Happy Friday!

Valentine's Day just ended, but we hope you still feel extra ‘loved’ from the holiday…unlike truckers in Texas, that is. Apparently frustration rules the roads in the Lone Star State, where there are more freight bottlenecks than anywhere else in the nation, according to the American Transportation Research Institute data. The Washington Bridge, at the intersection of Interstate 95 and State Route 4 in Fort Lee, New Jersey, holds the title for the busiest point of trucking congestion.

Freight bottlenecks are such a growing problem across the globe, in fact, that companies are even taking unheard of measures to make up for lost time due to the traffic jams – including breaking the law! That’s right – a freight company in the city of Xiangyang, in Hubei province, China, was busted due to installing GPS trackers on police cars? The owner admitted that she installed these trackers on police cars so that she could monitor them and alert her drivers on their location so that they could avoid them, and speed as needed. Wow!

Hopefully your commute produces quite a bit less drama. But there is plenty of theatrics to report this week in the warehousing and logistics sector, including Amazon’s bad week, more U.S.-Mexico border tensions, small parcel carriers duking it out, and much more. Let’s dive in and get through the week’s new quickly so you can leave early today and avoid rush hour traffic.

LOGISTICS VITALS

JANUARY SEES SURGE IN ONLINE RETAIL SALES BUT DECREASES OVERALL

It looks like consumers aren’t quite as optimistic as some thought. The U.S. Commerce Department reported a spending decline in January retail sales, correlating with freezing temperatures that kept consumers at home. But there is some silver lining in the bad news. According to CNBC and the National Retail Federation’s Retail Monitor, online retail sales grew in January. That’s enough good news to give hope to all of you e-commerce marketers:

• -0.8% - the decline in total retail sales month-over-month in January.

• 25.47% - the growth in total online retail sales year-over-year in January.

ONLINE MARKETPLACES

AMAZON’S BAD WEEK INCLUDED INJURED WORKERS, SHADY BUY BOXES & CHINESE DEPENDENCE

Don’t look now, but Amazon wasn’t making news for a good reason this week. At its largest warehouse in Clay, 1 out of every 10 workers gets injured on the job, according to reports. That is more than TWICE what they are at non-Amazon warehouses across the U.S.!

Amazon's being in hot waters doesn't stop there, as a lawsuit was filed against them due to their "ubiquitous 'Buy Now' button." Two Californians filed the lawsuit last week on behalf of other customers who have been using the buy now button since 2016. According to the allegations, Amazon only favors the sellers that use their delivery service (FBA Sellers) to be in the buy box – but not with the best deals. This complaint is not new to the e-commerce giant since they have long been accused of using price-gouging algorithms to manipulate outcomes, which is way more favorable and profitable for them.

The problems continue to pile up with Amazon's significant reliance on Chinese sellers. With China dominating the production scene, it's no surprise they have penetrated Amazon. Today, a whopping 50% of top-rated sellers on Amazon are from China, providing goods for self-care, beauty, home goods, and more. Not the greatest news to hit the U.S. presses, but we’re sure their PR team is hard at work.

FREIGHT AND SHIPPING

LEGISLATION TAKES CENTER STAGE AS THE U.S. NAVIGATES CONGESTION AND BORDER ISSUES

Remember those pesky freight bottlenecks we talked about earlier? Well one major U.S. city is taking matters into their own hands. To address the congestion of truckers on land, NYC plans to shift to road-to-sea transportation. This will help handle the growing number of deliveries and reduce truck-based emissions and city road wear and tear. The plan to turn 6 new water shipping hubs was published last Friday.

But NYC isn’t the only place where government is hard at work to keep logistics moving in the country. The U.S. Senate introduced the "Keeping International Land Ports of Entry Open Act" to ensure that border security staff remain at commercial ports of entry. The legislation has garnered support from various groups and senators, who emphasize the need to hold the administration accountable for freight border policies, especially at the Mexico and Canadian borders.

While the Senate is contemplating border policies, our northern and southern neighbors just keep breaking records for U.S. trade statistics. The U.S.-Mexico cross-border trade rose 2.5% to $798 billion in 2023. Laredo, Texas, leads the spot with a gateway of $320 billion, with its success in commerce with Mexico and the growth of nearshoring amid strained U.S.-China relations. The trend reflects Mexico's expanding manufacturing base and serves as an alternative to China for production. Oh, and Canada was #2, also above China.

