Logistically Minded: Supply chain ends 2016 on high note, 2017 looks bright
A weekly guide to the shifting supply chain landscape
Supply chains are constantly changing as new rules, technologies, resources and market trends transform operations. Here's a skim of the week's indexes, technology announcements, expansions and M&As from around the web.
In Case You Missed It
- 2016 was a year of change for the supply chain, 6 stories explain why.
- High-performers in procurement consistently display seven traits, here they are.
- Technology will change the way supply chain pros do their jobs.
Low freight rates and consumer spending may have plagued much of 2016, but November statistics indicate the year may end on a positive note, setting 2017 up for success.
Citing a healthy economy, the Federal Reserve raised interest rates for only the second time in a decade. The increase in the fed funds rate coincided with the Bureau of Labor Statistics' report that the consumer price index rose 0.2% in November, marking the fourth consecutive month of increasing prices.
Meanwhile, the Obama Administration boasts it will leave office with the extremely low levels of unemployment as jobless claims fell 4,000 to 254,000 by Dec. 10.
U.S. manufacturing is thriving as well.
Industrial output has returned to pre-recession levels, The Wall Street Journal reports, and inventory levels are consistently declining. That said, President-elect Donald Trump's pledge to revitalize American manufacturing jobs will be met with a very real challenge: despite growth in output, 20% of jobs that left during the recession have yet to come back, according to the Journal.
The logistics industry will end the year on a good note as well.
The American Trucking Associations noted an 8.2% jump in their For-Hire Truck Tonnage Index; meanwhile a DAT analysis on Overdrive shows vans and flatbed spot rates are rising despite the season's adverse weather. In addition, ACT Research found net heavy-duty truck orders rose in November for the first time in 22 months, DC Velocity reports.
Finally, the Global Cold Chain Alliance and the International Association of Refrigerated Warehouses released their 2016 Cold Storage Capacity in the United States report, estimating total refrigerated storage capacity reached 4.17 billion cubic feet, which marks a 3% increase in capacity since October 2013.
For the third year, FedEx will host up to six startups in Memphis, TN, as part of its EPIcenter Logistics Innovation Accelerator program. The 2017 topics for innovation include last-mile delivery, data-driven supply chain management, artificial intelligence, the Internet of Things, smart packaging, robotics, additive manufacturing and location or context-based services, the Memphis Business Journal reports.
Wal-Mart has long been a pioneer in corporate fleet management, and the company took another innovative step last week: truckers for the company will test an in-cab camera in order to protect its drivers from lawsuits, Arkansas Online reports.
Titanium Transportation too will install smart devices on its trailers — except the Canadian company will be testing BlackBerry Radar, a location monitoring system, on its assets to boost utilization, DC Velocity reports.
Edison, NJ-based e-commerce fulfillment company Dotcom Distribution unveiled a new materials handling system, created by Hytrol Conveyor and Conveyor Handling, which would automate shipping label placement and dimensional weight calculations for the company.
Xenia, OH-based SAS Automation recently launched a new inventory tooling app in Dusseldorf, Germany that would allow customers to track and order inventory and build tooling in the palm of their hands, Plastic News reports.
President-elect Donald Trump has not been silent in his criticism of offshoring, but even public shaming will not stop companies like Milwaukee, WI-based Rexnord Signals from relocating jobs to Mexico, according to The Wall Street Journal. The company will close its Indianapolis, IN facility by June to set up shop in Monterrey, Mexico — over 300 jobs will be affected.
While cost-benefit analyses may still favor offshoring in many cases, the logistics industry has been moving closer and closer to home in order to serve U.S. consumers better and faster.
Amazon, for example, announced it would open two new fulfillment centers in Aurora, IL, providing the region with 1,000 new jobs. At a smaller scale, Daimler Trucks North America will soon open a new, 245,000 square foot parts distribution center in Grimes, IA, where it will employ at least 43 new people.
Love's Travel Stop is also expanding to continue servicing freight markets, as the multi-purpose store announced the opening of five new stores and 450 new parking spots across five states.
Foreign companies too are bringing jobs to the U.S. Austria's Lenzig Group is investing $293 million to expand its Tencel production capacity in Mobile, AL by 2019, promising to bring 163 new jobs to the region.
In other news, the Port Authority of New York/New Jersey recently broke ground for a new intermodal terminal set to open mid-2018; DP World began piling for phase two of the London Logistics Centre at London Gateway; and Chicago O'Hare International Airport began phase two of the construction of its new, 915,000 square foot cargo center.
Mergers & Analysis
Walgreens Boot Alliance came a step closer to securing its acquisition of Rite Aid after preemptively selling 865 stores to Memphis, TN-based Fred's for $950 million, thus avoiding antitrust regulators' concerns. The $9.4 billion acquisition of Rite Aid will help Walgreens compete directly with CVS' mail-in services, among other benefits.
The Surface Transportation Board approved Genesee & Wyoming's purchase of Providence & Worcester Railroad, American Shipper reports. The acquisition provides G&W with 163 owned track miles and 350 miles of agreement-based track access.
Chemical supplier Chemtrade Logistics paid $675.22 million for sodium chlorate and chlor-alkali supplier Canexus, in order to expand its reach in the Americas.
In other news, Hong Kong-based Kerry Logistics announced the purchase of Spanish freight forwarder and customs broker Bofill & Arnan; Houston, TX-based JetCo Delivery acquired Arlington, TX-based Associated Acquisition, adding 45 trucks and a 55,000 square-foot warehouse to the company's services; BlueGrace Logistics bought Continental Traffic; and KJM Capital expanded its reach into the refrigerated trucking market with the purchase of Utah-based Interide Transport and Blue Sky Logistics.
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