Supply Chain by the Numbers

- Dec. 5, 2019 -

  Supply Chain by the Numbers for Dec. 5, 2019

Here Come the Cargo Bikes; Rail Carriers Rapidly Shedding Workers; Target Really Leverages Stores for Fulfillment; US Purchasing Index Below 50 Mark Yet Again



That's about how many new age electric "cargo bikes" are now allowed to operate in Manhattan in a test program, the New York Times reported this week. The delivery vehicles operated by Amazon, UPS and DHL are allowed to park in hundreds of existing commercial loading areas that are typically reserved for trucks and vans. The cargo bikes also not have to pay parking meters the way normal delivery trucks do. The move of course is designed to both reduce growing congestion in the Big Apple from soaring deliveries tied to ecommerce, meal delivery, etc., and also to reduce associated pollution and CO2 emissions. Certain smaller types of cargo bikes are also allowed to park right on wider sidewalks, and all the cargo bikes can move along the Manhattan's network of more than 1,400 miles of bike lanes – very handy in the frequent periods of major congestion. New York is actually a bit late to the game, as Paris, London, Dublin and other Euro cities have already approved and encouraged such bike deliveries. UPS in fact operates dozens of cargo bikes in more than 30 cities, the Times reports. The article notes that in Dublin, UPS uses cargo bikes to pick up packages for delivery from a container on the street that serves as an "urban eco package hub."



That is the rather significant decrease in total employment at US class I railroads through October from the previous year, according to Surface Transportation Board (STB) data. That is across the seven rail carriers considered class I providers, including two Canadian carriers operating in the US. Some of the workforce reductions in the rail sector come as many of the carriers have embraced so-called precision scheduled railroading (PSR), a technique to reduce waste in railroad operations pushed aggressively by the late Hunter Harrison as CEO of Canadian Railways, Canadian National, and finally CSX. The labor unions surely think so.
"Mass layoffs have been a disturbing and central component of PSR operations… Railroads may want us to believe these workers are extraneous, but it has become clear that reductions are simply about cutting costs, even if those cuts result in the degradation of safety," said in a late October policy statement from the Transportation Trades Department arm of the AFL-CIO, which is a coalition of 33 member unions. The TTD added that "Workers who remain have been forced to do more with less, and are faced with discipline or dismissal if they refuse to comply. The consequences of these choices are no longer hypothetical."



That is the percentage of on-line orders that Target fulfills from its stores, not one of its distribution centers. Given its huge volume of ecommerce business, that is quite a feat indeed. At one store in Brooklyn, for example, about 80 workers handle web order fulfillment, picking products from shelves or packing them into shipping cartons in the backroom. Target in fact has transformed its in-store workforce, now training workers to be very knowledgeable in a merchandise section such as sporting goods or toys.
Shelf replenishment is also done in prime hours instead of off-shifts as in the past, so workers can answer customer questions. Target has also created pick path logic on wireless devices to make workers picking product far on-line more efficient.
While rival Walmart has pushed "buy on-line, pick up in store" as a key strategy, it does some store-based fulfillment but relatively little compared to Target. SCDigest notes that in the grocery sector, some chains are increasingly looking at new types of automation for backroom fulfillment.



That was the November reading for the monthly Purchasing Managers Index released early this week by the Institute for Supply Management. That makes it four straight months the index has been below the key 50 mark that separates manufacturing expansion from contraction. In fact, the index actually dropped two tenths of a percent point from the 48.3 level seen in October. However, the data from ISM overall indicated that US economy grew for another new record 127th consecutive month, and also found that US real GDP growth in November climbed a modest but nevertheless positive 1.5% on an annualized basis. But the New Orders Index saw a score of 47.2, a decrease of 1.9 percentage points from the October and a bearish sign on future manufacturing activity. Of the 18 manufacturing industries tracked by ISM, just five reported growth in November, with 13 seeing contraction and one sector flat.

y us t .