Warehouse Wisdom. Weekly. 08/30/2024

Happy Friday!

It looks like the drama on the tracks isn't coming to a full stop just yet. In the latest update on the Canada rail dispute, the Canadian government has ordered no more work stoppages. Those trains are rolling again, with binding arbitration set to hash out contract disputes. But let's be real, this train ride is far from over, and it might take weeks before the country’s railroad networks are fully back in action and recovered from serious backlogs.

Aside from the Canada rail dispute, we have much to update you on this week’s newsletter. We will catch you up on the latest retail giants' clashes and innovations, the demand for faster and free shipping, the Panama Canal's return to normal, and more!

Marketplaces

Walmart takes on Amazon and expands e-commerce ambitions, while IKEA ventures into the secondhand market

The BIG news of the week: Walmart is gearing up for a showdown with Amazon in the logistics game. They’re opening up their fulfillment services to merchants who don’t just play in Walmart's sandbox. That's right—third-party sellers can now tap into Walmart's warehousing, delivery, and returns services for orders placed not only on Walmart's website but also on platforms like Target, Etsy, and even Amazon.

And Walmart eyes Mexico for e-commerce growth as its new boss is dreaming big with a plan to double sales in less than ten years. It’s a tall order, especially with competitors breathing down their necks. Perhaps your expansion strategy might consider this south of the border area?

Amazon’s third-party sellers can now pick their favorite trucking carrier to send LTL and truckload shipments to those busy U.S. fulfillment centers. It's like a choose-your-own-adventure, but with freight.

IKEA is boldly stepping into eBay’s turf with its new IKEA Preowned platform—because who doesn't love a deal on gently used furniture? The site promises to turn the chaotic world of secondhand shopping into a breeze. Currently testing in Madrid and Oslo, IKEA is on a mission to make sustainability as trendy as ever and push for a circular economy.

Small Parcel Shipping

Consumers demand faster shipping, UPS adjusts rural deliveries, and retailers struggle with oversized items

Consumers are insisting on free and fast shipping more than ever, with a recent survey showing they expect their online orders within just 3.5 days! AlixPartners reports that 92% of shoppers consider free shipping essential, and 25% will switch retailers if their delivery needs aren't met. With online shopping on the rise, retailers that can't keep up are playing a risky game!

UPS's cost-cutting strategies mean fewer deliveries and longer transit times to some rural areas. It’s like a game of consolidation, where they bunch up deliveries in certain ZIP codes to make things easier for their drivers. Just be prepared for an extra day in transit for affected packages because rural areas are like that distant cousin—harder to reach and more expensive to service than the bustling cities packed with folks just waiting to get their deliveries.

36.7% of retailers and e-tailers aren’t keen on delivering big and bulky items. Meanwhile, nearly half of the respondents say “oversized” fits more than 20% of what they sell. So, it seems efficient last-mile delivery for these hefty items is quite the hot topic!

Logistics Vitals

Americans are feeling the pinch as rising costs and inflation shift holiday shopping forecasts

• 87% of Americans are feeling the pinch and are "fed up" with rising costs. Can you believe 27% of folks won’t pay a penny more than what they're already shelling out?

• And a hefty 64% of U.S. consumers say the rising cost of living and inflation are turning them into careful shoppers this holiday season. And get this—11% of them are even planning to hit the pause button on the holidays as they’re eyeing those post-Christmas sales for their gift shopping.

• But still, more shoppers are leaping online to make their purchases. In a survey, 30.09% admitted to shopping at places like Amazon, eBay, and Etsy a few times a month, while 20.16% are the dedicated types who drop by a few times a week.

Warehouse and Logistics Labor

Amazon deemed as a joint employer for third-party drivers in California

The NLRB has decided Amazon isn’t just kicking the can down the road with third-party drivers—it’s officially a joint employer, not a subcontractor, in California. So, it looks like Amazon will have to share the credit (and maybe some responsibility) for those speedy deliveries and accidents. This also signals some legal implications for subcontractor roles in logistics.

Freight News

Panama Canal eases restrictions and the 3PL industry see long delayed growth

The Panama Canal is finally easing up on those shipping restrictions that turned global trade into a game of “Will My Cargo Ever Arrive?” Now that water levels are back to normal after that drought, the canal is back in business. Looks like smooth sailing is on the horizon for global shipping!

And the 3PL industry is finally back on the upswing, posting positive growth for the first time in two years! After a 5% increase in total shipments over Q1 2024 and a 3.5% boost year-over-year, it looks like the market’s got its groove back. Time to celebrate those gains and keep the momentum rolling!

Warehouse Quick Deliveries

USPS targets $3 billion in savings, online grocery shopping surges, and more…

• USPS Aims to Save $3 Billion per Year With Some Changes

• Online Grocery Shopping Continues to Rise in July 2024

• Ecological Disaster Unfolds as Oil Leak Continues from Red Sea Attack