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This Week in Logistics News (April 27 – May 3)

I was hoping that my news roundup would lead off with a comment about Boston sports going two for two in the playoffs. After Wednesday night’s blowout of the Miami Heat, the Celtics won their opening round series and had me in a good spot. So it all rested on the shoulders of the Bruins, coming off a lackluster performance on Tuesday night where they could have wrapped up the series at home. Instead, they were on the road in Toronto with another chance to wrap up their series and move on to the second round. And once again, they came out flat, showing no sense of urgency. And even with Auston Matthews out for the second straight game, the Bruins could not take care of business. So now I wait until tomorrow night to see if Boston sports really went two for two. And now on to this week’s logistics news.

Amazon in the news:

Amazon’s Prime orders are getting delivered faster and faster
Hawaiian Airlines slowly adds freighters for Amazon business

Walmart in-store AI is giving employees advice on how to sell products
USPS delivery unit proposal sparks service, cost concerns for shipping partners
White House earmarks $1.5B in push for freight decarbonization
China e-commerce exports, unreliable Red Sea shipping boost air cargo
Sephora is expanding its take-back and refillables programs

Amazon announced that it delivered to Prime subscribers at its “fastest speed ever” in its quarterly earnings on Tuesday. The company reported that it delivered more than 2 billion items in a one-day window in the first three months of 2024. If it were to keep that pace, it would top 2023’s numbers, which Amazon previously said totaled 7 billion units delivered on the same day or the next day during the yearlong period. In March, the company said nearly 60 percent of the items ordered by Prime members in the top 60 US metro areas arrived the same day or the next. Major cities outside of the US, like London, Tokyo, and Toronto, saw three out of four of their items delivered in the same window. Amazon is also kicking it up a notch in the grocery war being waged by retail titans. Prime members are now being offered free delivery on grocery orders over $35 from stores like Whole Foods, Amazon Fresh, and more.

Hawaiian Airlines has commenced operating a second Airbus A330-300 cargo jet for Amazon on a new route between New York’s JFK airport and the company’s West Coast air logistics hub in San Bernardino, California, the company reported. Under a transportation services agreement that kicked in last year, Amazon leases the aircraft from a dealer and transfers them to Hawaiian Airlines to fly and provide routine maintenance. Hawaiian, which is branching out to all-cargo operations for the first time, began commercial revenue service for Amazon in early October on a route connecting San Bernardino with Amazon Air’s superhub at Cincinnati/Northern Kentucky International Airport (CVG). Amazon plans to acquire 10 A330 converted freighters as replacements for aging Boeing 767-200s operated by other partner airlines.

Produce goes bad and clothes go out of fashion fast, issues that add to the massive food and retail waste the world’s major retailers are on the hook to solve. Walmart thinks AI is part of the answer. The big-box giant is launching an in-store artificial intelligence to advise employees on everything from banana ripening to seasonal fashion that may need to be put on sale before it’s too late. The internally developed AI technology allows Walmart employees to scan produce like bananas to see how ripe the product is. Then, using generative AI, a digital dashboard will make a suggestion on what to do with the product, eliminating the need for human decision making in the absence of informed advice.

The U.S. Postal Service is considering changes to how it works with key shipping partners, a move experts say could challenge service levels and pressure delivery prices. The proposed changes would affect shipping consolidators, which handle and send customers’ parcels to Postal Service facilities for final-mile delivery, experts told Supply Chain Dive. These consolidators, including DHL eCommerce, OSM Worldwide and Pitney Bowes, play a large role in the delivery of USPS parcels, making shippers concerned that the potential changes could have wide-ranging impacts. Specifically, USPS has broached key partners to discuss which facility access points are used by shipping consolidators to enter volume into its network, and the negotiated rate discounts tied to that process. The Postal Service wants consolidators to drop off packages further upstream in its network, rather than drop off volume at destination delivery units, which are the last stop in the agency’s network before packages and mail reach their final address.

A step toward a zero-emissions freight sector includes adoption of zero-emissions vehicles. The initiative is allocating nearly $1.5 billion to increase use of these vehicles to transport freight as part of an overall effort to improve air quality. The largest piece of the president’s plan provides $1 billion through the Environmental Protection Agency to cities, states and tribes to replace Class 6 and Class 7 heavy duty vehicles including delivery trucks. The EPA funding also is meant to support development of charging and fueling infrastructure for zero-emissions vehicles. About $400 million of the $1 billion in EPA funds are earmarked for projects to aid communities with air and noise pollution mitigation. The Department of Transportation will provide $400 million to improve air quality and reduce pollution for truck drivers, port workers and people who live in communities surrounding ports.

Resurgent air cargo demand and rising rates, powered by the quasi-blockade of Red Sea shipping and continued growth in bookings by Chinese e-commerce platforms, during a normally slow shipping period is creating high expectations among air carriers for peak season and making logistics providers nervous about securing adequate capacity. Air cargo demand has grown by double digits for four consecutive months, while rates have risen steadily since late February. The strength of the market rebound after a prolonged downturn that bottomed out last August has surprised industry watchers. But the recovery is not lifting all regions equally and can be partly attributed to a weak 2023 that makes the comparison look better. Primary factors driving growth in air cargo are poor ocean shipping reliability and Chinese e-commerce players like fast fashion dynamo Shein, and online markets Temu and Alibaba sucking up outbound capacity from China.

Sephora, a leading name in the global beauty retail sector, is making strides in integrating sustainability into its business practices. Its commitment to sustainability shows up in its efforts around packaging recycling, through its Beauty (Re)Purposed program launched in May 2023, and refillable products — it launched a dedicated program in April 2019. Last year, in partnership with Pact Collective, Sephora launched Beauty (Re)Purposed in its U.S. and Canadian stores. The program allows consumers to dispose of their beauty product packaging at dedicated in-store stations to help divert it from landfills. Sephora accepts packaging from products by any brand as long as it meets Pact’s guidelines. The annual cost of Sephora’s Pact membership is $12,500 plus collection fees. The program is free to use for customers at select in-store locations. Sephora declined to comment on the financial impact of the program.

That’s all for this week. Enjoy the weekend and the song of the week, Song 2 by Blur.

The post This Week in Logistics News (April 27 – May 3) appeared first on Logistics Viewpoints.

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