Warehouse Wisdom. Weekly. 5/10/2024

Happy Friday!

Let’s face it—even the best of us have days when things just don’t quite go according to plan. FedEx knows the feeling – this week, the company had a few large mishaps, such as a tornado sweeping the roof of a FedEx building in Portage, Michigan, and a FedEx 767F decided to land on its fuselage in Istanbul after a flight from Paris. Thankfully, no one was seriously injured. And hopefully, bad things don’t come in 3 for the company!

But for all those mothers out there, this Sunday should be a great day as we celebrate moms. Get ready to open those wallets because consumers are expected to drop $33.5 million this Mother’s Day, which could potentially be the second-highest spending spree in history!

So, as you start brainstorming those Mother’s Day gift ideas, let us catch you up with this week’s newsletter. We will update you on the delivery problems online buyers face, how brands are elevating their customer and seller experiences, how the truck freight market and transportation metrics experience big hits, some good news for warehouse workers, and more!

LOGISTICS VITALS

ONLINE BUYERS FACES DELIVERY PROBLEMS DESPITE ONLINE E-COMMERCE GROWTH

A recent Descartes study found that even with the rise of online buying, 67% of customers are still facing delivery problems. Let’s look at some of the numbers:

• 22% - Reported a delivery arrived much later than promised

• 21% - Reported a delivery arrived at a different time

• 17% - Said the delivery time offered was longer than they were happy with

• 15% - Had return problems

• 8% - Had a frustrating return experience with a retailer/delivery agent

• 7% - Gave up the attempt to return goods

• 23% - Lost trust in the delivery company

• 6% - Said they would avoid retailers that use the delivery company in the future

Retailers and delivery companies should take note of these findings in order to provide top-notch home delivery experiences if they want to keep this growing group of online shoppers happy.

ONLINE MARKETPLACES

SPEEDY DELIVERIES ARE A KEY TO BOOSTING CONVERSION RATES

Brands that offer speedy delivery options like same-day or next-day delivery are killing it! A study by Jitsu and Coresight Research found that “fast delivery times” lead to a 10.5% increase in conversion rates and an 8.9% boost in repeat purchases. On the flip side, 45% of consumers won't buy if delivery is slow. And if the delivery cost is too high, two-thirds of consumers are out.

So, it should come as no surprise that Etsy has just pushed out AI machine learning models to improve delivery dates – a good sign if you sell on Etsy. With this AI machine learning model, they slashed estimates for USPS transit times by over a day. Now, Etsy can show estimated delivery dates for nearly three times more eligible orders within seven days. CEO Josh Silverman is confident this will boost buyer certainty in their reliability and boost sales.

But just make sure you don’t go overboard with marketing communications! A report from Optimove revealed that 81% of people actually unsubscribe when brand marketing becomes “obsessive.” And get this: 55% of consumers are begging for less spam from the brands they actually signed up to hear from. Can you really blame them?

Instead of sending all those “stalker” emails, perhaps it’s time to start looking at the growing possibilities of full-funnel ads in shoppable TV formats that Amazon is introducing. Amazon has three new cool ad formats for Prime Video, which help viewers connect and shop with brands easily. The new ad formats are shoppable carousel ads, interactive pause ads, and interactive brand trivia ads. So, get ready for growing sales while watching TV!

Any in your brief Amazon FBA news for the week, it looks like they are giving even more time for sellers to get used to their new low inventory fees, as well as a few ongoing breaks for sellers in certain situations. The fee applies to standard-sized products with less than 28 days of inventory relative to historical demand. Amazon started crediting sellers in April if they incurred the charge but extended the credit period until May 14. This gives sellers more time to avoid the fee entirely and receive the credit by May 31.

FREIGHT & SHIPPING

TRUCK FREIGHT MARKET AND TRANSPORTATION METRICS TAKE BIG HITS

According to the latest U.S. Bank Freight Payment Index, the U.S. truck freight market took a big hit in the first quarter of 2024. Spending by shippers dropped 27.9% compared to last year and 16.8% from the fourth quarter of 2023. Shipments also took a hit, down 21.6% from last year and 7.8% from the previous quarter. Regional data also showed that everyone was feeling the pain, except maybe the Southwest, which saw a slight increase in volume.

