morai-logistics-blog-amazon-soar

Flying high

So it’s not really a surprise at this point, but e-commerce giant did well over the holidays, very well. Not only did it manage to ship packages to 185 countries during the holiday season, but it also managed to expand its Prime subscription service by more than 3 million people (and sell an Adele CD every 3 seconds on Cyber Monday).

According to an article on The Verge, over 200 million items were shipped for free to Prime subscribes. With another successful holiday season under its belt, it also isn’t a surprise that Amazon is expanding in new areas to better manage its business in the coming years. It looks like that this year, Amazon is focusing on innovating the transportation and delivery of its packages. Amazon is currently in talks to launch its own air freight line which it would start by leasing 20 Boeing 767 freighter jets.

The company is currently heavily reliant on UPS, FedEx, and the U.S Postal Service for its deliveries, but it looks like it would like to exert more control over its product especially for its Prime members. This is likely due to avoid another debacle like that of two year ago when the holiday crunch delayed UPS from delivering important Christmas gifts before the holiday leading to Amazon refunding shipping charges and offering customers a $20 gift card.

According to this USA Today article, Amazon building its own transportation logistics network would mean three things:

  • It gives the company capacity. Amazon needs to in-source more of its transportation logistics so it can continue to grow
  • It gives Amazon control over delivery, which is a large part of the customer experience.
  • Amazon is a master at building infrastructure for itself and then selling excess capacity to others at a profit.

Although having its own transportation logistics would be helpful, it doesn’t cheap. Leasing newly built Boeing 767F jets runs $600,000 to $650,000 a month. “Used converted freighter jets, which Amazon will likely have to launch the cargo business, cost about $300,000 to $325,000 per month to lease” writes the Seattle Times.

Flying higher

Leasing a fleet of Boeing 767F jets isn’t the only reason Amazon is in the news currently. Thanks to a project called “Blue Origin” with which Jeff Bezos is involved with, Amazon may someday also have affordable commercial suborbital to orbital flight to make it’s deliveries. The company tested out its New Shepard rocket last month which is designed to carry six passengers.

The rocket reached an altitude of 62 miles (100 km) – breaching the boundary between Earth’s atmosphere and space – and landed back at the launch site eight minutes later, the company said.
“Fellow billionaire entrepreneur Elon Musk, founder and chief executive officer of rival rocket company Space Exploration Technologies, or SpaceX, used his Twitter feed to congratulate Bezos and the Blue Origin team on the landing, a technology that SpaceX is also pursuing” wrote Supply Chain 247.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-blog-santa-tracker

Every year on this day, the North American Aerospace Defense Command (NORAD) “tracks” and broadcasts Santa Claus’ location as he leaves his home in the North Pole and delivers presents too all the children of the world.

This article on CNET goes into colorful detail about the origins of the now 65 year old Christmas-themed program:

“One morning that December, U.S. Air Force Col. Harry Shoup, the director of operations at CONAD, the Continental Air Defense Command–NORAD’s predecessor–got a phone call at his Colorado Springs, Colorado, office. This was no laughing matter. The call had come in on one of the top secret lines inside CONAD that only rang in the case of a crisis.

Grabbing the phone, Shoup must have expected the worst. Instead, a tiny voice asked, “Is this Santa Claus?”

“Dad’s pretty annoyed,” said Terri Van Keuren, Shoup’s daughter, recalling the legend of that day in 1955. “He barks into the phone,” demanding to know who’s calling.

“The little voice is now crying,” Van Keuren continued. “‘Is this one of Santa’s elves, then?'”

What had happened is that a local paper had run an ad with a large picture of Santa Claus that urged kids to call the displayed number to talk “personally any time day or night”.
However, the number listed on the ad was wrong by a digit. Rather than talking to jolly St. Nick, children were calling into a very special phone line that was only supposed to ring if the Cold War heated up and Russia attacked.

Thanks to the wrong digit in the ad, many hopeful kids called in excited to be and eagerly anticipating their chance to tell Santa want they want personally. Realizing what had happened and not wanting to crush the expectations of so many children, those on the other end of the line decided to pretend to be Santa and his helpers. From there a tradition was born.

Now every December 24th, children can call NORAD to find out where in the world Santa is located.

Tracking Santa Today

“Tracking Santa” is more difficult and resource intensive than many would imagine. Here’s the short list of some of the stats behind the scene:

Although the program is led by NORAD, it comes to no cost to tax payers. Instead, it is paid for by its corporate partners and through the hard work of the people working on helping to track Santa.
It is through their efforts that Christmas can remain special a little longer for thousands of children around the world.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-ecommerce-slow-down

Kurt Salmon, a global management consulting firm, recently put out a study of online orders from 62 different retailers. The study analyzed online orders that were shipped to consumers, as well as those picked up in-store to measure shipping speed, accuracy and cost.

The most interesting find in the study, is that on average, order-to-delivery time for the 62 major retailers was slower by 20% than last year’s average:

In fact, only 40% of buy online, pick up in store (BOPUS) transactions were error free this year, compared to 91% of delivered orders in the study and 98% of delivered orders during the rest of the year. This huge service gap—especially in such a customer-facing area—exposes retailers and can leave customers out in the cold

On the positive side, the amount of retailers surveyed from last year is now at 90%, up 15%. Retailers offering free shipping on anything in their catalogue rather than select items has also increased. This number has grown by 50%.

