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Supply Chain by the Numbers
   
 

- April 29, 2020 -

   
  Supply Chain by the Numbers for April 29, 2020
   
 

UPS Sees Volumes Soar and Profits Fall; Robot Makers Bring Major Investments; Buy Online, Pick Up in Store becoming the New Normal; Record New Containership May not Sail for Awhile     

   
 
 
 
 

40%

That is by how much UPS's main US parcel delivery business saw its operating profits fall in Q1, even as home deliveries soared. In fact, by the end of March, consumer deliveries rose to 70% of the total, versus 54% in 2019. The issue: UPS makes a lot more profit on B2B deliveries. In its earnings report, the parcel giant said its trucks are traveling 10% further per stop and making 15% more stops on their daily routes in the face of soaring home deliveries from locked-down consumer. Consumer packages are also on average 33% lighter than B2B, producing less revenue per delivery than those for the heavier shipments that are destined for businesses. As a result, the company's Q1 profit fell 13% even as revenue increased more than 5%. UPS told investors that in the face of these changes, it is cutting $1 billion from its capital-spending plans in 2020 and suspending stock buybacks for the year.

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$36 Million

That's how much new funding artificial intelligence firm Brain Corp, which provides technology to power a variety of current and future robots in retail, distribution healthcare, airports and more, pulled in this week. And timing is everything. The company has seen a big jump in demand for its robotic floor scrubbers, as companies around the world try need to sanitize their facilities during the coronavirus pandemic. Autonomous usage of BrainOS-powered machines in retail locations in the US spiked 13.6% in March compared to the same month last year, and 13% during the first quarter of this year, according to the firm's data. BrainOS-enabled robots are on track to log more than a quarter million hours of work over the next 30 days. And many believe the virus crisis will accelerate the already powerful trend towards increased use of robotics. As evidence of that, last week. Chinese firm ForwardX Robotics, a maker of mobile robots for distribition also landed funding, saying the new round of $15 million would support its recent expansion into the North American market.


 
 
 
 

208%

That was the rise in the number of orders placed online and picked up at bricks-and-mortar stores by customers between April 1 and April 20 compared with a year ago, according to data pulled from Adobe Analytics. What's more, online sales in the U.S. jumped 49% from March 12 to April 11, compared with a baseline from March 1 to March 11, Adobe said. Retailers did not start widely closing stores due to the pandemic until mid-March. That means many consumers had no choice but to order online. Retailers including as Kohl's, Best Buy, Bed Bath & Beyond and Dick's Sporting Goods have been able to offer the pickup option at certain locations, even at stores closed to inside shopping stores because they have been deemed non-essentiaI businesses. More consequentially, the curbside pickup trend is likely here to stay, according to Naveen Jaggi, the president of Retail Advisory team at commercial real estate firm JLL. He believes shoppers will likely be hesitant to get back to stores, since they've adjusted to being home for so long, he said on CNBC this week.

 
 
 
 

24,000+

That how many TEU the new HMM Algeciras container ship can hold, setting a new record as the world's largest container vessel, surpassing the previous record of a ship with capacity of about 23,500 TEU. South Korean container carrier HMM took possession of the vessel from a Korean shipyard in a ceremony attended by the country's president. Alas, the ship's first ocean voyage out of the docks may be its last, at least for a while. Global container volumes have collapsed, meaning existing megaships, generally defined as those having over 18,000 TEU capacity, are often half empty of worse given the dearth of container freight. The giant ships may also lack a key role as global trade flows changes, trends likely to be exacerbated by the virus crisis, in which more regional movements of somewhat smaller numbers of containers may dominate. That could leaving the hugely expensive megaships idled, or sit at ports for a long time waiting to be filled up. And the giant container ships at least for a while are going to keep coming. Two shipyards in South Korea combined are set to deliver a dozen more 24,000 TEU ships ordered by carriers by year's end.

 
 
 
 
 
 
 
 
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