This Week in Logistics Information (December 3 – 9)

chip shortageThe chip scarcity has been one of many hottest subjects in 2022. I learn an article earlier this week that broke it down fairly succinctly. In the beginning of the yr, the worldwide chip scarcity had grow to be so dire that enormous industrial firms have been taking scarce chips out of washing machines to plug them into industrial modules. Since then, the worst of the worldwide chip scarcity has doubtless handed however the restoration is trudging alongside slowly and erratically. It is because chipmakers are dealing with a hunch in demand because of the worsening state of the worldwide financial system. That is resulting in a listing pile-up of processors and reminiscence chips utilized in PCs. In consequence, shortages are assuaging throughout the board, and provide constraints attributable to report demand for chips through the pandemic are much less widespread. This implies reduction for patrons which have handled a interval of lengthy lead instances and inflated pricing. However, whereas chip demand is receding, it isn’t sufficient to spell the tip of the scarcity as provide challenges will doubtless stay in place into 2023. And now on to this week’s logistics information:

We’ve seen a lot of tales over the previous few years of retail shops shifting to smaller format shops to give attention to e-commerce success. McDonald’s additionally leaping on the bandwagon. The corporate is testing a small-format restaurant in Fort Value, TX, the place the centerpiece is a conveyor system that delivers meals to a mobile-order lane. The restaurant options what the corporate calls an Order Forward Lane, which serves mobile-order prospects their meals via a conveyor system. There are different choices, too, together with a pick-up shelf within the restaurant for purchasers who wish to are available and get their takeout orders; designated areas out and in of the restaurant for supply drivers and self-order kiosks that settle for each money and credit score. There’s additionally a typical drive-thru lane, in fact. Drive-thru grew to greater than 70 % of orders even earlier than the pandemic, and now with the rise in cell ordering and supply, takeout represents someplace round 90 % of a typical McDonald’s location’s gross sales.

Whereas many retailers are discounting, canceling orders, and in any other case scrambling to eliminate a glut of products filling their shops and warehouses, some are embracing their increased stock ranges. Retailers together with Dick’s Sporting Items, Lowe’s, and Walmart say the rising shares sign a restoration from final yr’s shortages pushed by supply-chain disruptions and put them in a robust place to benefit from shopper demand this vacation procuring interval. The businesses constructing their inventories want to guarantee they’ve objects available on the proper second. The tactic seems to have paid off for the Black Friday procuring vacation. Actual-estate companies agency CBRE Group Inc. stated its survey of 13 malls and out of doors procuring facilities it manages throughout the U.S. discovered no issues with shortages of products throughout Black Friday this yr.

In a transfer that can make greater than 27,000 of its product choices out there in as little as one hour whatever the time of day, Walgreens is extending its same-day supply service for purchasers throughout the nation. The 24-Hour Identical Day Supply providing can be out there at almost 400 Walgreens places that at the moment function across the clock, and consists of merchandise like groceries, over-the-counter drugs, private care objects, family necessities and extra. Clients can place orders for round the clock supply via the Walgreens app or web site. Whereas prescriptions should not eligible for the retailer’s one-hour supply service, they could be eligible for supply via Walgreens Categorical. Identical-day supply will not be at the moment out there in Alaska, Colorado, Iowa, Maine, North Dakota, South Dakota, Utah, Vermont, West Virginia and Wyoming, and supply of orders containing alcohol is at the moment restricted to pick shops in Illinois and Florida.

Talking of prescriptions, CVS is testing a system that enables pharmacists to course of prescriptions partly remotely, a transfer it stated may enhance retailer working circumstances and the expertise for purchasers as the corporate grapples with a scarcity of pharmacists. CVS has geared up roughly 8,000 of its greater than 9,000 U.S. drugstores with know-how that enables pharmacists to assessment and enter prescription info remotely whereas nonetheless assembly patient-privacy necessities. About 400 of CVS’s 30,000 pharmacists are at the moment serving to put together prescriptions both at central places, from their properties or in shops apart from the place drugs can be allotted, the corporate stated. The plan doesn’t contain adjustments to how folks choose up their prescribed drugs from CVS pharmacies.

As Amazon prepares to debut its long-delayed Prime Air drone supply service, it’s additionally exhibiting off a smaller, quieter drone that can be prepared in 2024 and may very well be making common deliveries in main cities by the tip of the last decade. Amazon confirmed off its next-generation drone at a current occasion close to Boston to spotlight the way forward for supply. The 80-pound hexagon-shaped plane, about 5½ ft in diameter, is nimble sufficient to make deliveries in extremely populated areas reminiscent of Boston, Atlanta and Seattle. It’ll be extra succesful and fewer intrusive than the mannequin Amazon is utilizing in its Prime Air service, which is able to start in two markets — Lockeford, California, and Faculty Station, Texas — within the coming weeks. By the tip of the last decade, the corporate’s objective is to ship 500 million packages a yr by drone in cities, Amazon Prime Air vp David Carbon informed reporters.

