Warehouse Wisdom. Weekly. 07/26/2024

Happy Friday!

It may be prime vacation-taking time, but supply chains have no margin for a break. How bad has it been? Well, so “disrupting” that that a new trade group has been formed to safeguard against supply chain disruptions. Prologis, Johnson Controls, Sierra Northern Rail Company, and more are all in on the action. They aim to ensure that the global shipping network is prepared for various challenges, such as attacks, droughts, and labor-management issues related to automation.

Buckle up because this week’s newsletter is packed with the latest scoop on how our e-commerce habits are giving Mother Earth a workout—and not the kind she signed up for! Grab your eco-friendly coffee cup and settle in as we update you on this week's latest news. We will dive into the fragility of global supply chains, how businesses navigate supply chain turbulence, the effects of warehouses and trains on air pollution, how technology is revolutionizing warehouses, and more!

LOGISTICS VITALS

THE ROLE OF E-COMMERCE ON THE ENVIRONMENT

So, while e-commerce is a win for businesses, it’s not exactly a green victory. E-commerce sales have shot up by 60%, hitting $27 trillion, showing its importance in the global economy. But wait, there's a catch! The environmental impact of e-commerce is no joke - it's huge and getting bigger. Let’s look at the data:

• 1.2 billion: annual smartphone shipments in 2023

• 39 billion: projected surge of shipments of IoT devices by 2029

• 80%: generated smartphone greenhouse gas emissions

• 30%: the increase between 2010 and 2022, reaching 10.5 million tons of waste from screens and small IT equipment

These numbers show that making digital devices is resource-hungry. The thirst for minerals is also soaring, with estimates seeing a 500% jump by 2050.

Speaking of thriving, the results of our latest survey show that Shipstation is the winner for the most popular fulfillment and shipping software! It seems that while we’re all shopping up a storm, at least our shipping game is on point.

SUPPLY CHAIN DISRUPTIONS

CROWDSTRIKE DISRUPTION AND RED SEA ESCALATIONS UNVEILS FRAGILITY OF GLOBAL SUPPLY CHAINS

With the CrowdStrike disruption last week, even though just 8.5 million Windows devices were affected, which is less than 1% of all machines, the outage had a big impact. The increasing reliance on interconnected computer systems means industries are facing significant risks, so managing third-party updates is crucial. The disruption highlights the fragility of supply chain infrastructure, already stressed by rising e-commerce demand and limited freight capacity.

And as if things weren't complicated enough, there are even more escalations in the Red Sea. The Red Sea saw an 80% drop in maritime traffic due to conflict between Yemen's Houthi rebels and Israel. Last weekend, the Houthi rebels attacked Tel Aviv, with Israel retaliating by bombing Yemen's Hodeida port. As a result, shipping companies are rerouting their vessels yet again. Not only is this costly, but is adding to the impact on the environment, with carbon emissions jumping by 23 million tons. This whole situation is getting out of hand, and it's not good for anyone involved.

And there has been a great deal of effort from the U.S. to help de-escalate things - Dwight D. Eisenhower returns after a seven-month fight with Houthi drones and missiles. Alongside Eisenhower, the U.S. government also got in on the action, launching strikes on Houthi infrastructure in Yemen to try and calm things down.

FREIGHT AND SHIPPING

IMPORT RUSH, FREIGHT CHAOS, AND INDUSTRY WOES: NAVIGATING SUPPLY CHAIN TURBULENCE

Business owners relying on suppliers in Asia should hurry up with their import schedules! Fast fashion sales are booming, making air freight space rare and pricey. Plus, a rush to ship products to the U.S. way ahead of time is sending maritime shipping costs through the roof. Why the rush? Well, violence in the Middle East is messing up shipping lanes, there's talk of a port worker strike, and tariffs on Chinese goods are increasing on August 1st. So, better get moving before importing from Asia gets even pricier and more unreliable!

And, ‘last chance’ for East Coast importers to stock up before a possible strike! The lead time for Chinese exports to the U.S. East Coast is just over two months. CEO Lars Jensen says this week is the "last chance" for the average U.S. importer to get their products moving before the strike. This is because the European port congestion is almost at pandemic levels, and past delays from extreme weather near the Cape of Good Hope are still causing problems.

Bye, bye expedited services? UPS parcel volumes grew, but profit decreased as customers downgraded to economy service. UPS saw some growth in domestic parcel volumes in the second quarter, but their stock took a 13% hit because revenue and profit didn't meet expectations. Now, UPS is looking at a 2024 revenue projection of $93 billion. Adjusted operating income took a 29.3% hit year over year and fell 11% below consensus estimates. To try to boost package volume, UPS cut prices, but it didn't quite work out as expected, leading to a drop in their revenue outlook, with a 2.6% decrease in average revenue per domestic package.

