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Amazon Orders 20,000 Mercedes-Benz Sprinter Vans for New Last Mile Delivery Program

Last-Mile Delivery Services

When e-commerce powerhouse Amazon announced in late June it was rolling out its Delivery Service Program, in an effort to increase its package delivery and logistics service capabilities that it said will enable entrepreneurs to set up their own businesses to deliver Amazon packages, it drew a lot of attention, as it typically does, and interest.

That interest was renewed recently, with the company announcing it has ordered 20,000 Mercedes-Benz Sprinter vans to be deployed for the new package delivery offering.

A report in the Seattle Times said this order is more than four times higher than what Amazon initially anticipated this summer, adding that these vehicles will be used for last-mile delivery services, which Amazon often has UPS, FedEx, the United States Postal Service, and contractors do for them.

But the report explained that Amazon’s initial expectation of ordering 4,500 vans was pushed higher as it received 10,000 applicants for the delivery program and resulted in a higher order number.

As previously reported in Logistics Management, an owner of an Amazon package delivery franchise can earn up to $300,00 in annual profit, with startup costs starting at $10,000, through operating a fleet up to 40 delivery vehicles.

What’s more, it added that owners will be able to leverage delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.

And they will also have access to various “exclusively negotiated discounts” on resources for a delivery business, including branded uniforms, fuel, and comprehensive insurance coverage, among other options.

Looking to the future, Amazon explained it wants to bring in hundreds of in-house delivery partners that would, in turn, hire tens of thousands of U.S.-based delivery carriers, whom would work in tandem with the company’s existing base of traditional carriers, in addition to small-and-medium-sized businesses that currently staff thousands of drivers delivering Amazon packages.

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” said Dave Clark, Amazon’s senior vice president of worldwide operations, in a statement made in late June.

“Customer demand is higher than ever and we have a need to build more capacity. As we evaluated how to support our growth, we went back to our roots to share the opportunity with small-and-medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

When Amazon initially introduced its delivery service program, a Wall Street Journal article noted that this move is viewed as another push by Amazon to gain more control over its own deliveries in a “continued quest” to build a vast freight and parcel shipping network.

What’s more, it added that Amazon has said it needs to expand its internal delivery service offerings to keep up with the number of orders made online that UPS, FedEx and the United States Postal Service cannot.

Dave Clark, Amazon’s senior vice president of worldwide operations

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow”Dave Clark, SVP, Amazon Worldwide Operations

And taking that a step further, the report, citing analyst estimates, pointed out that orders made via Amazon.com account for more than $4 or every $10 spent online in the United States, with 2017 deliveries topping 1 billion.

“It’s an incredible buy for vehicles that amazon will lease out to owner-operator firms, much like Fedex Ground, FedEx Home Delivery, Airborne Express, and others have done at some point,” said Jerry Hempstead, president of parcel consultancy Hempstead Consulting.

“Buying that many gets them purchasing leverage to get the cost down per unit and control over the brand image. The drivers of the vehicles, however, are not Amazon employees. In light of the financial woes of the USPS, Amazon is just taking care of Amazon.”

Rob Taylor, co-founder and CEO of Austin, Texas-based Convey, a cloud-based technology provider that helps shippers connect disparate data and processes from parcel to freight and first to last mile, said this announcement lends further credence to the ongoing emergence of last-mile logistics.

“If this news confirms anything it’s the immense volume of untapped latent final mile capacity in the market that isn’t part of mainstream delivery and logistics networks,” Taylor said.

“Amazon has been clever to identify and unlock this potential. It remains to be seen how quickly and effectively their delivery service partner program begins to show results for its various stakeholders, financially and otherwise.”

Related Article: Real-time Management from Warehouse to Logistics Fleets

Real-time Management from Warehouse to Logistics Fleets

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Kuehne + Nagel Deploys Blockchain Technology for VGM Portal and Container Weighing Requirements

Kuehne + Nagel for the first time leverages the benefits of blockchain technology in a large scale operational environment with 800,000 transactions per month while upgrading its well-established Verified Gross Mass (VGM) Portal.

The enhanced solution provides shippers with new features that improve the ease of doing business as well as the degree of transparency on the VGM status of all customer shipments and the history of persisted information.

All information submitted via the portal is stored on-chain, which allows for using native blockchain interfaces for data exchange with third parties, removing the need for additional off-chain communication channels.

Kuehne + Nagel designed the solution to strictly fulfil industry requirements of confidentiality and data privacy, adding to blockchain’s natural features of immutability and traceability.

Martin Kolbe, Chief Information Officer Kuehne + Nagel International AG said:

“The list of promises related to the use of blockchain in the logistics industry is long, but actual real-world applications are hard to find. The Kuehne + Nagel VGM Portal solution jointly developed by our seafreight experts and our IT team allows us to get a true hands-on experience with blockchain technology in an on-premise production environment and with a high number of transactions. Our customers benefit from a tamper-proof solution for information exchange with third parties with improved efficiency and higher transparency. Kuehne + Nagel engages in a number of blockchain projects with customers, suppliers and governmental bodies addressing industry challenges in various domains, as the full potential of blockchain can only be exploited when collaboratively working together with business partners. Our involvement in a consortium engaged in the digitalisation of bill of ladings for seafreight is the best example. Operating the VGM Portal on blockchain in an operational high volume environment delivers valuable learnings and expertise for the development of joint blockchain applications.”

