Warehouse Wisdom. Weekly. 4/26/2024

Happy Friday!

Unfortunately, the longstanding proverb ‘April showers bring May flowers’ doesn’t look like an accurate forecast for the overall U.S. economy and the shipping and freight industry. A modest 1.6% growth in the first quarter U.S. GDP and what seems to be a persistent shipping downturn are putting a damper on hopes for May and summer growth.

And the rain keeps coming in this week’s news, as we'll be covering the freight industry's quest for zero emissions, a short lease for improved delivery performance for the USPS, new problems for the Dali ship owner, some not so good updates on warehouse jobs, and more. Hopefully the sun will start shining soon for the warehousing and freight world.

LOGISTICS VITALS

AMAZON WELCOMES 2,000 SELLERS DAILY

Amazon’s growth just won’t quit. According to a recent report, over 2,000 new sellers join Amazon daily! In fact, some of the data about new sellers might just amaze you:

• 5 Million – the number of new sellers Amazon has welcomed since 2018

• 40% - the percentage of new sellers originating from the U.S.

• Brazil - the fastest growing international market for new Amazon sellers

• 1% - the percentage of sellers that account for over 50% of all sales

• 35% - the percentage of sellers that get at least one order

No matter how many changes or fees come their way, sellers just can't resist Amazon's call.

FREIGHT AND SHIPPING

FREIGHT INDUSTRY STRIVES FOR ZERO-EMISSIONS WHILE TRUCK FREIGHT FACES 13-MONTH SLUMP

The U.S. government is back at it again, this time rolling out some big plans to cut carbon emissions in the nation's freight industry, including making electric truck charging stations the new norm and pushing for emission-free big rigs. This high-reaching initiative is tackling a hefty chunk of U.S. greenhouse gas emissions, putting pressure on companies to “green up” their supply chains. With transportation accounting for approximately 29% of national greenhouse gas emissions and freight shipment comprising about a third of that total, this initiative is hitting the gas pedal on emission reduction. The White House is even setting a national goal for a zero-emissions freight sector by 2030.

However, the overall trucking freight industry is not looking too hot, as truck freight volumes have been on a 13-month losing streak. The ATA For-Hire Truck Tonnage Index took a hit in March, decreasing by 1% compared to last year. And to boot, it's the second smallest figure during the last 13 months. The first quarter of 2024 also saw a 0.8% decline in the tonnage index. With the economic slowdown, lack of stimulus checks, and rising interest rates, the road ahead looks bumpy!

Speaking of bumpy, the head of USPS vows to improve delivery performance in struggling markets like Atlanta and Richmond, where delivery challenges have been dragging things down. At a Senate hearing, lawmakers grilled Postmaster General and CEO Louis DeJoy regarding shipping delays affecting their constituents and issues associated with the rollout of the agency's 10-year "Delivering for America" plan. Senator Jon Ossoff even gave DeJoy a deadline, saying he’s got weeks, not months, to fix this situation. So, it's time to shape up or ship out!

OCEAN FREIGHT

BALTIMORE PORT OPENS NEW CHANNEL AS DALI SHIP OWNER FACES NEGLIGENCE ACCUSATIONS

Another week, another update on the Baltimore Port. Baltimore officials are opening up a new, deeper channel for ships to access the city's port starting April 25. With a controlling depth of 35 feet, this channel is a game-changer, making it easier for ships to navigate through the port. The cleanup crews have also been working hard, clearing enough wreckage for commercially essential vessels to sail through. Ships will also require a Maryland pilot on board and two tugboats as they sail through this new channel. Baltimore is slowly getting back into business!

However, looks like someone’s in big trouble as the Dali ship owner who struck the Francis Scott Bride is being accused of negligence. The city of Baltimore is not messing around when they say the cargo ship was "clearly unseaworthy." Mayor Brandon Scott and the city council are pointing fingers at the owner of the container ship Dali, Grace Ocean Private, and its operator, Synergy Marine Group, for being "grossly and potentially criminally negligent." The companies also tried to cap their liabilities at $43.6 million. Still, Baltimore's mayor and city council are not having it, as the chaos resulted in the death of six workers and mayhem at the Port of Baltimore.

