Warehouse Wisdom. Weekly. 06/21/2024

Happy Friday!

As we kick off this week’s newsletter, we've got a mixed bag of news hotter than a summer heatwave. Consumer sentiment has taken a plunge to a seven-month low this June—yep, we’re all feeling the pinch, with the index dropping 3.5 points. But here's the twist: consumers are still ready to spend despite smaller jobs and wage gains! Maybe it’s retail therapy or just the lure of those summer sales (we won’t judge!).

Speaking of spending, Walmart experienced sticker shock of its own when New Jersey fined it over in-store pricing discrepancies. Walmart had to cough up $1.64 million to settle charges that its New Jersey stores were playing dirty with pricing. This is a reminder to always double-check those price tags because even the big guys aren't immune to the occasional oopsie.

But hey, amidst all this financial rollercoastering, we're here to bring you the latest news. This week, we will crack open about the May retail sales increase, Amazon facing a $5.9 million fine over labor law violations, rising warehouse wages, TikTok adding AI avatars for online sellers, shipping industry calls for action in the Red Sea, companies joining the autonomous truck revolution, and more!

LOGISTICS VITALS

MAY RETAIL SALES INCREASES, REACHING $703.1 BILLION

Well, well, well, it looks like U.S. retail sales are on the up and up! According to the U.S. Department of Commerce and the National Retail Federation, May retail sales reached $703.1 billion, showing a 0.1% increase from April and a 2.3% jump from last year. Let’s take a closer look at the increased total retail sales:

• 2.9% March to May

• 0.2% April to May

So, basically, May's retail sales show consumers are doing pretty well despite some fluctuations in spending growth. The economy is still chugging along nicely, with strong job gains helping people feel confident spending money. Overall, things are looking up, so keep on shopping.

LOGISTICS JOBS

AMAZON FACES $5.9M FINE, WORKERS UNIONIZE WITH TEAMSTERS, AND WAREHOUSE WAGES RISE

Listen up, folks; big news is coming your way! So, get this - Amazon got hit with a $5.9 million fine for violating a law against warehouse productivity quotas, with over 59,017 violations at two Amazon sites in Moreno Valley and Redlands. This law from 2022 says companies have to tell employees about productivity quotas and what happens if they don't meet them. Plus, they can't force warehouse workers to hit unsafe quotas that stop them from taking breaks or even using the bathroom. But, apparently, Amazon claimed they don't need quotas, just a "peer-to-peer evaluation system." However, the state wasn't buying it - they said Amazon failed to provide the required written notice of these so-called quotas. But hey, rules are rules, Amazon. You gotta follow them.

And looks like the Amazon union is teaming up with the Teamsters to take on the big bad giant. Amazon has been playing hard to get for two years, refusing to acknowledge the union or negotiate with its 5,500 workers in Staten Island. But now, the Teamsters, with 1.3 million members, are joining the fight for better wages, longer breaks, and safety standards. Amazon, of course, has been dragging its feet and claiming most of its employees don't want unions. But the Teamsters aren't backing down! Seems like Amazon's world domination plans are hitting a few speed bumps.

Meanwhile, warehouse workers are finally getting a raise, making an average of $18.99 per hour. That's a 40-50% increase in the last five years, so start practicing how to count that extra cash! It wasn't long ago that starting pay was $12 to $14 per hour – talk about a raise. This wage increase is now pushing businesses to invest in technology and automation to cut costs. And as if that wasn't enough, the tight market for industrial real estate is starting to loosen up. Looks like the warehouse industry is booming, both in pay and space.

MARKETPLACES

TIKTOK INTRODUCES AI AVATARS AND DUBBING TOOL, WHILE EBAY EMBRACES VENMO FOR SEAMLESS CHECKOUT

TikTok just rolled out generative AI avatars for creators and stock actors for branded content and ads. And get this, they're throwing in an "AI Dubbing" tool, too. Now, you can have your own custom avatar to represent you or your brand spokesperson. Want to go global? No problem! Just scale your avatar to be multilingual. And if you're feeling lazy, there's always the option to use a pre-built stock avatar created with paid actors. Because who doesn't want to add a human touch to their content, right? So, TikTok is basically turning us all into virtual superstars!

After eBay said "Bye-bye" to Amex as a payment option, it now says "Hello" to Venmo at its checkout. You can now link your Venmo accounts to eBay, making purchases a breeze. No more entering Venmo details for each purchase, and you can even share the payment on your Venmo feed if you're feeling generous. eBay sure knows how to keep things interesting.