The first version of the Kuehne + Nagel VGM Portal went live in 2016 to give shippers a convenient solution for filing their VGM declarations as being required for seafreight shipments in consequence of the International Convention for the Safety of Life at Sea (SOLAS).

Now, the use of blockchain technology further facilitates data exchange between the different partners.

FreightWaves reported that the International Maritime Organisation, the main regulatory body for shipping, introduced VGM just over two years ago. The rule requires that the weight of loaded containers must be verified before being placed on a ship.

It was put into effect after several marine accidents were believed to have stemmed from mislabeled container weights and cargo shifting during voyages.

In 2013, the Mitsui O.S.K. Lines-owned MOL Comfort suffered a crack that eventually led to a fire and the ship’s sinking, along with the loss of over 4,000 containers. Container weights were said to have been a factor in the casualty.

Related: How Will Blockchain Ledger Technology Impact Shippers?

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Why Blockchain will Create Extreme Supply Chain Management Optimization
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How Blockchain will Aid Retailers & Shippers in Achieving Omnichannel Supply Chain Goals
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Top Supply Chain Challenges for Manufacturing Companies

The variety of products available through a growing number of distribution channels is truly amazing. Competition between brick and mortar and e-commerce retail channels, often within the same company, has led to a proliferation of products and services.

In fact, on a recent trip to a Nike store I explored the NIKEiD program they launched a few years ago that allows customers to customize their footwear. Once configured, your customized shoes are produced and delivered to your house in a matter of a couple of weeks.) I can’t wait to receive my Michigan State themed shoes – GO GREEN, GO WHITE.)

Delivery of ‘make to stock’ products to a home or business is now available within hours of making a purchase. A growing number of connected, smart devices that have the capability to anticipate the need for a product are available for purchase.

Consider the smart refrigerator that orders a gallon of milk based on the quantity of milk in the refrigerator and its average consumption. Consider the smart printer that orders replacement ink cartridges based on amount of ink remaining and an average use rate.

Furthermore, 3-D printers are becoming more common allowing companies and consumers to make their own products on-site. What’s next? Products beamed right into your house. Beam me up Scotty!!

Back to reality, today’s manufacturers face a long list of difficult supply chain challenges including increasing demand variability, inventory proliferation, manufacturing capacity constraints, increasing risks both nature and human based, more environmental compliance regulations, intense global competition, increasing customer expectations and a shortage of talent.

To survive in today’s highly competitive global environment, manufacturers need to piece together the many parts of the supply chain puzzle to lay the foundation for more mature capabilities in the future.

An estimated, 75% of available supply chain data originates from outside the ERP system. Complexity opens risks of miscommunication and disruptions, often from incorrect or incomplete data.

Clean and consistent data is required to harness the power of investments in analytics, digitization, optimization, machine learning, big data and other advanced supply chain capabilities. A supply chain Master Data Management (MDM) solution provides consistent, harmonized, standardized and actively managed data from across the extended supply chain.

Accurate demand forecasts lay the foundation for an effective supply chain. With greater forecast accuracy comes greater predictability ensuring downstream supply chain processes run smoother at less cost.

To be successful at demand planning requires an in-depth knowledge of your business, experience forecasting your products, and an advanced demand planning solution. Demand planning solutions use science to automatically apply a variety of forecasting methods in an unbiased way to create forecasts for all stages of a product’s life cycle.

Manufacturing facilities are pressed by market demand to provide greater product variety and shorter delivery times. Shifting to production lines that are more flexible and closer to customer demand helps produce a greater variety of products with shorter lead times with smaller batch sizes and more frequent change overs.

However, multi-plant sourcing and scheduling increases complexity and the need for enabling technology to develop an integrated plan for both aggregated levels of production and site level production to meet customer orders.

Eliminating excess and obsolete inventory is a priority for many manufacturers. Effective inventory reductions are best achieved by synchronizing demand forecasts, inventory quantities, and supply capacity throughout the extended enterprise. Multi-echelon inventory optimization replaces rules of thumb with science to optimize where and how much inventory should be held across the extended supply chain.

Many manufacturers find it extremely challenging to align supply capacity to variable demand, while meeting corporate objectives. Marketshare can be won or lost based on how well a company predicts and reacts to demand shifts. A well run Integrated Business Planning (IBP) process supported by an advanced IBP solution can mean the difference between success and failure. Companies that take a spreadsheet driven approach spend too much time manipulating data and not enough on value-adding activities.

Manufacturing supply chains have many moving parts, each with their own challenges and potentially conflicting objectives. Only a scalable, interoperable supply chain planning and optimization platform can ensure a company’s supply chain performance is optimized.

