In his First Thoughts column this week, SCDigest editor Dan Gilmore summarzed key themes and trends in the year in supply chain 2017, and also highlighted the top stories by month during the year. (See Supply Chain Year in Review 2017.)
Gilmore did not have space to list all of the top stories and news events in the past year, so below we offer our extended view of the ost important supply chain stories of 2017.
Procter & Gamble announces it will make additional investments in recycling and beneficial reuse that will eliminate all manufacturing waste from its global network of more than 100 production sites by 2020.
Amazon raises eyebrows with announcement of plans for major $1.5 billion air shipping hub at the Cincinnati airport, with more than 200 flight departures and landings per day to be scheduled. Amazon denies it plans to enter parcel in a big way, saying facility is just to meet peak demand requirements. Sure.
In a surprising move, Kellogg says it will end its direct store delivery (DSD) model for the supply chain of its snacks business (crackers, etc.), moving to shipments to retailers’ distribution centers instead. As a result, Kellogg said it would close 39 distribution centers, which will all shutter by the fourth quarter of 2017.
Maersk says the fourth quarter of 2016 was the first quarter since 2010 where the demand for container shipping outgrew supply growth.
In probably the biggest labor action of the year, workers at Boeing’s aircraft factory in South Carolina handily defeat a vote to join the International Association of Machinists and Aerospace Workers (IAM). 74% say no, continuing the unbroken trend of unions losing major votes in Southern states in recent years.
The US DOT has formally notified Congress that a required study on 2013 hours of service regulations pertaining to 34-hour restarts revealed those restrictions provide no safety benefit. This in effect will eliminate the regulations that were adopted under the Obama administration but suspended in late 2014 pending a study.
The American Society of Civic Engineers released in quadrennial study on the state of US infrastructure, and as usual it painted a dismal picture, giving the nation’s overall infrastructure a grade of D+. Roads earned a D, bridges C+, ports C+, and perhaps surprisingly a B for rail.
PwC report says that 38% of US jobs could be at high risk of automation by the early 2030. The good news – wages should be up for those that manage to find a job.
Pizza giant Domino’s says it is making real pizza deliveries over the roads in Hamburg, Germany using the six-wheeled robots that sort of looks like R2D2 from Star Wars with a storage compartment. The delivery robots are made by Starship Technologies, which has several tests going around the world.
Amazon postpones the opening of its first “Go” convenience store in Seattle, in which consumers literally “grab and go” with items without a stop at a point of sale register, using a combination of smart phone apps and unspecified technologies in the store. Reports are the store system has problems with more than 20 shoppers at once.
The new Ocean Alliance and TheAlliance container shipping consortia begin operations, with shared operating assets among member carriers, joining the Maersk-led 2M agreement to leave three major alliances.
Truckload carriers Knight Transportation and Swift Transportation announced plans to merge in a $6 billion deal. New company to be called Knight-Swift Transportation.
Tesla shocks the truck manufacturing sector when CEO Elon Musk announces in a Tweet that company will unveil its design for an all-electric big rig in September. The vehicle will include autonomous driving technology as well, though details remain vague.
Walmart announces that it will offer discounts on products ordered on-line if they are picked up in-store rather than delivered to the consumer’s home. Discounts are as much as 5%.
New CSX CEO Hunter Harrison says the rail carrier has already closed a number of inefficient “hump yards” as part of an effort to drive major operational efficiencies through what Harrison calls “precision railroading.”
Walmart, saying it can’t battle climate change on its own, announces Project Gigaton, which has goal of reducing a gigaton of CO2 emissions from its extended supply chain by 2030, in part by putting pressure on its suppliers. Citing its own efforts on greenhouse gases, Walmart says “We need our top suppliers to take more action.”
A contract Amazon delivery driver is caught twice in two days on home video cameras rather violently hurling parcels onto a driveway and over a fence. The woman is later let go by Amazon.
