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Chain by the Numbers |
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- April 4, 2024
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UPS Takes USPS Air Busines from FedEx; US Manfacturing Finally Expands in March; Amazon Ending "Just Walk Out" in Grocery; Amazon Effort to Ship without using a Carton |
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$1.73 Billion |
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| That’s about how much annual revenue FedEx realized from its air cargo contract with the United States Postal Service, making the USPS FedEx's largest customer. Well that has changed. This week, UPS announced it had won the government contract, after it had been held by FedEx for more than 20 years. FedEx had said it was prepared to walk away from the relationship if the terms of the existing contract, set to expire on Sept. 29, did not improve, as it focuses and profitability. And the USPS business has been in decline, down from $2.4 billion in fiscal 2020. In part, the drop comes as the USPS is reorganizing its operations to accommodate customers who are adopting Amazon’s strategy of moving distribution centers closer to consumers. That proximity means that fast deliveries have less need for air services. |
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That was the level of the US Purchasing Managers Index (PMI) for March, as released Monday by the Institute for Supply Management (ISM). That is significant, as it puts the PMI just over the key 50 mark that separates US manufacturing expansion from contraction. And it exceeded that 50 level after 16 straight months of US manufacturing contraction. The other PMI numbers we track were mixed but mostly positive. That starts with the New Order Index, which moved back into expansion territory at 51.4, that being 2.2 percentage points higher than the 49.2 recorded in February, in a good sign for future US manufacturing activity. |
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11.3% |
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That is the share of Amazon shipments worldwide that were delivered in original manufacturer packaging. The company has yet to release its 2023 figure for the program designed to get rid of Amazon’s signature brown box and is called Ships in Product Packaging. That according to a story this week on the CNBC web site. In fact, last year, the US overall went through enough cardboard boxes for shipping to pave a one-mile-wide road from New York City to Los Angeles three times over. As part of the program, Amazon identifies products that could be candidates, contacts vendors and then, to ensure that packages won’t be damaged during delivery, Amazon works with those companies to test products in a lab. Packages need to be able to survive drops off a conveyor belt, vibrations and shaking on the truck or the delivery person accidentally dropping the package while walking to the door. Alas, for all this it seems only useful for single item shipments. |
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That’s how many virtual cashiers in India were needed to support Amazon’s Just Walk Out automated self-check out technology in use in Amazon’s Amazon Fresh grocery stores. Now, Just Walk Out is being scuttled, to be replaced by scanners and screens embedded in the shopping cart called Dash Carts. In 2018, Amazon started rolling out its Just Walk Out system, which was meant to revolutionize the retail experience with AI. According to The Information, the technology was simply too slow and too expensive to implement, with outsourced cashiers reportedly taking hours to send back data so customers could get their receipts. Just Walk Out technology will continue to be offered in Amazon Go convenience stores.