OCEAN FREIGHT

SHIPPING INDUSTRY DEMANDS ACTION IN THE RED SEA, WHILE CONTAINER RATES ARE ON THE RISE

Enough is enough – the shipping industry calls for action in the Red Sea. Oh boy, the international shipping industry is not happy about the sinking of the M/V Tutor. It's the second time the Houthis have sunk a commercial vessel since November. And just to add insult to injury, they also attacked the M/V Verbena with missiles, causing fires and chaos. In response, shipping industry groups are not amused and have issued a joint statement calling for action. They're not playing around, condemning these attacks as violations of freedom of navigation and demanding safety for innocent seafarers. Those Houthis better watch out; the shipping industry means business.

It seems like shipping container rates are rising everywhere you look due to port congestion. While inflation may be cooling off in other areas, the cost of shipping containers from Asia to the US and Europe keeps increasing. Prices for a 40-foot container have tripled since the end of 2023 and now exceed $6,000 on three major routes. But, hey, at least the rate of increase is slowing down. Blame it on those pesky attacks on vessels in the Red Sea, causing chaos in the industry that handles 80% of international trade. It's like trying to weave through a traffic jam in Asia's biggest ports! 

SHIPPING

USPS ADJUSTS PRIORITY MAIL BOX OFFERINGS AMID LOGISTICS CHALLENGES, WHILE COST PRESSURE REMAINS

You better start stockpiling those free USPS boxes while they last, as USPS is getting rid of some of its free Priority Mail boxes, including the medium ones. Apparently, they're trying to “simplify” things with their Delivering for America plan. So, if you love the Variety Pack, medium box Option 2, DVD box, and Express medium Box Option 1, you better stock up while you can – they're no longer being produced. Don't worry, though. Flat Rate boxes are still on the menu; they are just not in variety packs. So, order your favorite sizes before they disappear!

However, USPS promises that all of its recent changes will not hurt service levels. They say they can handle the changes in package volume because of their new shipping partner setup. But some people are like, "Uh, maybe not." The Postal Service has been pushing its partners to send packages earlier in the process, which could cause delays. In a filing to the Postal Regulatory Commission, USPS admitted they're still determining how this will all play out, but they're keeping an eye on it. They're asking potential customers to give them info on how much stuff they plan to send so they can figure out if they can handle it. In other words, USPS is on top of things, even if it's a bit of a balancing act.

Additionally, a new CSCMP report shows an 11% drop in costs, but inflationary pressures remain. The line between retailers, logistics providers, and carriers is getting blurrier, according to the report. Business spending on logistics services in the U.S. fell to $2.4 trillion in 2023 as supply chains got back to normal after the COVID chaos. However, costs are still pretty high, following big jumps in 2021 and 2022. Seems like logistics is playing hard to get with our wallets.

WAREHOUSE TECH

WAABI AND KODIAK ROBOTICS LEAD CHARGE IN AUTONOMOUS TRUCK REVLOLUTION

Another company is coming to the AI driverless truck party! Waabi, a Toronto-based AI company, has raised $200 million in funding to roll out fully driverless trucks. The funding, led by Uber and Khosla Ventures, also includes big names like Nvidia, Volvo, and Porsche. With over $280 million in total investment, Waabi plans to deploy generative AI-powered autonomous trucks by 2025. Uber's CEO, Dara Khosrowshahi, expressed excitement about the potential of autonomous technology to revolutionize transportation for a safer and more sustainable future.

Artur Express and Kodiak Robotics are teaming up to put 100 sleeper trucks on the road with self-driving technology. They've already got four battery-electric trucks cruising around St. Louis, so why not add some autonomous ones to the mix? Kodiak plans to have their tech in Artur Express trucks by the second half of 2025. Meanwhile, Kodiak's trucks with drivers are hitting the road from Dallas to Houston soon, but watch out, Atlanta, you're next on the list. CEO Don Burnette is all about those driverless routes, so get ready for a future filled with automated trucking adventures!

WAREHOUSE QUICK DELIVERIES

MAY ONLINE GROCERY SALES DECLINE AND BNSF TO PAY WASHINGTON TRIBE FOR TRESPASSING

• May Online Grocery Sales Decline as Consumers Reduce Pickup Orders

• BNSF to Pay Nearly $400 Million to Washington Tribe for Trespassing