Amazon holds a meeting of leading consumer packaged goods companies trying to convince them to sell direct via Amazon instead of relying on traditional retailers. “Times are changing,” Amazon says in an invitation obtained by Bloomberg.
Gartner announces it top 25 supply chain for 2017, led by Unilever, followed by McDonalds’s, Inditex (Zara), Cisco, and H&M. Procter & Gamble and Apple not on list after again being placed in a sort of hall of fame.
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President Trump announces the US will not abide by the UN Paris Climate accord, amidst great controversy.
The expanded Panama Canal celebrates its first year of operation and is already having a big impact on global logistics, with volumes and ship sizes up sharply.
Amazon announces its plans to acquire grocer Whole Foods and its 400+ well-placed stores. Speculation is rampant on what the strategy will be, but general consensus Amazon will take big costs out of the grocer’s supply chain and use the stores as a platform for ecommerce pick-up and delivery services. Stock prices of traditional grocers fall by almost double digits on the news. Some react to the announcement by calling for Amazon to be broken up.
Ocean carrier Maersk Line, FedEx’s European TNT units, and several manufacturing plants hit with cyber-attacks they take down their services for a day or more, as efforts seem focus on disrupting supply chains.
UPS announces a 27-81 cent per package surcharge, depending on service type, for a few weeks of peak season deliveries in the US, in an effort to recoup the higher costs that come with managing the peak surge.
CSCMP releases annual State of Logistics Report, with headline news that 2016 US logistics fell as a percent of GDP for the third year in a row, at 7.5%, down from 7.84% in 2015.
CSX CEO Hunter Harrison blames extreme rail service issues coming after changes he makes to operations on recalcitrant employees who don’t want to change, while union says boss should look in mirror.
Walmart announces deal with PowerPlug to use the company’s fuel-cell-powered forklifts in 58 of its DCs, matching a similar deal Amazon struck in April.
Amazon announces it plans to hire 50,000 additional new fulfillment center workers by end of the year, putting additional pressure on an already tight DC labor market in most areas.
The American Trucking Associations released its latest forecast on trends in freight transportation, predicting freight volumes will grow by 2.8% in 2017 followed by 3.4% annual growth through 2023.
Google releases its Google Glass product, now targeted at industrial applications such as manufacturing and order picking, as DHL and others see big games from using virtual reality in the DC.
City Bank study claims the US Post Office is giving Amazon a $1.46 subsidy on very package shipped, as USPS gets around law requiring it to not price below its costs.
Walmart announces program On-Time, tightening windows for delivery from vendors backed by chargebacks in effort to reduce supply chain variability.
Walmart says $300 billion worth of consumer goods imported to the US – out of $650 in total – could be moved to domestic production if a series of policies were changed, including worker training, reduction of some regulations, better financing options for smaller manufacturers and more. Did anyone in Washington listen?
MIT researchers say they have invented new technology for use of drones and RFID in distribution centers that dramatically increases the read range of passive tags, making use of the technologies much more practical to take physical inventories.
Amazon announces plan to turn a property in Cleveland from what was once the US’ largest retail mall – closed for several years – into one of its giant fulfillment centers.
French ocean carrier CMA CGM says it is partnering with the New York Shipping Exchange to offer US exporters guaranteed rates through four U.S. ports to Asia in a move to simplify the ocean booking process.
West coast port workers sign three-year contract extension, providing labor stability now through 2020, as both sides look to slow erosion of container volumes to other ports through the Panama Canal.
IBM announced 10 food industry companies had recently signed up with IBM to test the use of so-called blockchain technology for tracking the movement of food products across the global supply chain, joining Walmart, which had earlier signed up for a pilot with IBM.
Truck drivers in an event called Run on Less were able to average 10.1 miles per gallon over 50,000 miles travelled using only relatively modest technical advances and their own driving skills.
Department store chain Kohl’s says it will begin accepting Amazon returns in 82 of its stores.
