Robots are everywhere these days, but sometimes it still takes a little while for people to get used to them. Warehouse automation is one area where robots have become the norm, with autonomous bots roaming aisles, toting boxes, and getting closer to picking and packing individual items. We have also seen autonomous bots on our sidewalks, college campuses, and public ways, most notably those from Starship, delivering packages to homes and apartments around the world. And now, restaurants have begun to employ robots as well. Kernel, a New York City startup from Chipotle Mexican Grill founder Steve Ells, uses a robotic arm to flip plant-based burger patties and a conveyor belt to move dishes along the assembly line. Humans put on the finishing touches and package the meals for customers to pick up. Customers were initially confused by the bot, so Ells closed the restaurant for a few days to add clues like seating, pictures, warmer colors and softer lighting to help signal that it actually serves food. But restaurants face tough challenges in automating kitchens, and efforts so far have been halting. Food is soft and sometimes slippery, requiring dexterity beyond the abilities of most of today’s commonly used robots. But it is still fun to watch what these restaurants are doing. And now on to this week’s logistics news.
Walmart, Instacart promotions boost delivery sales
85% of back-to-school buyers plan to shop Prime Day
Powerful cartel in full control of Mexican port
Regulators nervous about rail freight decline
US import prices flat in June
Report finds opportunities, obstacles for electric vehicles
Royal Mail will deliver letters forever, vows buyer
Online grocery sales reached $7.7 billion in June, up 8 percent year over year for the month, with delivery surging, ship-to-home sales showing strong results, and pickup sales holding steady relative to last year, according to the Brick Meets Click/Mercatus Grocery Shopper Survey. The delivery category jumped to $2.9 billion for the month, rising 18 percent over the same period last year. That’s due to surges in active monthly users and increased order activity. Despite the increase, the value of orders dipped. Delivery gained 325 basis points to capture 38 percent of online sales in June. Meanwhile, the pickup category remained the share leader despite dipping 352 basis points for the month compared to a year ago. The report noted that order frequency and average order volume dipped, offsetting an increased monthly average user base. Overall, online grocery sales’ monthly active user base was up nearly 4 percent year over year, a result of reactivating lapsed users, according to the report.
Amazon Prime Day began on Tuesday, July 16, and ran through July 17. And while the numbers are not official yet, sales are expected to be down from last year’s record highs. According to an early July survey of over 7,500 consumers by the National Retail Federation and Prosper Insights & Analytics, 85 percent of back-to-school buyers planned to shop Prime Day. This year’s NRF report expects that back-to-school spending will decline slightly from last year’s highs, reaching $86.6 billion for college students and $38.8 billion for K-12 students. The projected numbers would be the second highest on record, though lower than last year, during which the NRF predicted that shoppers would spend $41.5 billion for K-12 students and $94 billion for college students. Households with K-12 students plan to spend an average of $874.68, a decline from last year’s record of $890.07. Households with college students anticipate spending $1,364.75, about the same as last year’s $1,366.95, per the survey results.
Port issues are constantly in the news, from strikes to congestion. At least in the US. In Mexico, there are other factors at play. The powerful Sinaloa Cartel is in full control of a Mexican port as shipping drug seizures spike. Ports are a “critical part” of the criminal infrastructure of one of the most powerful cartels, the Sinaloa, which uses them to receive precursor chemicals and South American cocaine for trafficking into the US, according to a May report by the US Drug Enforcement Agency (DEA). The reported increase in seizures at west coast ports was likely linked to this Latin American drugs trade, said the NorthStandard Mexico correspondent. The alert comes after violence linked to Mexico’s organized crime gangs has worsened over the last five years with Sinaloa and other major cartels competing with smaller rivals for the lucrative trade.
Federal regulators are summoning executives from the major freight railroads to a rare public hearing to explain how their companies plan to invest in and grow their business amid concern over recent negative volume trends. In a notice published last Friday, the Surface Transportation Board, which regulates railroad rates and service, said it also welcomes railroad customers, suppliers and rail labor to testify during the two-day hearing on Sept. 16 and 17 at STB headquarters in Washington, D.C. “The board has an interest in the health and growth of the industry and the need for rail customers to move their goods efficiently and reliably,” the notice states. “While the board recognizes that some shifts in volume may not be primarily within the control of rail carriers, the board has observed that over the past ten years carload volumes have not grown, and have in fact decreased.” To back its assertion, the STB pointed to a recent report published by the Federal Reserve of St. Louis showing railroad carload traffic declining 28% from May 2014 to May 2024.
U.S. import prices were unchanged in June as lower prices for energy products offset a rebound in the cost of food, the Bureau of Labor Statistics said on Tuesday. The flat reading in import prices followed a 0.2 percent drop in May. Economists polled by Reuters had expected import prices, which exclude tariffs, to dip 0.1 percent. In the 12 months through June, import prices increased 1.6 percent. That followed a 1.4 percent advance in May. Moderate import prices supported views that inflation was on a downward path and could provide the Federal Reserve room to cut interest rates in September. Government data last week showed consumer prices fell in June for the first time in four years. Producer prices rose last month, but details of the reports were much more benign. Imported fuel prices dropped 1.0 percent after rising 0.4 percent in May. Crude petroleum and natural gas prices both declined. The cost of imported food increased 0.7 percent after dropping 1.6 percent in May.
The trucking industry is seeing increasing opportunities to deploy electric vehicles despite obstacles that still must be overcome, according to a report July 9. The North American Council for Freight Efficiency and RMI documented the commercial operation of 22 battery-electric vehicles for three weeks last September. The vehicles came from several fleets and ranged from Class 2b through Class 8. The “Run on Less — Electric DEPOT: Scaling BEVs in the Real World” report that followed found that electric vans, trucks and heavy-duty tractors are being deployed across many different duty cycles. The report highlighted several factors to determine whether lower-emission vehicles fall into an optimum duty cycle sweet spot. Those factors include freight payload, range and type of power source. Battery-electric, for instance, has an optimum duty cycle that has a limited range of 250 miles and 43,000 pounds of freight.
And finally, the prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service. “As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC. Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board. Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.
That’s all for this week. Enjoy the weekend and the song of the week, Mr. Roboto by Styx.
The post This Week in Logistics News (July 13 – 19) appeared first on Logistics Viewpoints.