sc digest
July 13, 2018 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet 1H 2018 in Supply Chain Review bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Distribution Digest
bullet Cartoon Caption Contest Winners Announced bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts



Discover How to Prepare for Careers in Today's Data-Driven World


first thought


Supply Chain Graphic of the Week
Just What Does Last Mile Delivery Really Cost?


No Stopping US Transportation Rates

Manufacturing Jobs Now Offer Security
US Trade Deficit in Goods with China Sets Another Record
Carriers being Hammered by Rising Bunker Fuel Costs


May 29, 2018 Contest

See Who Took Home the Prize!

Feature Story: Target Testing Extreme New Lean-Oriented Store Replenishment Model with "Flow Centers"



Weekly On-Target Newsletter:
July 12, 2018 Edition

Last Chance Cartoon, Amazon Workers, Bunker Fuel Charges, More


Discover the power of creating a global supply chain control tower!


The Three "Ps" of Sales & Operations Planning Success

by Henry Canitz
Product Marketing & Business Development Director


Create A Micro Supply Chain for Each Customer Order

by Martin Verwijmeren
Chief Executive Officer
MP Objects


There's Money in the Material

by Gary M. Barraco
Global Product Marketing
Amber Road



Roughly how much was spent on parcel shipping in the US in 2017?

Answer Found at the
Bottom of the Page

1H 2018 in Supply Chain Review

As always, it seems, it was a very interesting first half of 2018 in the supply chain. Here were what I view as the top three themes and trends:

US tariff actions and threats from the Trump administration clearly were the largest story of the past six months, as friends such as Canada and European countries retaliated, and China promises to aggressively defend its trade interests.

How will this play out? Will a true major trade war breakout? Or will this lead to new agreements that are better for US manufacturing interests? We'll know a lot more by the end of the year.


What did I miss? 1H 2018 in numbers and charts next week.


Send us your
Feedback here

Meanwhile, soaring logistics costs, driven by a shortage of drivers and rising diesel costs, were a growing concern for shippers - and CFOs. Rates are reaching all-time highs and accelerating, as carriers keep raising driver pay but still can't seat enough trucks to increase capacity.

Rising transport and oil costs, plus the strong global economy, are in fact re-introducing inflation into the supply chain for the first time in many years. For example, the Prices Index from ISM registered a very high 76.8 in June, well, well above the 50 mark that indicates a more neutral pricing environment, and indicating higher raw materials prices for the 28th consecutive month.

With that, here are what I see as the top supply chain stories by month in the first half of 2018.


Amazon received US patent for a system that uses ultrasonic communications between storage locations in a DC and special wristbands worn by workers doing putaway and picking activities to automatically verify locations and picks. News generates criticism in some quarters for "big brother" aspects, with a New York Times article on the patent headlined "If Workers Slack Off, the Wristband Will Know."

The Trump administration starts its trade actions by announcing a series of new duties on solar panels and washing machines coming into the US. Later come tariffs on steel and aluminum imports, then a broad array of other imports from China, spurring retaliatory actions.

China unveils plans for a "Polar Silk Road" across the Arctic by developing shipping lanes opened up by global warming and which could significantly reduce transit times versus going through the Suez Canal on some routes. The news draws concern from some countries in the region over China's long-term strategic objectives.


KFC in the UK forced to shutter some 700 of its 870 outlets in the country for one of more days after a supply chain snafu - caused it appears by switching to a new single food distributor there versus a less decentralized approach in the past. The new DC just couldn't get chicken out the door and to the restaurants.

Truck manufacturing giant Daimler threw a little shade at rival Tesla's announced plans for bringing electric semis to market, saying 2021 was a lot more realistic timeline than the 2019 schedule Tesla has promised. "The laws of physics still apply," Daimler says, in terms of the delivery range of electric powered big rigs.

The American Trucking Associations calls for a national 20-cent per gallon additional federal tax per gallon on gas, diesel, and equivalent natural gas sales in the US to fund an additional investment of $340 billion over ten years for infrastructure spending.

Amazon announced new "Shipping with Amazon" (SWA) services, where it will take shipments directly from the facilities of its Marketplace customers into its network for delivery. Expectation is this will lower shipping costs by leveraging Amazon's network and scale, and gives Amazon added benefit of keeping additional SKUs out of its maxed out fulfillment centers.


