping companies and rail operators to enter into new trade relationships. In January, ocean carrier Hapag Lloyd, Norfolk Southern, the Port of Virginia, and Union Pacific, collaborated in creating a triangle of trade where West Coast bound freight would be brought into the Port of Virginia and loaded onto Norfolk Southern rail cars. The containers would then be loaded onto a UP railcar in Chicago bound for the West Coast. This service also moves containers West to East, enabling Union Pacific to move out its own containers. Pacific Northwest shippers say they have been using this new trade service because they can get their containers out of the Port of Virginia. They are also redirecting containers down to the Gulf ports.
That’s all for this week. Enjoy the weekend and the song of the week, We Are Going to be Friends by the White Stripes.