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Five Steps to Transform Your Consumer Goods Supply Chain

 

Today’s modern supply chains are multi-enterprise, starting with consumers, retailers, distributors; and flowing through an extended network of suppliers, contract manufacturers, and other third parties.

Successfully managing such supply chains requires visibility, planning, and execution across all trading partners.

Here are 5 steps to transform your extended supply chain into a competitive advantage:

1. Look beyond the enterprise and adopt analytics that uses real-time data

While traditional planning applications are restricted to mostly historical data from within the enterprise, current data from the extended supply chain – from retailers or distributors – contains critical information. Use it.

2. Automated algorithms are here to help

Automated algorithms enable the next step in supply chain performance through the systematic analysis of large amounts of data. It, therefore, frees professionals from mundane, low-value activities to focus on more strategic areas such as planning promotions or inventory policy decisions. Leverage technology to do more.

3. Connect logistics to S&OP

Finished goods are planned weeks or even months in advance yet shippers are the last to know, often finding out as orders cross their desks.

As a result, logistics is stuck in reactive mode, scrambling to secure capacity each day. New transportation forecasting algorithms can now predict logistics requirements that are synchronized with S&OP to ensure that everyone executes against the same plan.

4. Create healthy inventory across the entire supply chain

Managing inventory to support the business’ growth requires the simultaneous optimization of all echelons of the extended supply chain.

Removing unproductive inventory across the value chain frees millions in cash to invest in other parts of the business and lowers operating expenses by having the right product in the right place the first time.

5. Better serve customers by accurately sensing demand and connecting it to a timely supply response

Linking real-time demand with a timely supply response allows companies to commit with confidence and profitably capture growth opportunities in today’s volatile markets.

If your company is not already working on leveraging its extended supply chain, the time is now.

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Truck Drivers Wanted at Walmart – $1,500 Referral Bonus

As reported by Bloomberg, Walmart, whose private fleet of 6,500 trucks is one of the largest in the nation, will offer referral bonuses of up to $1,500, shorten the on-boarding process for new hires by more than a month and broadcast its first national TV ad focused on its 7,500 truckers (see video to the right >>).

The program, which coincides with National Truck Driver Appreciation Week, September 9-15, 2018, aims to fill vacancies and improve the image of long-haul driving as a career amid a tight labor market.

“To be candid, right now I could hire a few hundred drivers,” Tracy Rosser, Walmart’s senior vice president of transportation, said in an interview. “It is getting tougher and tougher to find qualified drivers. It’s a really serious situation right now.”

Read: How a Trucking Shortage Is Fueling U.S. Inflation: QuickTake

The dearth of drivers swelled to a record 296,311 in the second quarter, according to researcher FTR Transportation Intelligence.

Combine that with wage hikes, rising diesel-fuel prices and higher freight demand, and the result was that June saw the biggest monthly uptick in long-distance trucking costs in nearly a decade.

Those expenses have crimped Walmart’s profit margins for three straight quarters, one reason why its shares are down so far this year amid broader gains in the stock market.

A Big Deal

Truckers are a big deal for Walmart – indeed, its path to retail dominance was plowed by its drivers.

Founder Sam Walton began building his own private truck fleet in the 1970s after large trucking companies declined to deliver to Walmart’s mostly rural stores, located far from established trucking routes.

Walton would show up at the drivers’ break room at 4 a.m. with doughnuts and talk to them for hours to get a fresh view of how his stores were faring.

Today, Walmart’s truckers take goods from massive distribution centers around the nation and deliver them to its 4,700 stores in a hub-and-spoke system that allows it to replenish goods quickly.

Two of Walmart’s past CEOs, Lee Scott and Mike Duke, rose up through its transportation department, and current CEO Doug McMillon spent his first day on the job doing a ride-along in a Walmart truck.

Rising Turnover

Walmart only enlists seasoned drivers – with at least 30 months experience over the prior three years – and new hires can earn about $86,000 a year with as many as 21 paid vacation days. That, Rosser said, has kept driver turnover as low as 7 percent historically.

This compares with a turnover rate that hovers around 90 percent for long-haul truckers, with more than a third of new hires leaving after three months, according to the American Trucking Associations and driver-retention consultants Stay Metrics.

But Walmart’s turnover has risen slightly in recent months, Rosser said, amid cutthroat competition for drivers. Some carriers have boosted wages as many as three times over the past year and are handing out signing bonuses of as much as $10,000.

The average age of a Walmart driver is 55, so the company is also losing many to retirement.

Over the next decade, the trucking industry will need to hire roughly 898,000 new drivers, or an average of nearly 90,000 per year.

Related: ‘Smokey and the Bandit’ Charm Fades as Trucking Hiring Lags

To fill the gap, Walmart is hiring nontraditional drivers like Aurelia Yoho, 44, a black mother of two from Chicago’s South Side who joined in 2016 after a stint in the Army and four years driving trucks for other carriers.

She hauls loads five days a week from Walmart’s distribution center in Woodland, Pennsylvania, going as far north as Vermont or down through the Carolinas.