LOGISTICS JOBS

NEW OVERTIME PAY ELIGIBILITY, IKEA TO TEACH AI LITERACY, AND FRONTLINE LOGISTICS EMPLOYEES FEEL UNDERVALUED

The U.S. Department of Labor (DOL) is shaking things up with a new rule on overtime pay eligibility. Starting July 1, the minimum annual salary threshold will jump from $35,568 to $43,888. And by January 1, 2025, it'll be a whopping $58,656! This means millions of workers will now be eligible for overtime pay. The new threshold is 65% higher than the previous rule and just a smidge higher than what was proposed back in 2023. The threshold will be updated every three years based on current wage data. The new rule is a win for employees, but quite a significant jump in costs for employers.

While many companies are dreading the overtime rule changes, others are finding ways to leverage tech to improve the bottom line. Ikea just announced that it will be training 3,500 employees in AI literacy. The furniture giant hopes to ensure its employees harness AI's power while staying true to the company's values. Ikea plans to offer courses tailored to each employee's role, such as AI Fundamentals, for its 3,000-strong workforce. It looks like the future of furniture shopping has just gotten a little smarter.

Perhaps the overtime rules will give logistics workers a reason to be upbeat, because apparently, they aren’t overly thrilled about their jobs. According to the 2024 State of the Frontline Workforce Report - U.S. Logistics Edition, 60% of frontline logistics workers see their job as a long-term thing, but 40% have thought about quitting because they feel underpaid and undervalued. The top reason why workers are eyeing the exit door? You guessed it, low pay! Pay is a big deal, especially with inflation and rising living costs. It's also the main source of employee dissatisfaction.

ONLINE MARKETPLACES

AMAZON ROLLS OUT GROCERY DELIVERY SUBSCRIPTION AND TIKTOK FACES POSSIBLE BAN IN THE U.S.

After a successful test run in three cities, Amazon is rolling out its grocery delivery subscription nationwide. For just $9.99 a month, you can enjoy unlimited grocery delivery on orders over $35 from Amazon Fresh, Whole Foods Market, and local grocery stores. And that's not all! You also get access to other delivery options. Amazon is stepping up its game to compete with the likes of DoorDash and Uber Eats, who offer fast deliveries that even Amazon's speedy e-commerce system can't match. So, prepare your shopping lists because you’re in for a treat!

Looks like time may be running out for TikTok in the U.S. The White House just signed a measure giving them nine months to a year to sell the platform or face a ban. Lawmakers are worried about Chinese tech giant ByteDance using private user data for the Communist Party. TikTok claims to be all clean now, but who knows? If TikTok gets banned, it'll surely shake up the social media scene. However, with the possible ban looming, businesses are still capitalizing on TikTok's massive young audience. So, enjoy the show while it lasts, but start preparing those backup marketing channels just in case!

WAREHOUSE TECH

DRONES AND ROBOTS ARE TAKING OVER LOGISTICS

Get ready, West Valley residents! Amazon drones might be delivering packages to your doorstep by the end of 2024. Tolleson, Arizona, has been chosen as the first U.S. location to test out this high-tech delivery service. Amazon's new drone, the MK30, will be taking off from Amazon's same-day facility at 10601 W. Van Buren St. So, watch out for those flying robots!

And it’s becoming more apparent that robots are taking over online grocery warehouses. Quietly, behind the scenes, the big players have been amassing automation and technology for years to make ops easier and more efficient. From using robots to zoom around the grid and fetch customer’s order to using robotic arms to handle product flow, high tech warehouses can move at dizzying speed and precision. The investment in tech is working so well, that some companies are hoping to have robots handle a whopping 70% of inventory soon!

WAREHOUSE QUICK DELIVERIES

USPS SHIFTS AIR FREIGHT TO UPS, FEDEX CLOSES 4 SHIPPING CENTERS, AND MORE…

• USPS Plans to Migrate Air Freight to UPS Starting This Summer

• FedEx Shuts Down 4 Shipping Centers in Southwestern Florida

• Warehouse Rents Inch Down as Cooling Demand Leads to Higher Vacancies

• US-China Relations Become Tenser Amidst Trade War