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This Week in Logistics News (October 29 – November 4)

By November 4, 2022Uncategorized

There are certain movies that are simply iconic. These are the movies that everyone has seen, everybody can quote, and if it is on TV and you’re flipping through the channels, you will always watch it. Office Space fits this category for me. And now, Walmart is reviving the 1999 cult classic with a new ad campaign that brings back two of our favorite characters, Bill Lumbergh and Samir Nagheenanajar. The ad is trying to create a new image for a “case of the Mondays” as the retailers is moving Black Friday to Mondays. The “Office Space” ads will surface in episodic fashion each Monday in November, and also appear on broadcast TV and in ads in movie theaters. A running joke in the movie was the unfortunate name of one of the main characters: Michael Bolton. While actor David Herman does not appear in the ads, Michael Bolton the singer does. And now on to this week’s logistics news.

Save Mart begins grocery delivery with Amazon
Walmart is now offering small businesses short-term rental leases
Driver shortage eases slightly in 2022 but relief likely temporary
Canoo to build battery manufacturing facility in Oklahoma
Tone sours on Q3 trucking calls
This Japanese wants to become the Moon’s delivery vehicle
Logistics industry growth slowed in October

The Save Mart Cos. has become the latest grocer to tap Amazon for same-day delivery. Modesto, California-based Save Mart announced that Save Mart banner stores in Lathrop and Ceres, California now offer two-hour grocery delivery via Amazon. Plans call for Save Mart to soon launch Amazon delivery at more stores in California’s Central Valley. To use the service, Save Mart customers who are Amazon Prime members and live in neighborhoods where same-day delivery is offered can shop online with the grocer at or through the shopping app. Save Mart associates pick and pack the orders at the participating store, and Amazon delivers the groceries to customers using Amazon Flex drivers. In support of the new grocery delivery service, Save Mart and Amazon are offering first-time customers 15 percent off orders of more than $50 for a limited time. Delivery starts at $4.99 for Prime members. Save Mart also partners with Instacart for grocery delivery and curbside pickup service.

Small businesses can now rent retail space in Walmart stores across the country. Through a new partnership with pop-up shop marketplace platform Popable, Walmart is now offering short-term leases to small businesses that don’t want to commit to longer contracts. Here’s how it works: After a company lists its offering on Popable’s website, small businesses can then be paired with their local participating Walmart to connect and enter into an agreeable temporary leasing agreement. According to Popable, the timeframe of these leasing agreements will be predetermined by the small business and can range in time from a month up to a year but could grow to a longer-term agreement. The terms are decided and negotiated by the brands and spaces directly themselves.

The truck driver shortage eased slightly in 2022, after more than 90% of TL carriers raised pay last year, but the industry still faces its second-largest number of vacancies on record, American Trucking Associations Chief Economist Bob Costello said Tuesday. The number of unfilled driver jobs slid to nearly 78,000, down about 4 percent from a record 81,258 in 2021, according to the association’s projections. The improvement is expected to be temporary, given that an aging workforce and freight demand are both projected to grow. The shortage projection, released on the final day of the ATA Management Conference & Exhibition at the San Diego Convention Center, is expected to grow over the next decade, Costello said. The industry must recruit nearly 1.2 million drivers over the next 10 years to replace drivers leaving voluntarily or involuntarily and avoid the driver shortage ballooning to more than 160,000 in 2031, the ATA still projects.

Electric vehicle startup Canoo Inc said on Wednesday it would build a battery manufacturing facility at Pryor in Oklahoma with a capacity of 3,200 Megawatt hours production. The company’s Pryor facility will make proprietary battery modules, energy management system and thermal control technology, CEO and Chairman Tony Aquila said. Canoo added it will be the first electric vehicle company to produce battery modules using hydro-power from the Grand River Dam Authority. The company’s new battery manufacturing facility will be in the same industrial park as its future “MegaMicro” factory, Canoo said. Canoo last year announced Panasonic Holdings Corp which also supplies battery cells to Tesla Inc, will be its provider for manufacturing battery packs. The EV startup, which is set to report third-quarter results on November 9, had access to about $250 million in capital at the end of the second quarter.

After racking up numerous quarters of record financial performances, truckload carriers are acknowledging the historic strength of the recent freight cycle has finally petered out. Sentiment from some of the nation’s largest fleets has turned considerably more tepid around freight demand and the outlook for 2023. Carriers were largely optimistic heading into peak season, calling for a normal stretch of stocking up ahead of the holidays, albeit not as robust as the last two years. However, as September progressed demand cooled and capacity continued to loosen. A deceleration in fundamentals during late September was notable in responses to a monthly supply chain survey. The Logistics Managers’ Index showed respondents said transportation capacity loosened and pricing fell at an accelerated pace during the last 15 days of the month. The diffusion index, wherein a reading above 50 indicates expansion while one below 50 indicates contraction, showed the view on capacity was 9.2 percentage points higher at 76.9 with pricing down 14 points to 36.8 in the back half of the month.

The space race is heating up as more companies look to colonize like the Jetsons. Among those is a small Japanese company seeking to make a mark as early as this month with what could be a first for a commercial firm. Tokyo-based ispace Inc. is scheduled to send a lunar lander earliest by November 22, carrying multiple government and commercial payloads, including two rovers. Like Musk’s dream for a Martian colony, the startup’s grand vision is to build a human settlement on the moon by 2040, but before that it wants to become the lunar version of FedEx — earning money by ferrying scientific equipment and commercial goods to the moon. Ispace’s maiden mission will put to the test not just the technological credentials it’s built since its founding in 2010 but also the faith of its backers, one of whom is a former SoftBank Group Corp. executive. A lot rides on its success, including a potential initial public offering as early as this fiscal year and a shot at a bigger sliver of an industry pie that Morgan Stanley estimates will triple to $1 trillion in two decades from 2020.

Economic activity in the logistics industry slowed in October, continuing a moderating growth trend that began earlier this year, according to the monthly Logistics Manager’s Index (LMI) report, released today. The LMI registered 57.5, its lowest reading since May 2020, when the height of the pandemic ushered in an era of exceptionally strong growth in demand for logistics services. Although slowing, the monthly index still indicates industry expansion, as an LMI reading above 50 indicates growth, and an LMI below 50 indicates contraction across logistics markets. The LMI had remained in the upper 60s and 70s range throughout the pandemic, falling to the low 60s and high 50s for the past four months. The change continues to be driven by a slowdown in transportation markets and a glut of inventory that is driving up costs. The transportation capacity index edged up 1.3 points compared to September to a reading of 73.1; this is the highest such reading in the history of the index, exceeding the freight recession of 2019 and marking a new low in the downturn being felt in transportation, the researchers wrote. Transportation prices fell for the seventh straight month, declining more than two points from September to a reading of 42.2.

That’s all for this week. Enjoy the weekend, and the song of the week, the Geto Boys’ Damn it Feels to be a Gangsta from Office Space.

The post This Week in Logistics News (October 29 – November 4) appeared first on Logistics Viewpoints.

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