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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

Jan. 15, 2021

Top 2020 Supply Chain Stories by Month

In a Year Dominated by COVID-19, there was Still a Lot of Important News

Last week, I looked at the top supply chain themes and trends of 2020 - a list of course dominated by pandemic-related changes. (See Top Supply Chain Themes and Trends of 2020.)

This week, as I do every year, I present a curated list of the past year's top two supply chain and logistics stories fpr each month.


I actually assembled many more, but didn't have room for all. The full list will be available next week in our OnTarget e-newsletter Wednesday.

Gilmore Says....

Next week, we close out our 2020 review with a look at the year in numbers and charts.

What do you say?

Click here to send us your comments


California's so-called AB-5 rules go into effect, with a three part test that would make it very difficult for workers to be classified as contact employees, notably for truckers, putting the whole concept of independent owner-operator at risk. But application of law to truckers was put on hold by a Federal court, and legal proceedings remain in process. In November, California voters pass measure to largely exempt Uber and Lyft drivers from the rules.

Maersk Line announces it is adding on hefty new surcharges in the face of the higher operating costs from the requirement from the International Maritime Organization (IMO) that started January 1 to use much more expensive low sulfur fuel. The fuel surcharges will be between $50 to $200 per 40-foot container, depending on the shipping lane. Other container carriers soon follow suit.


FedEx says it will at last combine package deliveries in some circumstances between its Ground and Express (air) businesses, which had operated independently until now. Under the plan, some of the packages from the more time sensitive Express unit will be given to the Ground division for last-mile delivery in residential areas – similar to approach UPS has used for years.

Turnbridge Equities says it will build a new 1.2 million square foot, four story, multi-level distribution center on a 14.2-acre property in the South Bronx. The Bronx Logistics Center will target shippers interested in a last-mile distribution facility, largely for efulfillment. It will offering direct tractor-trailer ramp access to three levels and van access to the fourth level.


The COVID outbreak starts in the US, with cases in a nursing home new Seattle, and rapidly spreads from there. MHI decides to go ahead with it MODEX trade show in Atlanta starting March 9, even as a few exhibitors pull out and many companies announce travel bans. The show goes on, but the attendee count is way down, and event has strange empty feel, as concern about the virus is palpable.

UPS' Flight Forward division announces it is partnering with German startup Wingcopter to develop a series of delivery drones to meet specific applications, literally "take offs" of the company's current drone design, which has a range of 75 miles and can operate in environments with up to 45 mile-per-hour winds. Wingcopter's technical advantage is a design that allows it to switch from hovering and vertical lift to a low-noise forward flight mode, which is better suited to use over populated areas.


The virus spreads wildly across US meat processing facilities. Giant Tyson suspends operations at its Columbus Junction, Iowa, pork plant after more than two dozen workers contract Covid-19 there. JBS USA stopped operations at its beef plant in Souderton, Pennsylvania, while Smithfield Foods also has more than 600 cases at a facility in South Dakota. This scenario continues for several months.

Volkswagen re-opens several European car factories, but workers receive a new employee manual with 100 changes in practices designed to minimize the risk of coronavirus infections.


The Federal Motor Carrier Safety Administration announces the long-awaited final rule on a slate of proposed changes to Hours of Services rules that grant more flexibility to truck drivers. Many in trucking praised the four revisions that were approved, which included measures associated with the 30-minute rest break and sleeper berth time. Several safety advocates objected to the rule, however, and have pursued legal action.

Gartner releases its top 25 supply chains for 2020, where Cisco tops the list for the first time – though after Apple, Procter & Gamble, McDonald's, Amazon and this year Unilever are classified as "supply chain masters" and not part of the top 25 rankings. The rest of the top 10 after Cisco was (2) Colgate-Palmolive; (3) Johnson & Johnson; (4) Schneider Electric; (5) Nestle; (6) PepsiCo; (7) Alibaba; (8) Intel; (9) Inditex (Zara) and (10) L'Oreal.


CSCMP releases its annual State of Logistics report for 2020, based on 2019 data but doing the report's best job yet of incorporating current trends, notably of course in 2020 the impact of the pandemic.