UPS London announces some form of breakthrough in recharging electric delivery trucks simultaneously overnight without requiring an expensive revamp of its electric grid. As a result, UPS says its fleet of electric route trucks will grow for a current 52 to some 170 over the next few years. UPS said that this marked the "beginning of the end" of the reliance on internal combustion engines.

Walmart says it will expand the number of US markets with same day grocery delivery from the current six to 100 by the end of the year. After Walmart packs the order, it will be handed off to a third-party delivery company or startup that uses contract workers to ship orders to homes.

Amazon receives patents for use of an on-demand air bag to protect parcels being dropped from the sky by drones, and separately for a delivery drone that can respond to human gestures and change is own behavior depending on whether the customer appears satisfied, angry, etc.

Uber stops - for now - autonomous car and truck testing after an autonomous vehicle, with a back-up driver inside, strikes and kills a woman in a crosswalk. It is believed to be the first highway fatality ever involving a pedestrian struck by an autonomous vehicle on a public road - but doesn't seem to have much of an impact on self-driving vehicle research overall.

Reports that that apparel retailer Zara is piloting an automated system that will enable shoppers who have ordered items on-line for pick-up in store where the consumer scans or enters a code, triggering a behind-the-scenes "robot" to search for the customer's package in a small warehouse, and then deliver it quickly to a drop box on the outside of the store.


The International Maritime Organization announces new rules for sulfur emissions from ocean cargo ships that will require ship owners to either move to a much more costly low sulfur fuel or install very expensive scrubbers by January, 2020. Either way carrier costs will go way up, with the CEO of one Japanese carriers saying some carriers will go bust as a result.

Amazon says there are now 37 US cities where its new Amazon Key In-Car is available, in which an Amazon delivery person Amazon enters a code into a mobile app to unlock the car, then places the order in the trunk, shuts the door, then used the app again to lock the car through the Satellite service.

The Federal Motor Carrier Association begins real enforcement of its mandate that all truck drivers use electronic logging devices to prevent cheating on hours of service rules possible with manual logs. Estimates on effective US trucking capacity vary from minor to significant.

An advisory panel of the National Academies of Science, Engineering, and Medicine (NAS) issues an interim report outlining the substantial additional research it says is needed before heavier and/or longer trucks are allowed on US highways, likely meaning it will be years before either change is again considered.

California Supreme Court made it much harder for employers to classify their workers as independent contractors in a decision that in supply chain could impact truck drivers, Amazon delivery personnel, and much more.


News that Target is piloting a new distribution center in New Jersey that will ship smaller quantities to stores more frequently, seeking to reduce the DC to store replenishment cycle from days to hours and reduce inventory at stores at the same time, especially at its new small-format stores in urban markets. Target calls this a "flow center."

US grocery giant Kroger announced it had signed an exclusive deal with UK online supermarket Ocado to use its distribution technology in the United States. Ocado had developed a unique robotic picking system for ecommerce for its own use, then began marketing the technology to others. The companies will identify three sites in 2018 for development of new Kroger "automated warehouse facilities" in the United States.

In move to spur US research, the US Department of Transportation announces 10 winners of permits for more advanced commercial drone tests, many involving supply chain-related applications and most partnerships between drone technology developers and other businesses/organizations. Notably, Google and Uber are in and Amazon is out of this round of testing.

Gartner releases it Top 25 Supply Chains list for 2018. After putting Apple, Procter & Gamble, Amazon and McDonald's in a sort of hall of fame category, Unilever tops the list for third year in a row, with Inditex/Zara, Cisco, Colgate-Palmolive and Intel rounding out the top 5.

CSCMP and shipper organization NASSTRAC announce a partnership under which NASSTRAC becomes an independent subsidiary of CSCMP, with a merger of their respective conferences starting in 2019. Move puts CSCMP for the first time in the government advocacy role, one of the services NASSTRAC performance for members.


The Cass Linehaul Index finds year over year per mile truckload rates in May were up 9% - the largest single monthly jump since the index was launched in January 2005.

CSCMP and AT Kearney release the 2018 State of Logistics Report, with the headline news that absolute US logistics spend was up 6.2% in 2017, to $1.49 trillion. But with decent economic growth last year, logistics costs as a percent of GDP were up just a tick to 7.7%.

