Good day,
How can FedEx Corp. (NYSE:FDX) and UPS Inc. (NYSE:UPS) benefit from the U.S. Postal Service’s (USPS) pension-funding challenges? As many know, USPS sets aside about $5.5 billion a year to pre-fund employee retiree health benefit obligations. In a column in the financial weekly Barron’s, Allen Root writes that USPS must emphasize competitive parcel services with its first-class mail monopoly in secular decline. That puts it in more direct competition with FedEx and UPS. At the same time, USPS will continue to raise its competitive rates to offset higher costs, including those for future pension payments, Root says. This, in turn, will shrink the price gap between the three players. USPS’ competitive edge lies in its pricing, not in its service or the depth of its portfolio. If that advantage narrows or vanishes, USPS customers may see no reason to stay, he added.
Did you know:
Of the 14 seaports in real estate and logistics firm JLL Inc.’s (NYSE:JLL) “property clock,” which illustrates where each port market sits within its real estate cycle, 11 are “peaking.” Of those, Norfolk/Newport News is on the border between “peaking” and “growing.” The remaining three, Charleston, Jacksonville and Montreal, are in the “growing” quadrant. The clock indicates that industrial property around seaports are experiencing “landlord-favorable” conditions.
Quotable:
“Spoil me or else”
– Michael Zakkour of supply chain consultancy Tompkins International, distilling into four words the fickle consumer groupthink that retailers, e-tailers and their supply chain vendors must struggle to manage every day.
In other news:
Can CO2 become a KPI for freight?
It needs to be, says Suzanne Greene of MIT’s Center for Transportation and Logistics. The bad news is that carbon emissions from freight will double by 2050, making freight the most carbon-intensive sector by then. The good news is that processes, metrics and technologies are in place to measure performance and success, which may halt that grim march, she said. (GreenBiz)
New mobility makes its presence known at Denver Airport
The airport has shelved plans for more parking facilities, saying demand for spaces has been declining for several years even though passenger traffic is surging. (Denver Post)
Building talent to support Singapore’s supply chain and logistics industry
The city-state’s logistics needs are growing, and so is the need for qualified talent to support it. (HR Online)
Outsourcing logistics, supply chain services can boost start-up, SME profits
Logistics and Supply Chain is one such business function that is evolving as a service oriented competency, moving away from being a core function. (Entrepreneur)
Is anyone listening to global 3PLs?
In a rapidly changing maritime industry filled with data concerns and with mega-carriers expanding into their traditional realm of value-added services, are the needs of global freight forwarders and third-party logistics providers being given short shrift? To some, the issue isn’t the carriers’ product expansion but who will control the information flow in a blockchain-obsessed world. (The Loadstar)
Final thoughts:
When’s the last time you’ve had a box or boxes of Snackwells, Kit-Kats, Oreos or Cheerios delivered to your door? If the answer is “never,” then you’ve identified the biggest challenge facing consumer packaged goods manufacturers in the years ahead. In a world where eachies and onesies are increasingly commonplace, makers of CPG edibles still do all their fulfillment the traditional way – delivering pallets of product from factory to distribution center to retail store, but never directly to the consumer. Ask big food why they can’t broaden their fulfillment, and they’ll shrug their shoulders and say that it’s not that done way. Truth is that doing it another way will take a lot of heavy lifting. But at some point, they may have to. The alternative is to become another industry displaced by Smiley.
Hammer down everyone!