She thought Walmart would never respond to her application, but once she came on board she has “kept the left door closed,” which is trucker jargon for working long and hard.

Still, she found the hiring process “tedious,” so Walmart’s Rosser said he wants to reduce that time from 70 days to 30, and pilot programs to do that are underway in Indianapolis and the company’s hometown of Bentonville, Arkansas.

Walmart will also boost its marketing spending, spread across billboards, satellite radio and a new TV spot, set to the tune of Chris Stapleton’s country hit “Traveller,” that features drivers who are noticeably not 50-something white men.

“Trucking is not just a job, it’s a lifestyle – but it does not work for everyone,” said Gary Mars, a 15-year veteran of Walmart’s fleet.

“Quite honestly, nobody wants to drive a truck anymore. But we have to have ’em. Without trucks, America stops.”

Source: Bloomberg

Related Article: Is There A Way To Better Manage Truck Driver Behavior?

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Gaining Supply Chain Efficiency With Artificial Intelligence

Supply Chain & Artificial intelligence

Artificial intelligence (AI) will change the way you think about your supply chain and supply chain efficiency.

Today’s supply chain complexities demand additional support.

You cannot afford to pass up on automating at least some of the processes.

And no, you don’t have to have robots replacing all your human workers at your facility.

AI goes beyond just robots to include automated processes in computers and more.

Implementing AI in your supply chain will make your life easier and your business more streamlined.

Increased Supply Chain Efficiency Means Maintenance Made Easy

Maintaining your equipment requires regular repairs and upkeep. But what if there was a way to know exactly when to conduct those tasks? You’d save money while cutting downtime.

The secret behind this lies in automating data collection through Industry 4.0 to automate the process.

Artificial intelligence collects information from sensors on equipment, which combines with maintenance records.

The system analyzes the information to predict the best time to repair your equipment, which is called predictive maintenance. And it could boost your productivity by 20 percent and cut maintenance costs by 10 percent.

Manage Your Warehouse Painlessly

The most familiar AI examples in industrial settings are warehouse robots that automatically pull products from shelves for shipping. This use of AI helps protect human workers from the dangerous tasks around a warehouse.

It also improves accuracy and safety in the warehouse. Smart robots can avoid obstacles like people and shelving for easier maneuvering when retrieving or storing products.

With AI, you can control multiple pieces of equipment in your facility from a single panel, which lessens the need for numerous low-skilled laborers. Though AI can replace some low-skill tasks, it cannot replace all jobs, such as supply chain managers.

Predictions claim job openings for supply chain managers could outnumber prospective employees by a ratio of six to one.

The good news is that your job as a supply chain manager is safe, but your task will change to integrate controlling AI and analyzing data from a smart warehouse.

Improve Inventory

One of the hardest aspects of being a supply chain manager is predicting what to keep in stock. When two large auto suppliers used AI to predict how much stock they’d need, they decreased inventory by up to 40 percent. Cutting needless inventory is the best means of freeing up space in your warehouse for stocking more products you sell.

Read: 8 Fundamentals for Achieving Artificial Intelligence Success in the Supply Chain

Predictive modeling uses AI to examine consumer trends and help you identify which products to stock. You can reduce revenue losses from not having the right products immediately available up to 65 percent. Predictive modeling can also cut forecasting errors by anywhere from 20 to 50 percent.

There are too many variables at play for humans to accurately predict the appropriate inventory levels in real time. AI can solve these inaccuracies, making your facility more efficient.

Keep Track of Suppliers

To ease your job and improve supply chain efficiency, you need constant communications with your suppliers. Artificial intelligence allows for synchronization throughout the supply chain. You can send information about predicted customer demand down the line, so you suppliers produce just enough to avoid overproduction waste.

Thanks to synchronous supply chain planning, you and your suppliers can make decisions in real time. A restaurant took advantage of AI in its supply chain, and the facility cut excess supplies and became more efficient and flexible.

Connectivity of devices and sharing data is critical to AI use in a supply chain. While this connectivity allows equipment to send information about production back and forth, it can also be useful throughout the supply chain. You can store the information you collected through AI in the cloud for others in the supply chain to access.

When inventory levels drop, the AI monitoring those can automatically signal a supplier to send more.

Smarten Your Shipping

Shipping also becomes smarter thanks to AI. Though driverless cars are still in testing mode, they could become the norm in the future. Additionally, AI can make more accurate predictions about shipping times.

TransVoyant uses machine-learning artificial intelligence to account for weather, natural disasters, road conditions and more to make accurate arrival times for shipments.

With machine-predicted shipment times, you can more accurately stage your warehouse to receive shipments at a given time. Your customers will also be happier with the accurate arrival time. AI makes shipment problems outdated.

AI and the Future of Supply Chains

Future supply chains will necessitate the use of AI and integrate more data collection. Without taking advantage of the latest technology, supply chains become inefficient and unable to compete.

With higher consumer expectations and demands throughout the supply chain for faster turnarounds, industry requires the improvements AI can supply.

