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Catagory: Supply Chain Trends and Issues


The Top Supply Chain Stories in 2020 by Month


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Refresh Your Memory of the Supply Chain Year that Was

 
Jan. 18, 2020
SCDigest Editorial Staff
     

In his First Thoughts column last week, SCDigest Editor Dan Gilmore summarized his view of the top 2 supply chain stories for each month of 2020. (See Top 2020 Supply Chain Stories by Month.)

 

Two compile that list, we started with a lot more that were left on the curring room floor due to space reasons. Below you will find the complete list for January through June. Next week will finish the series with July through December.

Supply Chain Digest Says...

 

Gartner releases its top 25 supply chains for 2020, where Cisco tops the list for the first time – though after Apple, Procter & Gamble, McDonald's, Amazon and this year Unilever are classified as "supply chain masters" and not part of the top 25 rankings

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January

California's so-called AB-5 rules go into effect, with a three-part test that would make it very difficult for workers to be classified as contact employees, notably for truckers, putting the whole concept of independent owner-operator at risk. But application of the law to truckers was put on hold by a Federal court, and legal proceedings remain in process. In November, California voters pass measure to largely exempt Uber and Lyft drivers from the rules.

Maersk Line announces it is adding on hefty new surcharges in the face of the higher operating costs from the requirement from the International Maritime Organization (IMO) that started Jan. 1 to use much more expensive low sulfur fuel. The fuel surcharges will be between $50 to $200 per 40-foot container, depending on the shipping lane. Other container carriers soon follow suit.

The US Centers for Disease Control says the country's fertility rate, defined as the number of births a woman is expected to have over her lifetime, has fallen to 1.73, the lowest level in history. A rate of 2.10 births per woman is needed for a generation to replace itself, the CDC says. This trend has seismic economic, societal and supply chain implications

February

FedEx says it will at last combine package deliveries in some circumstances between its Ground and Express (air) businesses, which had operated independently until now. Under the plan, some of the packages from the more time sensitive Express unit will be given to the Ground division for last-mile delivery in residential areas – similar to approach UPS has used for years.

Turnbridge Equities says it will build a new 1.2 million square foot, four story, multi-level distribution center on a 14.2-acre property in the South Bronx. The Bronx Logistics Center will target shippers interested in a last-mile distribution facility, largely for efulfillment. It will offering direct tractor-trailer ramp access to three levels and van access to the fourth level. It will also have rail spur, giving tenants an option to use CSX inbound service from the Oak Point Rail Yard not far away.

In an interview with the New York Times, an executive at Austrian material handling automation vendor Knaap says the company will identify the annual costs for a human order picker and the adjust its cost for a piece-picking distribution center robot accordingly. "We just go lower," the exec said about the company's pricing strategy versus human worker costs. "That's basically the business model. For the customer, it's not very hard to decide."

March

The COVID outbreak starts in the US, with cases in a nursing home new Seattle, and rapidly spreads from the. MHI decides to go ahead with it MODEX trade show in Atlanta starting March 9, even as a few exhibitors pull out and many companies announce travel bans. The show goes on, but the attendee count is way down, and event has strange empty feel and concern about the virus is palpable.

UPS' Flight Forward division last week announces it is partnering with from German startup Wingcopter to develop a series of delivery zones to meet specific applications, literally "take offs" of the company's current drone design, which has a range of 75 miles and can operate in environments with up to 45 mile-per-hour winds. Wingcopter's technical advantage is a design that allows it to switch from hovering and vertical lift to a low-noise forward flight mode, which is better suited to use over populated areas.

Club store giant Costco announces that it will spend $1 billion to acquire last mile delivery company Innovel Solutions from Transform Holdco LLC, the operator of Sears and Kmart stores. Costco said Innovel employs more than 1,500 people and operates 11 distribution centers and more than 100 final-mile cross dock centers. The Seattle-based warehouse-club operator said Innovel provides final-mile delivery and installation for large and bulky products, such as appliances, furniture and mattresses. Costco has been a customer of Innovel since 2015.

April

The virus spreads wildly across US meat processing facilities. Giant Tyson suspends operations at its Columbus Junction, Iowa, pork plant after more than two dozen workers contracted Covid-19 there. JBS USA stoppx operations at its beef plant in Souderton, Pennsylvania, while Smithfield Foods also has more than 600 cases at a facility in South Dakota. This scenario continues for several months.

Amazon pilots the use of a disinfectant fog at a Staten Island fulfillment center after worker infections there.

There are several reports US ports being stuffed with containers, mostly the result of retailers with closed stores refusing or delaying their delivery and causing massive port congestion.

Volkswagen re-opens several European car factories, but workers receive a new employee manual with 100 changes in practices designed to minimize the risk of coronavirus infections.


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CATEGORY SPONSOR: SOFTEON

 

 

May

Amazon Sr. VP of Operations Dave Clark gives 60 Minutes a remote interview and virtual tour of an Amazon FC, including video of workers in hazmat suits spraying surfaces with a misting disinfectant. Clark also touts new portable washing stations that are being deployed in all FCs so workers can wash their hands without needing to walk to a restroom. But Clark says Amazon is behind on its plans to build its own virus testing labs.

The Federal Motor Carrier Safety Administration announces the long-awaited final rule on a slate of proposed changes to Hours of Services rules that grant more flexibility to truck drivers. Many in trucking praised the four revisions that were approved, which included measures associated with the 30-minute rest break and sleeper berth time. Several safety advocates objected to the rule, however, and have pursued legal action.

Gartner releases its top 25 supply chains for 2020, where Cisco tops the list for the first time – though after Apple, Procter & Gamble, McDonald's, Amazon and this year Unilever are classified as "supply chain masters" and not part of the top 25 rankings. The rest of the top 10 after Cisco was (2) Colgate-Palmolive; (3) Johnson & Johnson; (4) Schneider Electric; (5) Nestle; (6) PepsiCo; (7) Alibaba; (8) Intel; (9) Inditex (Zara) and (10) L'Oréal.

June

CSCMP releases its annual State of Logistics report for 2020, based on 2019 data but doing the report's best job yet of incorporating current trends, notably of course in 2020 the impact of the pandemic.

The headline news: what the report several years back started calling US Business Logistics Costs (USBLC) barely rose on an absolute basis in 2019, up just 0.6% to $1.63 trillion, after a much larger run up in 2018.

With a faster rise in US GDP than logistics cost last year, that took the relative cost of logistics as a share of GDP to 7.6%, down from 7.9% in 2018.

In a sign of the changing times, Nike announces its "Consumer Direct Acceleration" (CDA) program. The CDA is a new digitally empowered strategy to sell more directly to consumers rather than through tens of thousands of retailers globally, focusing on just a few dozen instead. Reports are Nike will longer sell to nine major retail partners including Belk, Dillard's, Zappos, Boscov's, Bob's Stores, Fred Meyer, EBLens, VIM and City Blue.

Maersk Lines says it will invest $60 million to launch a new Center for Zero Carbon Shipping, an independent, non-profit research center, it will work across the entire shipping sector with industry, academia, and governments. The goal is to collaborate globally to, accelerate the development of selected decarbonizing fuels and power technologies.


What would you add to our list of top stories of 2020? Let us know your thoughts at the Feedback section below.


 
 

 

 

 

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