Report from the International Transport Forum in Europe says autonomous trucks could reduce truck driver jobs 50-70% in the U.S. and Europe by 2030, calls for nations to prepare for social disruption now, perhaps require slower phase-in of the technology.
Candy maker Mars says it plans to spend $1 billion on is supply chain as it expands its sustainability goals beyond previously announced targets to cut its own greenhouse gas emissions by 40% by 2020 from its level in 2007.
Microsoft, Maersk Line, accounting firm EY and technology firm Guardtime to apply so-called blockchain technology to the currently complex world of marine insurance. The solution will built using Microsoft’s cloud-based platform called Azure. The program will involve the creation of a shared database that logs information about shipments – and importantly potential risks – in order to help ships comply with insurance regulations.
Contract manufacturing giant Foxconn announces it has selected Southern Wisconsin for a massive new flat panel factory that may employ as many as 10,000 workers.
Amazon announces Seller Flex program, in which the company will pick up packages from merchants on its Amazon Marketplace service and get them into its network for customer delivery. Program is thought to be in part way to reduce need for additional fulfillment center space.
Whirpool wins an US International Trade Commission action against South Korean appliance makers. Penalties to be determined at later date.
American Trucking Associations says US driver shortage will reach all time high by year’s end, at 50,000.
Toyota announces successful test of fuel cell truck and says they will be used for regular routes at ports of LA and Long Beach.
Walmart announces new program that will enable returns of items purchases on-line to be completed in just 30 seconds in store
Walmart announces it will deploy mobile robots in 50 stores that use imaging technology to identify stockouts on the shelf and pricing errors.
Nike says its new responsive manufacturing model, based on more local production, will reduce manufacturing to market times from about 60 days to 10 days or less.
Amazon announces new service, called Amazon Key, in which drives will deliver right into consumers’ homes, using a smart lock system, video cameras and more. Service said to roll out in select cities almost immediately, though what drivers will be used is not clear.
JB Hunt sends letter to customers warning truckload rates could soon jump 10% or more, largely due to the US driver shortage.
With great fanfare, Tesla CEO Elon Musk unveils two coming electric truck models – the Tesla Semi. Promised for 2019 delivery – though critics says much of the battery technology does not yet exist – Tesla says is taking pre-orders. Many large companies do ordered test units, led by Pepsico’s order for 100 units.
A study by McKinsey finds that about one-third of US workers are likely to use their jobs by 2030 to hardware and software robots – impacting
70 million jobs.
Negotiations for a redo of the NAFTA trade agreement between the US, Canada and Mexico hit more bumps, with next talks set for January, as US trade representative is pessimistic on chances of success.
Sales for Chinese ecommerce giant Alibaba on the somewhat odd Singles Day exceed $25 billion, dwarfing the amount of all US on-line sales on Cyber Monday.
UPS gets grant from New York State to convert as many as 1500 diesel trucks in New York City to electric, based on conversion technology from Unique Electric Solutions.
In midst of growing driver shortage, carrier Bulldog Hiway Express announces new program that will guarantee drivers minimum pay of $1000 per week regardless of miles driven.
New CSX CEO Hunter Harrison dies, leaving the legendary executive’s plans for implementing his vision of “precision railroading” operations uncertain at the carrier, though CSX says that that train has already left the station, if you will.
Foxconn says it plans to use autonomous busses to move workers from parking lots to building on its coming flat screen manufacturing campus in Southern Wisconsin – and asks state to make highway changes to allow driverless trucks to bring components to the factory from the Milwaukee airport.
The mandate from use of electronic data loggers (ELDs) on all trucks from the FMCSA take effect on the 18th, though will be somewhat phased in. Impact on capacity and thus rates uncertain from prohibiting drivers from cheating on hours of service rules.
Toy maker Mattel says problems at its new East Coast DC result in failure to meet throughput projections, forced the company to ship goods for East Coast customers from LA and Dallas, adding to logistics costs versus expectations.
Any reaction to this list of the top supply for 2017? What did we miss? Let us know your thoughts at the Feedback section below.
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