But could there be a boom by year’s end? According to the monthly Logistics Managers’ Index (LMI), respondents expect significant improvement within 12 months. So, despite being stuck in this freight recession for now, things are bound to improve.

LOGISTICS JOBS

WAREHOUSE WORKER PROTECTION ACT INTRODUCED, WHILE RAIL WORKER LOCKOUT THREATENS CANADIAN ECONOMY

It looks like speed quotas and heavy scrutiny of warehouse workers may be out the window, while national ergonomic standards may be moving in, thanks to new legislation, The Warehouse Worker Protection Act. According to Senator Ed. J. Markey, this bill will protect warehouse workers from “corporate greed”.

And what happens if more than 9,000 Canadian rail workers are off the job soon? Damage to the entire country’s economy. The Teamsters Canada Rail Conference (TCRC), representing rail workers such as conductors and engineers, is planning a lockout on May 22 that could affect both major railways, which are the Canadian National (CN) and Canadian Pacific Kansas City (CPKC). President Paul Boucher warned of major supply chain disruptions due to the simultaneous strike at both railways. After six months of negotiations, no progress has been made, with both companies trying to strip safety provisions from collective agreements.

SUPPLY CHAIN OPERATIONS

MEXICO REMAINS NO.1 TRADE PARTNER OF THE U.S. FOR THE THIRD CONSECUTIVE MONTH

Mexico really knows how to trade with the U.S., as the country remains our top trading partner in March, with $68.5 billion in two-way trade. This marks the third month in a row and the 13th month out of the past 14 where Mexico has taken the crown. In the first quarter of 2024, trade between Mexico and the U.S. totaled a cool $200.1 billion, a 1.7% increase from the year before. It looks like Mexico and the U.S. are becoming besties when it comes to trade!

WAREHOUSE TECH

EVS AND ZERO-EMISSION TRUCKS KEEP MOVING DESPITE HIGHER COSTS THAN DIESEL

Companies are finding that the cost of running electric trucks is double or more than that of diesel trucks. Ryder System executives spent years hearing customers talk about wanting electric big rigs, but now that they're here, no one wants to pay for them. It shows that pushing truckers to switch from diesel to electric is no easy task. Right now, electric trucks cost a fortune to buy and cost significantly more to operate than diesel rigs, making them a tough sell in a freight industry that's all about saving money.

Nonetheless, Amazon is moving forward with deploying 50 EV trucks in SoCal as California continues its path to moving towards banning new diesel trucks in 2035. This move is part of their plan to clean up delivery from start to finish. These electric trucks will be hauling cargo and packages, adding to the electric vans already cruising around the state. All this eco-friendly driving is expected to cover over 1 million miles a year without any emissions. It should be interesting to see if the costs of ownership for businesses skyrocket because of the above.

Despite cost concerns, companies are taking the next step in the evolution of EV by combining it with AI (wow, that’s confusing) to create autonomous and zero-emission trucks. Daimler Truck has added autonomous driving technology to its Class 8 electric eCascadia, creating a demo that looks into future markets for driverless trucks and the reality of phasing out diesel fuel. The company plans to use the demo to see how motion control in an electric truck compares to a diesel engine and if autonomy affects the driving range. Time to see if these trucks can drive themselves without running out of juice! By 2039, the company aims to have only zero-emissions trucks in its major markets.

And all this talk about EVs is increasing the need for charging stations, as demand seems to be outpacing supply. A recent study by ChargePoint and CBRE shows the need for more EV charging stations at work. Rich Mohr says they need to make charging accessible wherever drivers need it. EV drivers like to top off their vehicles more often than regular drivers, so having chargers at work is a big advantage, especially for those with long commutes.

WAREHOUSE QUICK DELIVERIES

FEDEX FREIGHT TO CLOSE SEVEN CENTERS, DEMOLITION PLANS FOR BALTIMORE BRIDE, AND TIKTOK SUES U.S. GOVERNMENT, AND MORE…

• FedEx Freight to Close Seven Service Centers across the U.S. this 2024

• Final Victim Recovered and Demolition Plans Underway for Baltimore Bridge

• TikTok Sues U.S. Government to Block Ban

• Long Beach Cargo Up for Eighth Straight Month