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  First Thoughts

    Dan Gilmore

    Editor

    Supply Chain Digest



 
July 9, 2021

Top Supply Chain Stories by Month 1H 2021

 

It was an Eventful Six Months, to Say the Least



It was truly a crazy year first half year in supply chain - from shortages of everything to a ship stuck in the Suex Canal.

We will have more on all that next week. Here, my choices for the top supply chain stories by month in the first half of the 2021.  Here we go:

Gilmore Says....

There were many other important stories so far this year - what did I leave out?

What do you say?

Click here to send us your comments
 

January

In surprising news, Rick Blasgen, CEO of the Council of Supply Chain Management Professionals (CSCM), announces his plan to retire in March. Blasgen, a former supply chain executive at Conagra and others, had run CSCMP since 2005. The CSCMP board of directors names Mark Baxa, a previous chairman of the CSCMP board and current CEO of FerniaCreek Global Supply Chain Consulting Group, as interim CEO. There is surely some back story here, but I never pursued it.

UPS announces its plan to exit its LTL business with sale of its UPS Freight unit to Canadian logistics firm TFI International for about $800 million, a seemingly low number that was just one fourth of UPS Freight's estimated 2020 revenue of about $3.15 billion. The move allows UPS to shed itself of a low growth business and concentrate its investments in the parcel market while giving TFI an immediate strong presence in the US.

February

Sports gear maker Under Armour says it will stop selling through as many as 3000 current retail customers by the end of 2021, as the company puts more focus on its direct to consumer business. As such, Under Armour is mirroring rival Nike's strategy, as Nike a couple of years ago announced plans to cut it retail channels globally from some 36,000 to a few dozen. Last June, Nike also announced a Consumer Direct Acceleration program - the term says it all. Under Armour said the retail channel reductions would still leave it with 10,000 retailers by the end of 2022, but the direction is clear.

JB Hunt announce it will jump into digital freight brokerage in deal with Google, leveraging its artificial intelligence technology. Under the deal, Google and JB Hunt say they have agreed to form a "strategic alliance" to improve existing US supply chains and transport networks. JB Hunt will work with Google to develop machine-learning tools to improve matches between shippers and carriers on JB Hunt's existing 360 platform, hoping to enable shippers get an accurate view of freight market supply and demand days in advance.

March

Canadian Pacific Railway and Kansas City Southern Railway announce they will merge as part of a $25 billion deal that will create a rail freight network that spans Canada to Mexico. Or so it seems. Not long after, Canadian National announces a larger $33 billion offer. There is some drama, but Canadian National ultimately prevails, but it is still a question if US regulators will let the deal go through.

News that Amazon is using video cameras to monitor its own delivery driver at all times, even drivers actually employed by independent Amazon Delivery Service Partners. In fact, Amazon delivery drivers in the US now have to sign "biometric consent" forms to continue working for the retailing giant. The data that drivers must consent to have collected includes photographs used to verify their identity; vehicle location and movements (including "miles driven, speed, acceleration, braking, turns, following distance"); "potential traffic violations" (like speeding, failure to stop at stop signs, and undone seatbelts); and "potentially risky driver behavior, such as distracted driving or drowsy driving."

In a crazy mishap, a large container ship from Japan's Evergreen line gets turned almost sideways entering the Suez Canal from the Red Sea and becomes stuck. About a quarter mile long (400 meters) and weighing in at 200,000 tons, the ship's sheer size overwhelms efforts to dig it out. The ship remains stuck for six days, with 400 cargo vessels waiting at sea for the blockage to end. Canal owner Egypt holds the Even Given and its 25 crew members until just last week, due to wrangling over compensation for the accident. It took a $550 million payment in the end from Evergreen and its insurers to free the ship.

April

In an intensely watched action, workers at an Amazon fulfillment center in Bessemer, AL overwhelmingly vote not to join the Retail, Wholesale and Department Store Union. By a margin of 71% to 29%, workers said no to unionization after a mail in voting period of more than a month instead of the usual in-person vote, necessitated by COVID-19 concerns - and keeps Amazon's US facilities free of unions. Many pro-labor forces expected a vote to organize that could serve as a catalyst for union votes at Amazon FCs across the country.

In its Q1 2021 shareholder deck, the Tesla says that the much anticipated all-electric Tesla Semi is now set to finally be on the road later this year. In January, CEO Elon Musk had said that the Tesla Semi was ready for production, but that the company was having difficulties manufacturing enough 4680 battery cells to power the rigs. However, Tesla's shareholder report says that concerns surrounding the battery for the Model Y car have been resolved, and that Tesla Semi trucks will see deliveries in 2021 to some companies that have pre-ordered them.

UPS announces its plan to acquire delivery drones from a company called BETA Technologies. But these are not small parcel carrying aircraft. Instead, they are capable of carrying as much as 1400 pounds. UPS says the new drones will quickly transport deliveries that would otherwise fly on small fixed wing airplanes. The drones will come with a 250-mile range and cruising speed of up to 170 miles per hour. The UPS significant range of the aircraft will be capable of conducting series of short routes or one long route on a single charge.

May

Gartner releases its top 25 supply chains list for 2021. This year Cisco Systems comes out on top for the second year in a row - sort of. I put it that way because again in 2021, Apple, Procter & Gamble, Amazon, McDonald's and Unilever were left off the formal top 25, as those five companies have been placed in a separate relatively category called "supply chain masters," a sort of supply chain hall of fame. The rest of the top 10 after Cisco were (2) Colgate-Palmolive; (3) Johnson & Johnson; (4) Schneider Electric; and (5) Nestle.

Researchers at North Carolina State claim an RFID chip breakthrough, with a design that will cost under one cent to produce at scale. The key is the small size of each chip. The smaller the chip, the more chips you can get from a single silicon wafer. Realizing more chips from the silicon wafer, the less expensive they are to produce each one. We'll see if it turns into reality, but it could really change the RFID ROI if it does.

The Colonial Pipeline Company reports that it was the victim of a cybersecurity attack that involves ransomware, forcing the company to take some systems offline and disabling its pipeline. The Georgia-based company operates the largest petroleum pipeline in the United States, carrying 2.5 million barrels a day of gasoline, diesel, heating oil, and jet fuel on its 5,500-mile route from Texas to New Jersey. The pipeline closure shuts down many East coast gas stations for days - and leads to questions on the cyber security of US infrastructure systems.

June

Kroger launches its first drone delivery test from a store in Centerville, OH, south of Dayton. Per FAA regulations, the deliveries will be limited to areas within one mile of the store. For the first pilot program, no charge will be levied for these flights, Kroger said. But that's temporary. At some point, there will be delivery charges for the service.

CSCMP and Kearney release the 2021 State of Logistics report. The headline news: what the report several years back started calling US Business Logistics Costs (USBLC) fell sharply on an absolute basis in 2020, down 4.0% to $1.55 trillion. With a smaller decrease in US GDP (-3.5%) than logistics cost fell last year, that took the relative cost of logistics as a share of GDP to 7.44%, down bit from 7.57% in 2019 - versus 8.59% in 2007,

News that FedEx Freight, the company's less-than-truckload segment, had suspended service to approximately 1400 customers due to strains in its network from rising shipment volumes. The move left many shippers in a lurch, with some complaining of little notice of the service suspension. Within a few weeks, FedEx says it had restored service to some of those dropped shippers, but not all.

 

So there you go. There were many other important stories so far this year - what did I leave out?


Any  other top supply chain stories in the first half of 2021?  Let us know your thoughts at the Feedback section below.

Your Comments/Feedback

 
 
 
 
 
 
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