About the Author

Megan Ray Nichols is a freelance science writer interested in engineering, technology, and other science disciplines. She is a regular contributor to Manufacturing Transformation and American Machinist. Megan is also the editor of Schooled By Science. Subscribe to her blog to stay up to date on scientific news and follow her on Twitter.

The Top Supply Chain Trends that Will Impact Supply Chain Management in 2018

The type and capabilities of supply chain technology is expanding, and technology will only grow more important in effective supply chain management in 2018.

From the increased demand to data-driven decision-making through the industrial Internet of things (IIoT) to the use of cloud-based technologies, supply chain technology will advance light years in the coming months.

Supply chain managers and leaders need to understand which technology trends will be the dominant forces of change and continuous improvement in the coming year.

#10. Use of Artificial Intelligence Will Increase

An increased ability to use AI will result in greater use of AI. It is a self-fulfilling prophecy, but not the dark images that come from Terminator. AI includes machine learning and deep learning, allowing machines to self-optimize performance and alert managers of potential failures or issues before they occur.

In fact, up to 80 percent of companies already use AI, explains Louis Colombus in Forbes Magazine, and 30 percent of companies are planning on expanding AI investments in the next three years. Moreover, this will result in the hiring of AI experts and a Chief AI Officer.

The use of AI will lead to better responsiveness by customer service representatives, and since the technology hinges on automation, order accuracy will increase, which will enable better spend analysis and cost reductions through newer, more advanced analytics, reports Medium.

Since up to 79 percent of supply chain managers surveyed cited cost reductions as a top area of concern, investments in and use of AI will increase.

Download: The Top Supply Chain Trends that Will Impact Supply Chain Management in 2018

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Driverless Trucks Could Potentially Replace Many of the Nation’s Best Long-Distance Trucking Jobs

Driverless Trucks

Without action from policymakers, driverless trucks are projected to eliminate some of America’s best trucking jobs while also creating low-wage gig jobs, according to the first in-depth study of how autonomous trucks could be adopted by specific segments of the industry and affect wages and working conditions.

In Driverless?: Autonomous Trucks and the Future of the American Trucker, Dr. Steve Viscelli, a sociologist and trucking expert at the University of Pennsylvania, projects that under the adoption scenario that leading technology firms are working towards, autonomous trucks would primarily handle long-distance highway driving while human drivers navigate local streets. Specifically:

  • Autonomous trucks could replace as many as 294,000 long-distance driving jobs.
  • 83,000 of the best trucking jobs, with stable careers and average annual earnings between $60,000 and $70,000, would be at high risk of automation.
  • Another 211,000 lesser-quality jobs would also be at risk. Their annual earnings average between $46,000 and $53,000 and workers suffer from exploitative labor practices and high turnover.
  • While new local driving and delivery jobs (with humans at the wheel) would be created, data suggests these jobs could pay just half as much as those lost through automation. These workers are also likely to be misclassified as independent contractors, without basic benefits, labor protections, or the right to organize for better pay and conditions.

“This is the first study to both forecast potential scenarios for how autonomous trucks could be adopted by specific segments of the trucking industry, and what that could mean for the quality of trucking jobs,” said author Steve Viscelli.

“In contrast to earlier estimates that autonomous trucks would eliminate all 2.1 million trucking jobs, this approach tells a more nuanced story, where some jobs would be lost and others created, but with significant negative effects on wages, working conditions, and employment status.”

Dr. Steve Viscelli, a sociologist and trucking expert at the University of Pennsylvania

“This is the first study to both forecast potential scenarios for how autonomous trucks could be adopted by specific segments of the trucking industry”Dr. Steve Viscelli,sociologist and trucking expert at the University of Pennsylvania

The report was jointly commissioned by the UC Berkeley Center for Labor Research and Education (Labor Center) and Working Partnerships USA, and is part of a broader multi-industry research project on the impact of new technologies on work supported by the Ford Foundation, the W.K. Kellogg Foundation, and the Open Society Foundations.

“This report makes clear that it’s time to move beyond robots apocalypse thinking,” said Annette Bernhardt, director of the Low-Wage Work Program at the UC Berkeley Labor Center.

“The real challenge of the next 20 years may be less about rampant job losses than about technology having the effect of degrading wages and working conditions and exacerbating already high levels of inequality.”

Driverless? identifies and analyzes six possible scenarios for how autonomous trucks could be introduced by industry, with different job and environmental impacts. The analysis was based on extensive background research and interviews with engineers, developers, trucking firms, and drivers about the direction the industry is heading.

“Right now, we’re on a path where tech developers and big companies decide what technologies get introduced, while workers and the public bear the cost of those choices,” said Derecka Mehrens, executive director of Working Partnerships USA.

“If we want innovation to benefit all of us, we need a more balanced approach: one where workers and the public play an active role in guiding innovation, and those who profit from new technology also take responsibility for its impacts.”

