Warehouse Wisdom. Weekly. 09/06/2024

Happy Friday!

Are we in for a prolonged global financial crisis? According to the Institute for Supply Management’s August PMI of 47.2% (a reading below 50% signals contraction), increasing inventories and cratering demand are creating a very worrying signal. In fact, the production levels have fallen to levels not seen since the early days of COVID. With softening sales, prolonged inflation, weekly freight volatility, and other supply chain disruptions, it certainly seems like we’re not yet closing in on the light at the end of the tunnel.

The logistics and warehousing industry sure could use some good news these days - and in this week’s edition we have a little of that, including freight capitalizing on disruptions and reaping increased profits, and truckers seeing wage increases. We also catch you up on California pushing the envelope in warehouse regulation, the latest in retail fraud, and more. Oh, and there’s even a few small treasures washing up ashore from the 1997 Great Lego spill!

Freight and Shipping

Ocean freight and air freight rake in the profits

Supply chain disruptions aren’t spelling disaster for everyone. Profits surged significantly in the container shipping industry in the second quarter. The upturn is largely attributed to the ongoing issues on the Red Sea. But another factor is unprecedented volume growth.

And air cargo carriers are enjoying a massive rise in average spot rates. Rates have increased a whopping 24%, driven largely by the growth in e-commerce retail demand and alternative shipping methods resulting from the Red Sea crisis.

And speaking of deliveries, the world’s largest wind-powered cargo ship just made its first delivery.

Relying heavily on USPS for the upcoming holiday season? Perhaps it’s time to start creating some failsafe backup plans just in case. The agency said that operational changes, severe weather, unanticipated facility closures negatively impacted its service. A report last week revealed that package volume increased but on-time performance targets fell. Although the agency is planning to put in more planning work and has a new air shipping partner in UPS, the numbers don’t leave a warm and fuzzy feeling of confidence for the future.

Warehouse Operations

California is leading the charge against warehouses taking over neighborhoods

California is inching closer to regulating the proximity between warehouses and residential areas. The bill, which is close to passing, would tighten building standards for new warehouses, ban heavy-duty diesel truck traffic next to sensitive sites including homes, schools, parks and nursing homes, and require local governments to update truck routes to avoid residential streets.

Meanwhile, nearshoring continues to explode in interest among businesses, with 92% of respondents indicating they plan to incorporate it in their short-term planning efforts.

Logistics Vitals

Retail returns fraud strikes B2C and B2B

What’s the newest form of fraud hitting B2C and B2B retailers in the jaw? Returns fraud. And just how big of a problem is it? Returns fraud is so big that all 600 retailers surveyed in a recent Loom Returns Survey indicated that they had experienced returns fraud or policy abuses in the past 12 months. But why is this becoming such a big issue? According to retailers:

• 43% said it’s because the current economic climate is leading shoppers to try to exploit return policies to improve their financial situation

• 41% said it’s due to dissatisfaction with product quality

• 35% said it’s because of an intent to use items only temporarily!

So, what’s a retailer to do? According to the poll: tighten returns policies, require more customer impact, ban repeat offenders, implement returns fees.

Warehouse and Logistics Labor

Trucking wages see 10% growth

Trucking wages are still rising despite all the challenges. According to the American Trucking Association, truckload drivers’ pay increased 10% to $76,420 on average, while linehaul drivers earned $94,525, and local LTL drivers earned $80,680.

Marketplaces

Etsy is making big website updates and Walmart Marketplace is growing up fast

Sell on Etsy? The company is making big changes to help you sell better and to help buyers find products easier. By changing its search ranking algorithm and putting greater emphasis on more detailed descriptions, high quality photos, and customer service track record, the company is seeing improved performance and a rise in four- and five-star reviews. Need help improving your listing? Etsy even created a new website with tips for sellers.

Not to be outdone, Walmart Marketplace has grown 50% in one year. The marketplace now boasts 150,000 active sellers, with a massive 50,000 new sellers joining in the past 12 months.

And with holiday shopping forthcoming, perhaps it’s time to take a second look at your ideal customer profile and target market. This recent report by shows some of the latest trends around who is shopping where.

Warehouse Quick Deliveries

FedEx attempts to grow fulfillment network, Shopify adds perks in Europe, and more…

• Electronic bills of lading build momentum.

• FedEx invests in Nimble to scale their FedEx Fulfillment offering.

• Shopify rolls out a new platform with Shipster that connects UK and European merchants with 100 couriers.