Let’s be honest, we all love the convenience of Amazon. At the same time we love to hate the retail giant for a whole plethora of reasons. So when founder Jeff Bezos lost $16 billion of net worth on Friday when Amazon’s stock took a beating, we were somewhat gleeful. He will be just fine; his net worth is still over $180 billion. We cover Amazon news because the company is so intertwined with the supply chain and logistics. It would be a subject hard to ignore.
Amazon has been building a logistics empire that, by some measures, has surpassed UPS and FedEx. To reach deeper into rural America, the company is using hyper-efficient warehouses, contracted drivers, and mom-and-pop shops. The retail giant is expanding its one to two-day delivery capabilities throughout the country as it seeks to boost sales in less-populated regions. Amazon is ready to tackle rural regions after years of fine-tuning its logistics systems in more dense areas of the country. This is a direct challenge to the US Postal Service, which by law is mandated to deliver everywhere in the country.
It made more than 5 billion same-day or next-day deliveries so far this year, up more than 30% year over year and a company record. Amazon says it reached this goal by expanding its same-day delivery service to more than 120 metro areas in the U.S., shortening the distance deliveries had to travel by regionalizing its fulfillment network. The company also announced that it has developed an advanced AI model for its Just Walk Out checkout technology that makes the system more accurate, more efficient, and quicker to provide receipts to shoppers.
The U.S. Consumer Product Safety Commission has issued a decision and order against Amazon, determining the retailer was a “distributor” of products that are defective or fail to meet federal safety standards. Amazon distributed hundreds of thousands of hazardous products sold by third parties through their eCommerce platform and is responsible for recalling them, according to the ruling. Hard to sympathize with a company that changes the rules on its sellers all the time. It recently set an Oct. 19 deadline for third-party sellers’ inventory to reach its fulfillment centers to ensure Prime delivery speeds for the Black Friday ordering rush. That’s a week earlier than last year. Sellers who miss the inventory receiving deadline may have tough luck finding space at Amazon’s fulfillment centers.
Seven union activists with the Teamsters were handcuffed, detained and criminally charged while protesting outside an Amazon warehouse in Staten Island last month, as tensions between the eCommerce giant and the powerful union escalate.
The Latest In Freight
FedEx and UPS continue to offer shipping discounts to attract more customers, which has helped lower delivery rates despite climbing fuel surcharges. Nonetheless, UPS is first out of the gates in announcing surcharges for the coming peak season, and its plans are ominous for shippers. The 2024 peak gift delivery season from Thanksgiving to Christmas Eve has just 17 operating days versus the usual 20 or more days. Wall Street analysts and industry consultants doubt that seasonal demand will be strong enough to support UPS’s hikes and said customers could go elsewhere.
FedEx is taking steps to expand its FedEx International Connect Plus (FICP) service offering. FICP will now be made available for e-tailers to send shipments to United States and European destinations, and it is already currently available within Asia-Pacific markets. The company added that it will be made available to e-tailers in China, Hong Kong SAR, and Japan, with other Asia Pacific markets set to be added later in 2024. Both FedEx and UPS find that getting and paying parking ticket fines is a net gain for them.
Freight Continued
Norfolk Southern railroad has been causing chronic delays for Amtrak between New York and New Orleans by forcing the passenger trains to wait while its massive freight trains pass, the federal government said in a lawsuit. The Justice Department took the rare step of filing a lawsuit because it says Norfolk Southern is consistently violating the federal law that requires Amtrak’s trains to get priority when they cross a freight railroad’s tracks. Amtrak relies on tracks owned by one of the six major freight railroads across most of the country. Meanwhile, Norfolk Southern is making more than $200 million worth of capacity improvements on its line between Birmingham and Mobile, Ala., to support traffic growth at the Port of Mobile.
With labor negotiations at a standstill, a Canadian rail strike is likely to occur in late August. Canadian Pacific Kansas City (CPKC) and the Teamsters Canada Rail Conference are still talking but remain far apart on a new contract.
A coalition of trade groups, led by the Owner-Operator Independent Drivers Association, are urging House of Representatives leaders to pass the $755 million truck parking bill to expand truck parking across the nation. Maergo has ceased operations and is no longer providing parcel delivery services, software provider EasyPost, which gave shippers access to the carrier, said in an update. Maergo previously utilized existing carrier capacity to deliver parcels across the U.S. in one to three days. It had partnerships with all major U.S. passenger airlines for middle-mile package transport, along with last-mile partners.
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Shipping And More
The Port of Los Angeles is experiencing power issues as it follows California law and is transitioning from diesel to renewable energy to power operations. More U.S. manufacturers are rethinking their plans as they brace for an extended slump in demand. Fiverr, the outsourcing company, announced the acquisition of AutoDS, which provides a subscription-based end-to-end solution for dropshippers, including product research and sourcing, inventory management, and automated fulfillment.
Australia is jumping on the crowdshipping bus, modeling its program after the one created in Singapore. Crowdshipping, uses commuters to deliver parcels on their way to or from work when they are using public transportation. In a market with high demand for warehouse space innovation is helping industrial real estate operators find more storage room. Mezzanines are elevated platforms or levels that create additional usable floor space within the existing footprint of a warehouse. There are several types of mezzanines, including rack-supported, platform, and true multi-level buildings. One of the largest industrial real-estate developers in the U.S. plans to begin developing data centers as an artificial-intelligence boom drives demand for the specialized buildings. Panattoni Development has hired a partner, Adam Kramer, to lead a team that will build and operate data centers across North America.
Supply chain logistics company Stord purchased the fulfillment services operation of Pitney Bowes’ eCommerce division. Bargain site Temu has won over hundreds of millions of customers around the world with its rock-bottom-priced hairpins and pet toys. Some suppliers say consumers’ gains are coming at their expense.
After years of being told what to buy, TikTok users are trying something new: buying and using only what they need. They’re calling it “underconsumption core,” the latest move away from influencer culture. A major player in the buy now, pay later industry is urging the Consumer Financial Protection Bureau to develop regulations specific to BNPL to avoid confusing companies and consumers.
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