And more news about theft, but it’s wage theft this time! Long-distance truckers are experiencing wage theft in the trucking industry. Many companies are dodging payments, leaving drivers struggling and facing processing delays. Despite government orders, companies continue evading payment, causing drivers financial troubles. Let's hope these companies start playing by the rules before they run out of road.

SUPPLY CHAIN SUSTAINABILITY

RESIDENTS BATTLE TRAIN IDLING AND WAREHOUSE POLLUTION

Residents in River Forest are not happy with trains that just won't quit idling by their homes, causing noise and fumes to fill the air. Despite contacting Union Pacific for help, the trains just keep chuggin'. Now they're worried about their health with all that diesel exhaust hanging around. Union Pacific blames the congestion on the busy rail hub in Chicago and even the weather. But seriously, no amount of diesel pollution is safe, especially when it's right outside your door for days on end.

And it looks like the e-commerce and warehousing industries are causing air pollution concerns in the U.S.. With nearly 150,000 warehouses, local traffic-related air pollution is worsening by around 20%. The more warehouses, the more pollution from truck traffic and NO2.

This week’s news on smog doesn’t stop there. Amazon and other online retailers have made shopping super easy, but a new study says it's bad for your health. Big warehouses for online shopping pollute the air, increasing the risk of asthma and other health problems for nearby residents. Delivery trucks and vehicles near these warehouses increase the harmful gas nitrogen dioxide by 20%. Lead researcher Gaige Kerr warns that people who are downwind are breathing in more pollution because of all the truck traffic.

ONLINE MARKETPLACES

COOKIE CONTROVERSY, E-COMMERCE WARS, AND FAKE REVIEWS CRACKDOWN

Google's plan to remove third-party cookies from Chrome by 2025 has been called off. Advertisers were worried about how this change would affect their targeting capabilities. But now, Google is introducing a new feature that lets users control their browsing experience. Instead of saying goodbye to third-party cookies, Google is giving users the power to choose their privacy.

How big are the stakes for online retail? It is big enough for e-commerce giant Taobao to introduce free overseas shipping on apparel orders to win business from rivals Temu and Shein. Starting Aug. 3, the program will kick off for shoppers in Singapore, Malaysia, South Korea, Taiwan, Hong Kong, and Macao. More Asian markets will join by the end of the year as the company is trying to convince more merchants to jump on board. So, look out for a special section on the Taobao site featuring eligible items!

Are your reviews real? They better be. Amazon and the Better Business Bureau are teaming up in a lawsuit to fight it. Amazon and the Better Business Bureau teamed up in a tag team match against ReviewServiceUSA.com. This shady site was trying to peddle fake positive reviews for Amazon and BBB listings. Amazon isn't playing when it comes to fake reviews— as they blocked over 250 million suspects in 2023. Shape up or ship out fake reviewers!

WAREHOUSE TECH

HOW TECHNOLOGY MAKES EVERYTHING EASIER FOR WAREHOUSES

The warehouse robot that could kill the forklift? Imagine a robot that could outperform a forklift in a warehouse setting. Mytra, a new robotics startup, aims to revolutionize warehouse operations with its robot and storage rack system. This system, created by Tesla and Rivian alumni, is both simple and complex. It might even make forklifts obsolete, but don't worry; forklifts still have their strengths in loading trailers and stacking pallets. Mytra's system just means we won't need as many of them.

Speaking of robots, Vayu Robotics, a California startup, just launched an "on-road delivery robot" for online retailers. They think e-commerce deliveries are too expensive, so they made a robot using AI and low-cost sensors. This robot doesn't need expensive lidar sensors like other mobile robots do. It can drive on roads without pre-mapping them, deliver packages, and carry up to 100 lbs. Plus, it can do all this at under 20 mph. How cool is that?

Google is also expanding its tentacles into the supply chain tech space. The CMA CGM Group is partnering with Google to spice up their shipping, logistics, and media game with AI magic. They get to tap into Google's AI solutions, pick the brains of Google experts, and use special tools designed just for them. The goal is to optimize vessel routes, container handling, and inventory management - all to deliver goods faster and cheaper while being eco-friendly!

WAREHOUSE QUICK DELIVERIES

UPS TO BUY ESTAFETA WHILE XPO LAUNCHES MEXICO CROSS-BORDER SERVICE, AND MORE…

• UPS to buy Estafeta, a Mexican Express Delivery Firm

• Not to be Outdone - XPO Launches Mexico Cross-Border Service

• Walmart’s New Approach to Grocery Delivery

• Kroger’s New Warehouse Robotics Deal

• A New Way to Handle Returns?

• Mega Warehouse Activity Increases in 2024