Warehouse Wisdom. Weekly. 12/01/2023

Only the most relevant news for SMBs to improve logistics – picked, packed, and delivered without the bias.

Author

Will Schneider
December 01, 2023

Happy Friday!

The end of the year is quickly approaching and we’re getting closer to opening up presents - so why is everyone feeling so stressed out? According to a recent survey, it’s because you work in the most stressful industry! Yes, that’s right, warehousing and storage topped the list. From keeping up with record setting holiday package deliveries to avoiding supply chain disruptions, it’s no wonder you’re probably counting the days to your next vacation.

But before you hit the airport and get out of dodge, let’s catch up with the week’s latest logistics news, including: record breaking Black Friday and Cyber Monday sales, Amazon’s move to shipping dominance, The White House entering the supply chain scene, and more.

LOGISTICS VITALS

GLOBAL ECONOMY STRUGGLES TO KEEP ITS HEAD ABOVE WATER

Before we get to the good news from last week’s holiday shopping, let’s take a brief look at the global economy. Warning - the news is not as good as those Black Friday, Cyber Monday (BFCM) results:

ONLINE MARKETPLACES

BFCM SALES RECHARGE RETAILERS’ BATTERIES WITH RECORD BREAKING SALES

We’ve got lots to catch up on from last weeks’ holiday sales madness. Can you say “the biggest shopping of all time”? That’s exactly what consumers said with their pocketbooks.

According to the annual survey released on Nov. 28 by the National Retail Federation and Prosper Insights & Analytics, a record-breaking 200.4 million consumers shopped over the holiday weekend from Thanksgiving Day through Cyber Monday, greater than last year’s 196.7 million.

Cyber Monday itself reached $12.4 billion, a 9.6% year-over-year increase and the biggest online shopping day of all time, according to Adobe Analytics. Black Friday notched consumers $9.8 billion in U.S. online sales.

In-store shoppers declined slightly, to 121.4 million from 122.7 million in 2022. However, the number of online shoppers grew, from 130.2 million last year to 134.2 million this year.

For the season to date (Nov. 1 to Nov. 27), buy now pay later (BNPL) usage is up 17% YoY. Smartphones drove over half of online sales over the weekend (54%, up from 52% last year). And discount rates rose to 28% globally and 30% in the U.S.

What started with uncertainty ended with record breaking sales. Let’s hope that the tide continues into the rest of the holiday shopping season and beyond!

SHIPPING AND FREIGHT

AMAZON LOGISTICS’ EGO STROKED IN SMALL PARCEL DELIVERIES RACE

Move over UPS and FedEx - Amazon has officially taken over! After eclipsing FedEx in 2020, the Seattle e-commerce giant delivered more packages to U.S. homes in 2022 than UPS. Amazon is projected to ship around 5.9 million packages this year, up from 5.2 packages delivered last year. In comparison, UPS is projected to send less than 5.3 million. Astonishingly, the UPS numbers also include packages that are handed over to USPS for final delivery, whereas the Amazon figures only include packages delivered from start to finish. Of course, the reigning champion of delivery is still the good old USPS, delivering “hundreds of millions” of packages a year!

But growth like that doesn’t come without some complaints – and it’s small rural towns that are doing the griping. Apparently, mail is stockpiling while postal carriers are being ordered to give Amazon packages the priority, leaving ‘the locals’ with a frown instead of a smile. It’s no small problem either, with important mail including checks, medical samples, health documents, tax rebates, and other vital contents getting backed up for days. No wonder the rallying cry is becoming “USPS belongs to the people, not Amazon.” Sounds like there’s still some reason for Amazon to stress despite its new position of number 1.

PRODUCT SOURCING

BIDEN TO THE RESCUE FOR SUPPLY CHAIN PANIC ATTACKS

Still having nightmares about going to the grocery store and seeing the shelves empty? President Biden aims to ensure that will never happen again. To help keep the supply chains strong, the White House is forming a new Council on Supply Chain Resilience. Under the plan, he plans to make a significant investment in producing medicines domestically, create a new data-driven Supply Chain Center with the Department of Commerce to analyze potential supply chain risks, and provide incentives for clean energy supply chains. The hope is to not only ensure Americans get the food, drugs, and goods they need, but also to keep prices in check. Here’s to hoping that there won’t be any more panic attacks in the toilet paper aisle.

And the “official” news doesn’t stop there. The White House Council on Supply Chain Resilience also announced the creation of the Office of Multimodal Freight Infrastructure and Policy to oversee the maintenance and improvement of the nation’s freight network and supply chains. The office will oversee the development of the national multimodal freight network, review state freight plans, and provide technical assistance to state and local governments, with the goal of getting goods to shelves faster and cutting costs for consumers. Now that’s a governmental seal of approval.

WAREHOUSE OPERATIONS

WAREHOUSE INSURANCE PLANNING IS THE PILL TO AVOID ISSUES & RATE HIKES

As the year gets closer to coming to a close, it’s time to start tidying up that warehouse to do list. We know – you’d rather be cozying up on the couch with a hot chocolate and watching your favorite Christmas movie instead of negotiating those warehouse insurance contracts! But putting a little bit of time into planning can shave some sizeable dough off of those hefty premiums.

In particular, according to Sovereign Insurance, make sure sprinkler safety systems are in good working order, your fire load limits aren’t posing additional risk, your warehouse building is appropriately valued, and that you’ve got a good idea of the total value of all contents. And for cold storage facilities, make sure you have a comprehensive plan in place to avoid spoilage, since that is a killer for rates in the insurance industry.

Now that you’ve given insurance a little thought for the new year, you can get back to that comfy sofa and zone out!

WAREHOUSE AUTOMATION AND AI

AUTOMATION AND AI BECOME AS CRITICAL AS OXYGEN TO SUPPLY CHAINS

How much has automation impacted supply chains? According to Scot Hamilton, vice president of planning technology at Amazon, AI is as critical as oxygen to the company. In order to meet the record breaking BFCM sales demands this last week, Amazon used AI and automation in almost everything, including:

  • Personalized Amazon homepage for consumers

  • Demand forecasting and stocking on warehouse shelves

  • AI-enabled robots equipped with machine vision to sort and inspect goods

  • Mobile robots to fetch inventory

  • An AI assisted Robin robot uses its AI enhanced vision system to properly load delivery vehicles

  • And AI is even used to predict the unexpected on the roads

But after reading that, you might be thinking “Why not make humans take a hike?”. Though there are many pros to automation, there is no reason to give humans the boot as they do many things very well that robots cannot. In addition, robotics powerhouses like Symbiotic and Vecna have even reported in their man implementations that creating a cohesive team of robots and humans is vital to success. So, despite the constant dissing, Artificial Intelligence is not about Man vs. Machine in a Heavyweight bout but rather about balance and harnessing both in the best way possible.

WAREHOUSE QUICK DELIVERIES

CONTAINER SHIPPING DOWN IN THE DUMPS, AND MORE…

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“Honestly, I think if we're successful, Americans won't have to think about supply chains”

-Joelle Gamble