The report proposes new policies to ensure that advances in autonomous driving technology benefit workers, the environment, and the public, including:

  • Establishing a multi-stakeholder Trucking Innovation and Jobs Council to develop a shared innovation agenda, create career pathways, and support displaced workers.
  • Laying the foundation for a 21st century freight industry by addressing the exploitative labor practices that currently prevail in the industry segments that are projected to grow.
  • Promoting innovation with social and environmental benefits, such as electric local trucks and human-drone highway platoons.

Working Partnerships USA is a community organization bringing together the power of grassroots organizing and public policy innovation to drive the movement for a just economy. Based in Silicon Valley, it tackles the root causes of inequality and poverty by leading collaborative campaigns for quality jobs, healthy communities, equitable growth and vibrant democracy. WPUSA builds the capacity of workers, low-income neighborhoods and communities of color to lead and govern.

The UC Berkeley Center for Labor Research and Education (Labor Center) is a public service project of the Institute for Research on Labor and Employment (IRLE) at UC Berkeley. IRLE connects world-class research with policy to improve workers’ lives, communities, and society. Since 1964, the Labor Center has produced research, trainings, and curricula that deepen understanding of employment conditions and develop diverse new generations of leaders.

Here’s How Trucking Could Look with Automation and Proactive Public Policy

The way we move goods is going to change dramatically in the coming decades, but how new technologies make their way onto our roads – who benefits, who may be left behind, the impact on our environment – will be shaped by the response of governments, businesses, and workers across the industry.

Effective public policy can ensure that trucking evolves into a productive, high-road industry. Policymakers, collaborating with workers and industry leaders, have an opportunity to tackle some of our biggest challenges: creating good, family-supporting jobs, improving road safety, and reducing traffic congestion and carbon emissions.

What might an alternative, shared innovation agenda look like for the adoption of autonomous trucks?

This report identifies an adoption scenario with good outcomes for workers, job quality, and public health and safety: human-led platooning, coupled with clean electric local trucks.

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Recapturing Reverse Logistics Expenses Through Blockchain

Reverse Logistics Costs

The costs of reverse logistics amount to more than $750 billion per year, and the demand for reverse logistics has risen in recent years with the rise of e-commerce.

According to Stacy Rudolph of Business to Community, up to 30% of all products ordered online become returns, placing an insurmountable burden on reverse logistics.

Using a combined blockchain and reverse logistics strategy can help alleviate these costs, and supply chain executives need to understand a few things about it.

Reverse Logistics Carry High Risk in Supply Chain Management

Risk within reverse logistics is higher than that and forward logistics. Manufacturers and shippers have a duty to ensure sustainability, reports Supply Chain Dive, and an effective sustainability program must consider what happens to products after their lifespan.

In other words, the final resting place for products is the burden of manufacturers, and some products, such as smartphones and electronics, can pose a risk of harm to the environment and the personal information of device users.

Blockchain Offers Significant Benefits to Returns Management

Consumers are turning toward eco-conscious decisions in purchases, and blockchain technology could be the solution.

They expect manufacturers to adhere to the guidelines within the International Organization for Standardization (ISO), governing proper disposal of goods, including reclamation of raw materials and removal of personal information from electronic devices.

ISO standards are essential to effective returns management. Since products may be used before returned, the burden of ensuring the privacy of consumer data and integrity of the product falls to the manufacturer or shipper. Other products, such as those used for hygiene or personal uses, could increase the risk of cross-contamination throughout the supply chain. This is why blockchain in reverse logistics go well together.

Download the White Paper: An Introduction to Blockchain in Supply Chain Management

Blockchain technology has major implications for monitoring products at the end of their lifespan through devices connected to the Internet of things, and in the spare parts supply chain, which is part of reverse logistics, blockchain technology can be used to reduce over- and under-ordering, ensure compatibility of spare parts with items being repaired.

This is not limited to small items, and it includes major sectors of the economy, like the automotive industry. As explained by a Technavio Report, asserts Business Wire, blockchain technology can enhance the flow from information in reverse logistics, helping manufacturers understand the full cycle of their products, even after disposal. The technology also has implications for handling product recalls, especially in the food and drug sector.

Best Practices for Using Combined Blockchain and Reverse Logistics Strategies

The road to better reverse logistics is not always clear, and supply chain leaders need to understand a few best practices for implementing combined blockchain and reverse logistics strategies. These practices include:

