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Supply
Chain by the Numbers |
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- Aug. 25, 2017 -
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Walmart eCommerce Sales Soar, Looks to Vendors for Expense Offset; Chinese Autonomous Truck Company Testing in Arizona; Truckloads Rates Finally Headed Up; Food Companies Signing Up for Blockchain Tests |
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60% |
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| That was the rise in Walmart's ecommerce sales in its most recent quarter, according to its earnings report last week. However, much of that growth is coming as a result of its acquisitions of Jet.com, and smaller etailers such as ModCloth, Moosejaw and ShoeBuy, not from purely organic growth as is the case with Amazon. The Walmart news on the brick and mortar side was also positive, with same store US sales up a strong 1.8%, the 12th consecutive quarterly increase in that metric. But Walmart is finding like Amazon that it takes a ton of investment to drive that growth, and as usual Walmart is in part looking to its vendors to fund its initiatives. Walmart over the past year has used automation to replace some jobs and laid off more than 1,000 corporate employees. It has also pressured vendors to cut their prices, increased the fees they pay to pass inventory through its distribution centers and narrowed the shipping window suppliers must hit to avoid fines. "We are not at the place we want to be from an expense standpoint," Walmart finance chief Brett Biggs. The Walmart-Amazon battle is really heating up. |
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That's how many month in a row that the Cass Linehaul Index – which measures over the road US truckload rates per mile before fuel surcharges and other accessorials – has been up year over year, with the recently announced increase of 2.3% in July. The now four-month string comes after an amazing 13 consecutive months of year-over-year declines in rates that ended in April. That has led Cass' partner in the monthly report, Broughton Capital, to modestly change its forecast for full year changes in truckload rates from 1% to 2%, to 0% to 2%. By the way, at a current index level of 125.3 versus a baseline 100 score for January 2005, it means US truckload rates have risen about 1.75 annually since then.
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10 |
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That's how many companies have 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. The goal is to increase visibility and reduce risk. Participants in the test include Nestle, Unilever, Kroger, McCormick & Company, Dole Foods, Golden State Foods, Driscoll's, distributor McLane, and Tyson Foods. They all join Walmart, which began a blockchain pilot with IBM last year. Walmart has said that in the trials the time it took to trace the movement of mangoes fell to 2.2 seconds from about seven days without blockchain. It added that a single product recall could cost anything from tens of thousands to millions of dollars in lost sales – a risk block chain may be able to reduce through better visibility and awareness of emerging supply chain issues. The scale of a given recall might also be reduced from the improved visibility and traceability.
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That is the current range of autonomous trucks that Chinese company TuSimple will soon test in the Arizona desert. The company says it chose a site near Tucson because of Arizona laws that allow the for the testing of autonomous vehicles on public roads – which has been an issue for some Silicon Valley companies in California – and because of the lower cost of living and proximity to a skilled workforce. The company will operate out of a warehouse on the west side of the city with as many as 30 engineers rotating between Tuscon and an office the company has in San Diego. TuSimple plans to begin testing its vehicles on Arizona highways within months. The company is ultimately working toward completely autonomous vehicles, but plans to test current technologies with drivers in the cab, building up millions of test miles to prove the safety of self-driving vehicles. With all these companies and billions of dollars chasing self-driving trucks, it seems they really will be here someday, and maybe soon.