The headline news: what the report several years back started calling US Business Logistics Costs (USBLC) barely rose on an absolute basis, up just 0.6% to $1.63 trillion, after a much larger run up in 2018. With a faster rise in US GDP than logistics cost last year, that took the relative cost of logistics as a share of GDP to 7.6%, down from 7.9% in 2018.

In a sign of the changing times, Nike announces its "Consumer Direct Acceleration" (CDA) program. The CDA is a new digitally empowered strategy to sell more directly to consumers rather than through tens of thousands of retailers globally, focusing on just a few dozen retailers instead.


The US ends its $800.00 threshold under which imported goods could pass into the US tax-free, and for which the amount of information that was required for customs agents monitoring incoming shipments for counterfeit goods, consumer-safety violations and other illegal behavior was also limited. Since the original law was passed, there has been a dramatic rise in the number of low-value shipment coming into the US under the tax-free rule, and many also avoided new US tariffs.

A study by researchers at the University of Central Arkansas estimates that 300,000 US truck drivers will be taken off the road if the government uses hair testing to look for drug use. The elimination of that many drivers would have a huge impact on the on-going driver shortage, despite the good of eliminating drug using drivers. It would also represent almost 10% of the total driver population. Many large carriers already use hair testing, but few smaller ones do.


MHI announces it has acquired the Warehousing Education and Research Council (WERC). MHI plans to operate WERC as a division of MHI. WERC was founded in 1977, but was struggling financially in recent years. The move will support MHI's clear desire to build more of a presence with individual logistics professionals beyond the materials handling companies that make up its membership currently.

State-owned China Railway reports that a total of 1,232 trains were dispatched from various Chinese cities to European destinations in July. That was the highest monthly figure ever, and an increase of 68% year-over-year, as volumes continue to grow rapidly.


Bloomberg report that Amazon plans to open 1,000 or even more small delivery hubs in cities and suburbs all over the country. The facilities will be mini-fulfilment centers, and serve as what Amazon calls "delivery stations," where its own local delivery drives come to pick up their deliveries for the day.

Eventually the number these local facilities could rise to as many as 1,500, as Amazon aims to move inventory closer to customers.

Amid soaring rates for container shipping, reports are that Chinese government officials are pressuring the ocean carriers to put a ceiling on rates and end cancelled sailings, concerned rising shipping costs will hurt exports. Maersk says it will bring back voided sailings in October – but rates keep rising anyway.


Amazon said it will attempt to hire 100,000 temp workers for this year's peak season in the US and Canada. That makes it the fourth hiring spree Amazon has announced for the United States this year. Amazon has already announced 100,000 and 75,000 new fulfillment jobs in March and April, respectively, during the early weeks of the COVID-19 outbreak. In September, the company said it would fill 100,000 additional permanent jobs.

Procter & Gamble shareholders overwhelmingly approved a resolution put forward by Green Century Equity Fund that calls on the company to report on how and whether it can eliminate deforestation and forest degradation from its supply chain. That despite management's opposition to the measure.


In somewhat surprising news, supply chain design software and analytics vendor LLamasoft is acquired for $1.5 billion by procurement software provider Coupa.

Reports that UPS has stopped picking up parcels for at least six retailers that have exceeded their volume forecasts. The retailers include Gap, Nike, LL Bean, Hot Topic, Newegg, and Macy's, and offers evidence soaring ecommerce order are stretching the networks of parcel carriers to the limit and likely beyond.


Walmart says it is removing the $35 free shipping order minimum on its annual subscription service, Walmart Plus. The new policy takes effect on December 4th, and it means all Walmart Plus members will receive free next-day and two-day shipping on items ordered from Walmart's website, regardless of the size of their order.

The FAA relaxes some rules on commercial drone deliveries, mostly notably ending the current ban on drones flying over people, changes would could at last spur real progress in the sector.


Next week, we close out our 2020 review with a look at the year in numbers and charts.

Anything to add to our list of key 2020 news stories? Let us know your thoughts at the Feedback button (email) or section below.

Your Comments/Feedback.




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