  • Identify limitations of existing systems and visibility problems within reverse logistics.
  • Share information about potential savings to shareholders, as well as the impact on public image, resulting from better logistics within returns management, increasing customer service levels.
  • Integrate supply chain systems into a single platform, providing a combined approach to management of product lifecycles from procurement through reclamation, recycling and disposal.
  • Share plans to implement blockchain-based solutions within the supply chain and with other supply chain partners, such as suppliers or vendors.
  • Outsource nonessential tasks to third-party logistics providers, freeing capital for investment into blockchain technology. In fact, the use of 3PLs rose 5% last year, reports SmartBrief, so the natural progression will be for 3PLs to begin using blockchain in their platforms as well.
  • Encourage a culture of acceptance of blockchain by moving all processes into the ledger technology.
  • Develop smart contracts that ensure all affected parties understand their obligations while cutting out the middleman, explains Irish Tech News. Blockchain can ease concerns over returns processes, critical for returns in stores when purchased online, as defined by the contract.
  • Implement new payment processing systems, such as WireCard, which are using and developing blockchain technology to map payments thoroughly, reports com.
  • Make use of blockchain technology to track returns, as well as initial orders, will increase consumer trust, even when consumers are business to business purchasers.
  • Use cost savings achieved through blockchain in reverse logistics to offer free return shipping, increasing conversion of site visitors. In fact, 79% of customers want free return shipping, and 92% will make repeat purchases if returns are easy.
  • Make the use of blockchain technology in returns management visible to consumers. Since 67% of shoppers check returns policies before making a purchase, this will aid in selling more product and creating hassle-free returns policies.

Act Now to Recapture Reverse Logistics Expenses Through Blockchain

Shippers and supply chain leaders have a big opportunity to recapture lost costs through more effective reverse logistics and comprehensive, easy returns management. It’s not just about saving money in returns; it’s about positive customer experiences and interactions.

Combining blockchain and reverse logistics will generate a hassle-free way of connecting existing supply chains to reverse logistics and keeping costs down for consumers.

Related Article: How Will Blockchain Ledger Technology Impact Shippers?

How Will Blockchain Ledger Technology Impact Shippers?

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Latest Freight Data Indicates Alarming Global Trade Slowdown

August 31, 2018 · By 24/7 Staff ·

Global Trade Slowdown

According to the latest Goldman freight data, there has been a gradual slowing in global trade since 4Q17, and the July readings suggest an alarming continuation, and in some cases acceleration, of this trend.

The deceleration has closely tracked a tightening in global financial conditions, particularly evident in Emerging Market data, which in turn has largely been a manifestation of the ongoing escalation in trade tensions between the US and China.

Indeed, the implementation of the first round of US-China tariffs in early July may also have had an impact: US West Coast inbound port volumes were -1% in July (5% in 1H), while Chinese ports’ throughput growth slowed to 2% (6% in 1H), worse than implied by the close historical correlation with Chinese export orders.

At the same time, air cargo growth at Europe’s key hubs turned negative (-2%) in July, with weakness cited on Asia-Europe.

Looking forward, global manufacturing export orders in June/July were consistent with slightly positive, albeit slowing growth.

Breaking down freight by segment, here are some observations from a recent Goldman report:

Sea & air freight (volume growth positive, momentum negative): Freight datapoints have indicated a deceleration in growth since 4Q17. July data appears to have stabilized in Sea, with volumes growing c.3% in line with June, while Air freight growth has decelerated further; e.g. EU airport cargo -2% yoy from 1% in 1H, 7% in 2017.

Container: Active fleet growth continues to slow following announced capacity cuts (6% in August vs. 9% in 1H); Goldman expects further slowing to c.2% by mid-2019. While overcapacity in 1H limited carriers’ ability to pass on rising bunker and charter costs, there are now clear signs of supply rationalization, as carriers begin to hand back capacity and new orders remain low.

Airlines (momentum weaker): While the market environment has remained broadly positive for EU-airlines ytd, growth in load factors has been slightly weaker recently. Forward capacity data suggests stable short-haul capacity trends in Europe, while long-haul supply growth is decelerating.

Infrastructure (volume growth positive, momentum stable): Airport (EU hub) traffic grew 4% in July, a slight deceleration from 6% growth in 1H18/2017/2016. Looking at scheduled airline seat capacity for the coming months suggests near-term traffic growth will remain at similar levels, albeit with growth slowing from high levels in Frankfurt, Spain, and Portugal.

Commodities shipping (freight rates improving, momentum better): In dry bulk, rates have been slightly stronger owing to improved Asian demand and low supply growth of c.2%. Oil tanker rates have been weak over the past year but appear to have stabilized, and slowing fleet growth could be supportive of rate upside. LNG tanker rates have improved ytd from historical lows as higher Asian imports have boosted demand.

View the slideshow to see how global trade has slowed down recently in charts.

Source: ZeroHedge

Trump’s Trade War Could Destroy 4% of Global Trade

If US President Trump follows through on his threats to stage a trade war against his former allies in Europe, China, and other countries, it could reduce world trade by 4% and wipe away 0.4 percentage points of global GDP (about $800 billion), according to Oxford Economics.

World: Freight Indicators

It would be especially bad for the global economy because it would come right as oil prices and interest rates are both rising globally.

“The threat to world growth is significant,” Oxford lead economist Adam Slater wrote in a recent note to clients.

His warning is the latest in a string from researchers, investment banks, and politicians.

“Recent tariff threats, if realised, would extend high tariffs to over 4% of world imports – a tenfold rise. This comes just as the global upturn shows signs of faltering. The threat to world growth is significant: in a scenario of escalating tariffs, our modelling suggests world GDP could be cut by up to 0.4 percentage points in 2019,” Slater wrote.