President Biden signed a invoice Friday proscribing rail staff from placing, however the business continues to be combating an enormous drawback: having sufficient workers to deal with buyer demand. The most important U.S. freight railroads have reported sturdy earnings lately, helped by increased costs and regular enterprise in transporting the whole lot from vehicles to fertilizer. Export demand for coal and grain, stemming from disruptions in provide chains in Europe after Russia invaded Ukraine, bolstered freight volumes this yr, railroads stated. On the identical time, railroads proceed to face disruptions tied to having a scarcity of staff. This yr, Union Pacific Corp. and BNSF Railway have issued extra embargoes—restrictions positioned on the quantity of cargo that may be transported—than in earlier years. Railroads situation embargoes as a technique to management site visitors actions when service is disrupted resulting from a catastrophe or to ease congestion.

Everybody has had points with discovering a parking spot. However for truck drivers, it may be a a lot greater situation. Senate lawmakers launched laws on Thursday that may put aside $755 million in aggressive grants over 4 years to broaden much-needed truck parking throughout the nation. The bipartisan Truck Parking Security Enchancment Act, co-sponsored by Sens. Cynthia Lummis, R-Wyo., and Mark Kelly, D-Ariz., will function companion laws to a Home model launched final yr and permitted by the Home Transportation and Infrastructure Committee in July. The Senate invoice permits for public-private tasks that create new parking areas or broaden parking current services, and tasks that permit for industrial parking at current weigh stations, relaxation areas, and park-and-ride services. The invoice would additionally permit for truck parking growth at industrial truck stops and journey plazas. The American Trucking Associations and the Proprietor-Operator Impartial Drivers Affiliation championed that laws in a joint letter to Transportation Secretary Pete Buttigieg in February. Each had related reward for the invoice launched on Thursday.

Uber Applied sciences and self-driving know-how firm Aurora Innovation will broaden their driverless pilot program in Texas to satisfy elevated supply demand through the holidays. This system can be expanded to the just lately launched 600-mile industrial lane between Fort Value and El Paso in Texas to assist prospects of logistics enterprise Uber Freight because it ships items this vacation season, Aurora stated on Friday. The businesses launched their pilot program a few yr in the past to autonomously transport items between Dallas and Houston. Autonomous items hauling has been seen as the way forward for logistics because it may enhance truck utilization and enhance transportation frequency between terminals. Aurora Innovation, which additionally counts FedEx and Toyota as companions, appears to launch the Aurora Driver self-driving platform on the finish of 2024.

DoorDash is altering the way in which it fees fee to Canadian eating places with a brand new, tiered mannequin. The San Francisco-based meals supply service introduced the change Tuesday, saying it’ll supply eating places extra “flexibility” and assist them benefit from digital development alternatives. The mannequin resembles one launched within the U.S. final yr and has three tiers beginning with the essential plan, which fees a 20 per cent fee on deliveries and 10 per cent on orders picked up by diners and comes with the smallest supply radius. Past that, eating places can select plans with extra options. One step above the essential plan is DoorDash Plus, which entails a 25 per cent fee on deliveries and eight per cent on pickups. This plan additionally offers entry to members of Sprint Cross, a paid month-to-month subscription service providing no supply charges, however at a heftier 27 per cent fee. The service additionally provides courier companies to a bigger supply space (DoorDash wouldn’t say what the precise radius is). The ultimate tier is DoorDash premium. It comes with a 29 per cent supply fee and eight per cent for pickups. The supply space for these customers is the most important, they get a $50 rebate for spending $100 or extra on advertising and marketing each month and entry to Sprint Cross prospects however at no distinction in fee.

Need to study extra constructing resiliency with out dropping the advantages of just-in-time stock? Be a part of this GEP-ARC Advisory Group webinar — The right way to Construct Resilience With out Dropping the Advantages of Simply-In-Time Stock — to study extra concerning the revolutionary instruments and capabilities GEP and the tech agency employed to handle provide chain disturbances successfully. Audio system embody Joanna Kostecka, Vice President, International Operations Planning and Supplies Administration at HPE; David Doran, Vice President, Consulting Companies at GEP; Binayak Shrestha, International Head of Companies Supply at GEP; and Steve Banker, Vice President, Provide Chain Administration at ARC Advisory Group.

That’s all for this week. Benefit from the weekend and the music of the week, Bizarre Al’s It’s All Concerning the Pentiums. Sadly, Bizarre Al doesn’t permit this music to be performed on different websites, so that you’ll have to comply with the hyperlink.


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