It’s been an additional fast and active year right here at Logistics Viewpoints. Today’s column is our final column of the year, as we take a couple of weeks to rest and re-energize to bring you more thrilling articles in the new year. For today’s column, I want to revisit some of the top supply chain and logistics stories that occurred in 2016 and will continue to form the business in 2017 and beyond.
Trump Wins Election and How It Will Affect Supply Chain Trade
In what many individuals have called a beautiful victory, Donald Trump won the 2016 Presidential Election. In fact, later on today, the Electoral College will make it official. There are a few big stories related with Trump’s victory from a supply chain and logistics standpoint. First and foremost, there is the trade angle. Donald Trump has currently said that he will pull the US out of the Trans-Pacific Partnership (PTT) trade agreement, which Japan’s Parliament ratified final week. Even though the ratification was mainly symbolic as the agreement demands US ratification in order for it to take impact. In addition, Trump has frequently said that the US will get the short finish of the stick on most trade deals, and will certainly re-negotiate with its trade partners. This has numerous nations uncertain of what global trade will look like, and just how much the Trump-led US government will make an effort to shake up trade deals.
The other interesting note from Trump’s win has been the assistance of the US trucking industry. Per his feedback around infrastructure, the business has high hopes that money will be poured into improving conditions on highways and infrastructure. This believed helped settle issues from Wall Street and avoided what had been dreaded as a major falloff in the stock market. Who understands what the future of a Trump-led White House will look like, but there are severe global and domestic concerns about the direction of the nation and its trade partners. It will certainly be an fascinating development to watch more than the next 4 years.
Supply Chain Acquisitions
2016 was an additional big year for acquisitions. One of the much more recent ones was also 1 that took some people by shock when Walmart acquired Jet.com. I wrote earlier this yr that the acquisition to me looked like a desperation move by Walmart to near the gap with Amazon. Jet.com has shown some promise in its brief existence. But that is 1 region of concern for the acquisition – the brief existence. Jet.com has only been in business for a little more than a year, and has not demonstrated a path to profitability. Additionally, the business has shifted its strategy, dropping its membership fee following only a few brief months. The greatest element of the Jet.com platform that Walmart appears interested in is the dynamic pricing algorithm. This seems like the biggest gain for Walmart in the acquisition.
Uber had a active year, with the big information becoming its acquisition of Otto, the autonomous truck begin-up based in San Francisco. Uber was searching into self-driving technology, but with the acquisition of Otto, it is looking into lengthy haul trucking as another core component of its company. And so far, the company has effectively produced two autonomous truck deliveries, one in the early morning and one in rush hour visitors. With the future of trucking in flux, self-driving trucks could be the answer.
A couple of years after UPS’ acquisition of Dutch parcel delivery business TNT Express was blocked by regulators, FedEx was able to obtain the company for $4.eight billion. Respectively, the companies had been the third and fourth biggest gamers in the European express delivery marketplace. The acquisition pushed FedEx’s employee count to almost 400,000 worldwide, with revenues near to $58 billion. This puts FedEx in a dead heat with UPS from a income standpoint, although it still employs approximately 40,000 much less people.
Hanjin Shipping was South Korea’s biggest container line and one of the world’s top ten container carriers in terms of capability. In April, the company applied for a debt restructuring in order to avoid insolvency proceedings. The business filed for bankruptcy safety, and all hell broke loose. And by all hell, I imply an absolute logistics nightmare. At first, numerous international ports denied accessibility to its vessels. This prompted Hanjin to inject $90 million, such as $36 million from its chairman Cho Yang-ho’s personal assets, to assist resolve disruptions to container cargo transport brought on by Hanjin’s monetary troubles. Sadly, the cash it invested was far brief of the fees it had to spend to offload cargo on the vessels. This left an estimated $14 billion worth of goods nonetheless adrift, with most of that cargo required for the holidays. The matter is still not totally resolved, as the business is in the process of shutting down offices and dismantling its service network.
Yes, drones are nonetheless right here for us to discuss. Even though most retail companies are not looking seriously at drones at this stage as viable delivery options, the subject is as hot as ever. The large question gets to be what are the real sensible uses of drones for deliveries? 1 of the biggest pieces of information I read this year was about Zipline, a US robotics drone company. The company produced history by delivering blood by drones in Rwanda. The program has Zipline dropping blood parcels via parachute to remote health centers. Well being employees can request a blood drop via text message, and it arrives around 30 minutes later. The large information here comes down to infrastructure, where even a brief drive can consider hrs due to road circumstances. This appears like the type of work drones are meant for.
But, not to be outdone, the retail sector has been pushing drone deliveries as nicely. In reality, over the final few months, JD.com, Domino’s Pizza, seven-Eleven, and Amazon have all made their initial drone deliveries. But don’t expect these to become the norm just however, especially in the US. The more sensible side of drones comes in the form of drones in warehouses and yards, as they are able to monitor and manage stock and logistics. Businesses like PINC offer solutions that make use of RFID for genuine time location of yard assets. But we’ll maintain a close view on what drones have in store for us.
Warehouses have been in the news a lot lately as nicely. And there really have been two major trends. The initial is the types of warehouses becoming constructed. With much more and much more retailers downsizing their in-store operations, there has been a trend to develop much more sophisticated warehouses that can meet the altering needs of retail. This indicates more automation in the warehouse as nicely as putting warehouses closer to end-customers, particularly in cities. This outcomes in smaller, more efficient warehouses in urban areas.
The second trend is robots in the warehouse. The first believed here instantly goes to Kiva robots (acquired by Amazon) bringing pallets of goods to individuals for picking and packing. But now, there are a host of companies supplying robots that reduce travel and picking time, as nicely as enhance navigation in the warehouse. Mixed with drones, these new and emerging technologies will change the way that warehouses function, and how quickly they can choose, pack, and fulfill orders. And with the changing nature of omni-channel logistics and customer demands, this is one region that will need continuous improvement.
So there it is, the top 5 supply chain and logistics stories. Of program there are many other big stories out there, but these are the 5 that have gained the most traction (at least in my opinion). The industry as a entire will continue to change and evolve, and some of these trends will become even larger parts of our provide chain lives. I know I will certainly be monitoring every of these more than the next year to see how much issues alter. That’s it for us at Logistics Viewpoints this year. We’ll see you in January.