Currently imposed tariffs only total about $60 billion (or 0.3%) of world trade. But all the upcoming proposed and threatened tariffs bring the total to $800 billion (4%).

Between 2015 and 2017 world trade had been growing. But that trend reversed after Trump took office at the beginning of 2017.

“The upsurge in protectionism comes at an inopportune time for the global economy. World trade growth appears to have slowed notably in recent months. Freight-based indicators are especially worrying, with six-month annualised growth having subsided from 6-7% in January to around zero in April. There are also broader indications of a slowdown. The Citigroup economic surprises indices for the G10 and emerging markets have turned deeply negative, with disappointing data releases dominating.”

The US has some buffer room given that its economy is currently growing more quickly than the other major economic blocs. But that is threatened if a full-blown trade war arrives as central banks increase interest rates and oil prices go up, Slater believes.

Source: Business Insider

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Managing each stage of shipments is very complex for shippers, and most transportation management systems lack a single, multi-mode solution that handles contract rate and schedule data for domestic trucking and LTL haulers, as well as ocean and air carriers

Download this eBook and learn more about how an automated multi-mode solution solution can help you find the most advantageous and cost-effective routes across numerous contracts.

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Should Retail Stores Tackle “the Amazon effect”?

August 27, 2018 · By Shane Faulkner

The Amazon Effect

Taking its name from the super fast-growing e-commerce giant, “the Amazon effect” is a phrase we use to describe the disruption caused when Amazon decides to enter into a new market and the havoc it can sometimes wreak on competitors.

That effect on brick-and-mortar retail stores is well documented. So, it comes as no surprise that many retailers are looking for ways to stay profitable.

While it has caused some retailers to permanently shutter many of their storefronts, US Census figures surprisingly show that physical retail stores still generate 90.7% of all retail sales. This raises the question: is “the Amazon effect” really an existential threat to physical retail?

Businesses still struggling to keep up may be wondering what they can do to encourage customers to come into their retail stores, instead of shopping from their internet-enabled devices. I think a good place to start would be to fight fire with fire and embrace technology as part of the in-store customer experience as well.

A unique and innovative experience

The convenience of online shopping is difficult to compete with, so many retailers opt for offering their customers a completely different experience than they could find online. A recent study by SOTI showed that 92% of customers prefer stores that offer a mobile technology experience, for example.

Augmented reality apps can allow customers to virtually try on clothes, see what a paint color would look like on their walls, or even how furniture would look in their homes. It is technological innovations like these that will bring the excitement back to shopping in a store. And with the right in-store technologies, retailers can get a better understanding of what their customers want out of the shopping process.

Using technology to track the movements of customers is another way to harness technology in a brick-and-mortar store. Analysing this data and using it to make valuable changes to aspects such as the store layout could go a long way to improving the customer experience, and in turn, boosting in-store sales.

Putting mobile technology at the heart of the logistics process is an option with Swisslog’s CarryPick solution. Coupled with our SynQ software, there are even opportunities to share each step of order fulfillment with customers via a tracking page.

Use stores as warehouses

For omni-channel retailers, boosting sales in physical stores could be as simple as offering a fast and free click & collect option on the website. Delivery charges can be expensive, so providing a free option that brings customers into the store where they’re more likely to make additional purchases could bring an increase in sales.

With warehouse space becoming more and more limited, omni-channel retailers also have the option of utilizing their stores as warehouses for their online customers. Customers who do choose the delivery option could benefit from faster dispatch from their local stores, but those choosing to click & collect get their goods faster as well.

Some of the latest technologies can even help retailers keep their stock up. Investing in an automatic palletizing solution like Swisslog’s ACPaQ would get stock to stores quicker. Using innovative warehouse technology could mean higher stock availability in stores, and therefore an increase in click & collect orders.

More than just retail

A survey conducted by McKinsey showed that even in the most popular e-commerce categories, only around 10% of Chinese consumers stay online throughout the entire customer journey.

For example, customers for consumer electronics tend to visit a physical store to seek advice and get a chance to see the product first-hand before purchasing. This could be said for a number of other categories, including clothing – where people are more inclined to try before they buy.

Physical stores need to be more than just retail. Providing product demos, free advice, and try before you buy opportunities can position retailers as the experts in their field. Apple’s Genius Bars, for example, offer customers the chance to talk to a tech expert about any issues they are having with their Apple product.

Offering these services in store could boost foot-traffic, and even if they don’t make a purchase the first time they come in, they will gain a better awareness of what products are in stock for future purchases.

Automate your way to retail success

Contrary to popular belief, it is obvious that physical retail is not dead and, in fact, many retail stores are thriving again now that they have found their way through a few difficult years. There is more than one way to leverage technology and innovation to tackle the Amazon effect, and it differs depending on the type of business.

Swisslog has a comprehensive portfolio of solutions, from the modular SynQ software and intelligent CarryPick robots, to automated picking and palletising solutions like AutoPiQ and ACPaQ. There is an answer for every retail challenge, so don’t scare away your customers by living in the past. Step into the future and show your customers the way.

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