While the Halloween season is just getting started, retailers are clearly looking ahead. This past weekend, I decorated my house with my kids with our usual Halloween flare: skeletons, spiders, skulls, gravestones, and the ever-present flying bat. But for retailers, Halloween is mostly in the rearview mirror (except for the candy sales and last-minute costumes), and they are preparing for the holiday rush. I keep reading reports that companies such as Amazon, Walmart, and Best Buy are planning to kick off massive holiday deals in late October / early November. According to a report by Adobe Analytics, tech gadgets to sporting goods will see “massive” online discounts, with the best bargains likely in late November. Walmart is already touting deals on computers, toys, and air fryers this week, while Amazon began a two-day “early access” sale Tuesday. Target’s weekly Black Friday deals have also started. Retailers are racing to tap seasonal demand as they struggle to reduce bloated inventories, and they have little choice but to offer price cuts in stores and online to entice consumers who have been hammered by this year’s surge in inflation. This could be a good holiday season for consumers. And now, on to this week’s logistics news.
Amazon in the news:
All Mars’ products in Europe to be sourced with 100% sustainable cocoa
Walmart+ InHome offering Loop in select cities
The latest menace on supply chains is Mother Nature
DHL Supply Chain to hire 12,000 warehouse employees ahead of peak season
Retailers add amenities to warehouses to attract workers
Now that the holidays season is apparently upon us, many companies are making their holiday hiring plans known. Amazon has announced that it is 150,000 employees in the U.S. to help manage the holiday rush. The company, which is staring down an ultra-tight labor market, bumped its average starting pay for warehouse and delivery workers to more than $19 an hour, up from $18 an hour. Amazon also announced that it is offering sign-on bonuses ranging from $1,000 to $3,000 depending on the area, in another sign it’s sweetening perks to attract and retain workers. The hiring ramp comes as Amazon prepares to host a Prime Day-like deal bonanza next week, the second time it will hold two such events in the same year. The event will serve as an early kickoff to what some analysts project will be a slower holiday season amid soaring inflation and fears of a recession.
Autonomous mobile robots have moved beyond the warehouse and are in the process of testing home deliveries. While some companies have seen success and plan to continue with these programs, Amazon is not one of them. Amazon is shutting down tests of its home delivery robot, the latest sign that the e-commerce giant is starting to wind down experimental projects amid slowing sales growth. Work on Scout, an autonomous machine launched about three years ago, has already been halted, according to a person familiar with the situation. Amazon spokesperson Alisa Carroll said the Scout team was being disbanded and would be offered new jobs in the organization. About 400 people were working on the project globally, according to the person, who requested anonymity to discuss a private matter. A skeleton crew will continue to consider the idea of an autonomous robot, but the current iteration isn’t working.
One of the commodities making headlines for deforestation is cocoa. But major players in the world’s chocolate industry have joined forces to stop deforestation in major cocoa producing countries, namely Côte d’Ivoire and Ghana. This all points to the move towards sustainable cocoa production. Mars Wrigley has declared that from 2023, 100 percent of the cocoa purchased for its direct factory operations in Europe will be verified as “responsibly sourced cocoa.” Mars Wrigley said it will be a key milestone and means the company will purchase a volume of responsible sourced cocoa equivalent to the volumes used in its European production. The company clarified that by claiming “responsibly sourced cocoa” in connection with a product, the company means that it has “sourced enough cocoa originating from farms benefiting from its Responsible Cocoa program to meet the products production needs.
Who doesn’t love to have products delivered into their homes? And who doesn’t love reusable containers? Well, Walmart and Loop are looking to combine the two. Loop, the circular reuse platform developed by TerraCycle, has joined Walmart’s InHome grocery delivery service in select cities. As of Oct. 10, customers in the metro areas of Bentonville and Rogers, Ark., can buy a limited assortment of products in refillable, reusable containers and have them delivered to their homes via Walmart+ InHome. The Loop assortment includes a combination of well-known food and household products from various brands, among them Gillette, Clorox, Cascade, Kraft Heinz, Seventh Generation, and Love Beauty and Planet, with more to be added to the product portfolio in the coming months.
Climate change and the extreme weather it spawns are making it harder for tangled supply chains to sync up with a slowing global economy. In the US Midwest, the problem is low river levels at just the wrong time — in the early weeks of the corn and soybean harvest. A logjam of more than 100 vessels in the falling Mississippi River is threatening to grind trade of grains, fertilizer, metals and petroleum to a halt. The largest US barge operator warned customers it won’t be able to make good on deliveries. In the Southeast, it may take four to eight weeks for logistics networks to fully recover from the damage from Hurricane Ian. As of Oct. 2, the seven-day average number of deliveries made in Florida was down by 32 percent week-over-week and down 31 percent month-over-month.
As mentioned above, the holiday hiring season is in full swing. DHL Supply Chain is continuing its tradition of hiring additional labor during peak season, despite what North American unit CEO Scott Sureddin noted has been a drop in consumer demand from pandemic highs. DHL Supply Chain plans to hire 12,000 warehouse workers to help handle peak season volume, the carrier announced on Monday. About 9,000 of the jobs will be in the company’s ecommerce and retail customer focused facilities. The logistics company is also planning to increase its use of robotics to enhance efficiency and offset labor constraints. DHL plans to deploy 2,000 collaborative robots across its network, up from 1,500 last peak season.
Retailers and distributors are looking for their newest warehouses to do more than store goods these days. Companies including outdoor goods retailer Recreational Equipment Inc. and drug distributor McKesson Corp. are adding features such as natural light, automation aimed at easing work burdens and fitness centers and outdoor work areas to make the industrial sites more inviting as they compete to recruit and retain workers in a tight job market. The upgrades are a departure from the often-grim industrial facilities at the heart of a warehouse business that has been booming in recent years even as getting workers has grown more difficult. Developers say the working environment in a warehouse, long considered simply utilitarian, is a growing consideration as firms talk about new sites.
That’s all for this week. Enjoy the weekend and the song of the week, in honor of my grandmother’s 99th birthday yesterday, The Beatles’ Birthday.