Home Depot announces plans to create 170 new more local distribution points in US over next 5 years, at a cost of $1.2 billion, to support same day or next day deliveries for ecommerce orders.

Google makes $550 million investment in, China's second largest ecommerce platform, showing it intends to become a major player in on-line retail.

UPS and the Teamsters agree on a tentative new 5 year contract, pending a full union vote, seemingly ending the chance for a strike when the current pact ends July 31. Union get a decent pay hike over the contract term, while UPS gets a new class of drivers that can work weekends. Meanwhile, earlier in the month labor and management at East Coast and Gulf Coast ports reached tentative agreement on a six-year contract renewal.

What did I miss? 1H 2018 in numbers and charts next week.

Any reaction this 1H timeline? What did we miss? Let us know your thoughts at the Feedback button below.


On Demand Videocast:

Digitizing the Order Management Process

Orders Still come in Many Different Forms and Systems - Here's How to Get them Under Digital Control

This videocast discusses breaks down all the ways in which orders can arrive, the downstream challenges associated with each, and the benefits of digitization.

Featuring Dan Gilmore, Editor along with Esker's Sarah Joiner.

Now Available On Demand

On Demand Videocast:

Reducing Costs through Automated Inventory Replenishment & Analytics

How Motor City Industrial Taps into Data Visualization to Help Customers Identify Waste, Reduce Inventory

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor along with Joseph Stephens, CEO, Motor City Industrial, Jay Fielder, Supply Chain Technology Manager, Motor City Industrial and Mike Wills, Chief Revenue Officer, Apex Supply Chain Technologies.

Now Available On Demand

On Demand Videocast:

Yes, Retailers and Distributors Can Survive and Thrive by Unifying Commerce and Supply Chain

Integrated Approach will Improve Customer Experience as Smart Retailers Move Beyond Omnichannel

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor and enVista CEO Jim Barnes, a highly recognized industry expert on retail and distribution.

Now Available On Demand


We had a couple of good questions from our video interview with Jessica Butler, on the new report on trends in retail chargebacks from her company, Attain Consulting Group. See the questions and the responses below.

Feedback on 2018 Retail Deductions Study:


I was watching your update Monday on Trends in Retail Chargebacks.
I was surprised to hear that on time delivery was not ranked higher in the non-trade chargeback area.
Many of the grocery customer have put in new fees/fines similar to Walmart OTIF.
In this transportation environment, I would have expected a bigger impact here.
What are your thoughts?

Deb Schultz
Director, Transportation
Post Consumer Brands

Editor's Note:

I am not completely sure, but I believe the ranking was simply on most common occurrences. So, especially in apparel, having picking/packing errors in so-called split case cartons (different SKUs in one shipping carton) is relatively common, and thus it would not surprise me if that was more common than late shipments.

Think that is a reasonable explanation.

Dan Gilmore


What technology was Jessica referring to that can automate managing deductions for organizations?

Ashley Sobieck
Customer Compliance Manager
Perrigo Company plc


Response from Jessica Butler:

There are a number of different cloud-based technology tools out there that can automate various parts of the deduction management process. The tool that I feel is the most flexible and offers the most functionality is from HighRadius Corporation. They have a variety of different solutions across the entire AR process. Some of the deduction-related automation features include:

• Cash application pre-processing with customer specific rules to code deductions based on different customer remittance information
• Automatically retrieving claim documentation and PODs from customer & carrier portals and/or emails, eliminating manual effort associated with retrieving backup
• Creating 'pre-deductions' from claim documentation even before deductions have been received - allowing analysts to get a jump start on validation / research activities
• Centralized cloud-based portal to track deductions, upload documentation, add notes, route to various users, approval workflow

• Ability to automate dispute process on both customer portals and/or via email / fax / postal mail

o Auto populate / post disputes on customer portals for those who require disputes to be done via portal
o Auto generate customer correspondence to be emailed / faxed / mailed for things such as disputes, request for additional back up





Q: Roughly how much was spent on parcel shipping in the US in 2017?

A: $99 billion, according to estimates in the recently released 2018 State of Logistics Report.

© SupplyChainDigest™ 2003-2018. All Rights Reserved.
PO Box 714
Springboro, Ohio 45066