But all the good trade news for Mexico doesn’t come without a few hiccups, including a couple of big snafus this past week. A computer glitch at Mexico’s Custom Agency disrupted freight movements for up to three days, affecting truck traffic at the U.S. border and causing delays at ports and airports. The disruptions led to significant financial losses, estimated at $23 million a day, and raised concerns about the handling of the situation by government agencies. And former Mexican railway workers disrupted commerce at the borders of Arizona and Texas. The situation affected commercial truck traffic, prompting U.S. Customs and Border Protection to suggest alternate routes.

WAREHOUSE TECH

AI POWERED FORKLIFTS AND ROBOTIC PICK SYSTEMS POWERED BY ADVANCED GRIPPING TECHNOLOGY

Say it ain’t so! Robots and AI seem to be determined to take over most of the roles and tasks in the warehouse, but we thought that the good old forklift drivers were safe. This past week, ArcBest, an Arkansas logistics company, has revealed the use of its AI forklifts, which are semi-autonomous and aim to increase efficiency by up to 80% while reducing damage.

Warehouse order pickers also got a rude awakening this week. Righthand Robotics has launched a unique solution for an autonomous piece-picking system: the RightPick 4 system. This will reduce human intervention in order fulfillment, including advanced “gripping” and smart grasp technologies for faster picking.

Staples, one of the biggest shopping centers in the country, is ready to embrace this vast change in automation as well. As part of its agreement with Righthand Robotics, Staples will deploy these AI-powered robotics in its fulfillment centers.

However, not everyone is fully embracing all the rampant logistics tech innovations. In California, the legislature is attempting to require human drivers behind AV trucks. Assembly Bill 2286 states that self-driving trucks weighing over 10,000 pounds should have a trained human operator.

Just imagine what the warehousing and logistics industry is going to look like in 10 years.

WAREHOUSE OPERATIONS

RETURNS RISE DESPITE STRICTER RETAILER POLICIES

Consumers just won’t budge on their appetite for returns. According to Blue Yonder's recent survey, despite vendors' tightening return policies, the number of consumers returning merchandise continues to rise. Even a massive 89% of retailers implementing stricter policies just isn’t putting a dent in lower the overall return rate.

Further substantiating the state of returns was a recent FedEx survey. Key findings indicate that almost half of all U.S. consumers expected to return more or the same amount of items during last year's holiday season as in previous years - and the trend will only continue. No-label/no-box return shipping is perceived as more convenient, straightforward, easier, and less stressful.

Retailers will have to continue to walk the tightrope of making consumers happy and reducing the overall impact of returns on the corporate bottom line.

SMALL PARCEL SHIPPING

UPS, FEDEX & USPS ARE DUKING IT OUT

It looks like more battles are brewing in small parcel shipping – and the heavyweights are duking it out. USPS is doing its’ best to compete with UPS and FedEx. The agency saw revenue grow 2.7% and volume increase 5.1% in its package division. In particular, the USPS Ground Advantage program seems to be taking off. The program consolidates three package options: Retail Ground, First-Class Package Service, and Parcel Select, offering fast delivery of packages up to 70 pounds in 2 to 5 days.

Not to be outdone, UPS is rolling out a Saturday home delivery service for Canada, starting in Toronto but with plans to expand to Montreal, Laval, Calgary, and Greater Vancouver in March. Another perk is there will be no extra cost for the service.

All of this competition seems to be bringing out the best in the carriers as well. UPS, FedEx, and USPS channeled a new level of delivery performance. According to the 2023 data that just poured in, UPS had a 98% on-time delivery performance, FedEx posted a 97.8% rating, and even USPS came in at 95.2. Let’s keep an eye out for what happens in 2024!

WAREHOUSE QUICK DELIVERIES

GROCERY STORES DOMINATE THE HEADLINES, SUBLEASES BALLOON, AND MORE…

• Online grocery sales grow in the first quarter of 2024

• Kroger and Albertsons merger will affect store prices for the better

• AI is coming to Kroger as it will use the technology in its marketplace

• Online grocer Misfits to offer third-party fulfillment services

• U.S. container volume jumps 7.9% in January 

• Subleases surge as warehouse space market contracts

• Warehouse rents are rising to new heights

• Store closing announcements rise sharply