Good day,
The push to dominate the nascent e-grocery delivery business has, in some markets, spawned a “race to the bottom” that is hurting the bigger players and crushing smaller grocers, according to Enrique Dans, a professor at Spain’s International University. Writing in Forbes, Dans professes to be unclear as to the motive of the big e-tailers to lose money on every fresh grocery shipment other than it become a net positive for one of them to lose on every transaction in return for cornering the market because of its low price points. The damage is especially noticeable in markets like New York City, where Walmart unit Jet.com confirmed last week that it would stop deliveries on fresh products to focus on dry goods because it was losing $20 on each delivery. If Walmart can’t hack it, how does one expect local merchants to, according to Dans. “How does a neighborhood grocery store compete with establishments prepare to burn a $20 bill every time they get a delivery,” he asked.
Did you know?
FedEx Corp. plans to move a record 33 million packages globally on Cyber Monday, which this year falls on Dec. 2. The company also plans to more than double its average daily volume of 15 million packages over the subsequent two Mondays.
Quotable:
“It looks like an angry triangle.”
– A social media post describing the look of Tesla’s pick-up truck prototype
In the news:
Hot robotics
The International Federation of Robotics predicts that the global market for warehouse and logistics robots will nearly quadruple to more than $22 billion by 2022, up from $5.7 billion this year. It was $2.4 billion in 2017. (Investor’s Business Daily)
Amazon strikes deal with China’s No. 3 e-tailer
Amazon.com Inc. has opened a virtual storefront on Pinduoduo Inc., China’s third-largest online retailer after Alibaba Group Holding Ltd. and JD.com. This is an effort by Amazon to lure Chinese consumers into inexpensive purchases during the Black Friday (Nov. 29) online spree. The partnership extends to the end of the year. (Bloomberg)
Next stop: Milan!
Piaggio, the Italian company that makes the Vespa scooter, has developed a “stylish” design alternative to the basic grocery delivery robots (see photo above). The 50-pound beauty costs $3,250. (Fox Business News)
In logistics, ignorance is not bliss
Most people have no clue of the complexity, transport-intensity, environmental impact and social costs of modern supply chains – not just on the “last mile” but back to the raw material source. Greater public awareness of distribution systems could help to promote more sustainable consumption patterns. (The Guardian U.K.)
Rail worker leaves tracks, doesn’t get the sack
A judge upheld an arbitration award reinstating a Union Pacific Corp. worker who was fired after pooping on a train car connector and telling his boss he had left him a “present.” The judge, however, was puzzled that the bizarre behavior didn’t justify flushing the employee from the workforce. (Law360)
Final thoughts:
After two decades of being the automation force behind the success of the U.S. Postal Service’s “Priority Mail” program, Stamps.com earlier this year told USPS it was picking up its marbles to play elsewhere. In October, UPS Inc. became the new sandbox. The deal is significant, but not because Stamps’ 740,000 customers will receive very favorable shipping rates; UPS says customers will receive 55% discounts from published rates, but there may be more than a few exceptions depending on shipment size and dimension. The real story, and the prize for UPS, is the massive influx of small to midsize businesses (SMB) it can now market shipping and logistics services to. The SMB market is highly coveted because it commands much higher margins than large, high-volume customers, and they lack the in-house resources and expertise to manage a non-core function like supply chain management. This could be the gift that keeps on giving for UPS.
Hammer down everyone!