“Improved execution enabled 80% of retailers to complete orders within two weeks of Cyber Monday, up from 66% in 2014, with 9% fewer cancelled orders. Overall delivery time has increased 21% from 2014”, writes the study.

An article on CNBC.com also describes how although there is a gap, the deadline for deliveries has gained an additional day.

According to a study by customer analytics firm StellaService, Dec. 21 is the most common deadline put in place by retailers promising standard or free shipping by Dec. 25. That’s one additional day compared to last year, when the most common cutoff date was Dec. 20.

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Source: CNBC

It’ll be important for e-commerce companies to improve their order-to-delivery times not only to meet current customer demand, but also future customer demand. Looking at data from this past Black Friday and Cyber Monday, it looks like Cyber Monday has already eclipsed the former as the shopping holiday.

According to this article from LogisticsManagement.com, the sales breakdown for the two holidays was as follows:

  • Sales expectation for Cyber Monday were expected at $3 billion, a first for the holiday
  • This is a 12% annual increase and a 50% increase from 2012, according to Adobe
  • According to an analysis by ShipMatrix, 91 percent of orders delivered by UPS’ ground service during Cyber Week were on time, compared to 97 percent during that time frame last year.
  • Black Friday sales dropped from $11.6 billion in 2014 to $10.4 billion in 2015, according to data from ShopperTrak
  • Online sales between Thanksgiving and Sunday were up 17 percent to $8.03 billion, according to Adobe

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

With the rapidly changing environment of the logistics and supply chain industry, it has been a busy one for mergers and acquisitions (M&A) in the third-party logistics sphere. There is a lot of pressure for 3rd party logistics providers to expand their services; customers and clients are now looking more and more for a one-stop solution for all of their logistics and supply chain needs. Combine this with a need to drive scale in specific markets and a desire to go global for rapidly growing companies and you’ve got a recipe for a healthy M&A environment.

This month we thought we’d focus on exploring how these concepts are affecting 3PLs and compiled the most insightful facts we could find!

9 Facts Looking at the Trend of Mergers and Acquisitions in Third-Party Logistics

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Sports-Logistics

“Before the high-profile athletes and rabid fans arrive at a major professional sports event, superstar logisticians and planners perform their own feats of greatness to ensure the big game goes off without a hitch” -writes this InboundLogistics post.

Last night the Toronto Raptors faced off against the Cleveland Cavalier, and emerged victorious with 103-99 score. Those in attendance were treated to stylish swag, as the game was also the third annual Drake Night for the Toronto Raptors.

As of September 2013, Canadian music artist Drake (Aubrey Drake Graham) became the Toronto’s Raptors’ official “global ambassador“. His responsibilities have been to rebrand, create buzz, and even help design jerseys and merchandise. In his role as global ambassador for the team, Drake has even created a new logo and new colors for the team.

His help with branding was no small feat either, as Raptor’s brand value rose from $52 million in 2013 to an estimated $97 million as of January of this year according to Forbes.

A professional sporting event is not just about selling a game to fans, but about delivering an experience. There are many moving parts behind the scenes to ensure those attending the event enjoy as positive an experience as possible. Having clothing designed, delivered, and ready for the big game is only one area wherein logistics is important in professional sporting events.

For larger and well known international events, ensuring the logistics of an event means that careful planning is done several years before the event itself.

The 2014 Sochi Winter Olympics for example, was announced and planned seven years prior to the event, which was a smart move as there were:

  • over 5,500 athletes and team members who attended.
  • over 350 paralympic athletes and team members who attended.
  • over 25,000 volunteers who helped out with the Olympic games.
  • over 12,000 media representatives from all over the world broadcasting the games to an expected 2.1 billion television viewers.

Transport and Sporting Events

Without athletes, you cannot have a sporting event. Without a venue, you cannot have your sporting event. Without an audience, you cannot have a sporting event. It is for these three key considerations that transport services for a sporting event is so critical.

SEL, a company specializing in sports and events logistics, writes:

“Managing the transport services for a sporting event involves not only arranging transfers for athletes and equipment, but also providing for all that is closely connected with it, from catering to the most advanced kinds of fuel. Moreover, covering world championships means coping with various countries and languages, long distances, and customs and domestic rules that differ from one nation to another”.

Fun and Games For The Next Generation of Logisticians

Like other areas of logistics, sports and event logistics are quickly growing fields. Some schools are already offering programs specializing in these fields with courses in Event Planning and Logistics, Behind the Scenes in Events, Sports and Event Marketing.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Holiday-Planning

We are in mid November and for many people this means that it’s the best time to start to thinking about who they’ll be giving a gift to and what that gift will be. If organized, they’ll set a budget and a timeline so they aren’t scrambling at 11 PM the night before in a dollar store for the perfect gift.

If you are working in a distribution centre however, the planning and preparation stage for your building/company would have started about four months ago back near the end of July. You would now either be in the middle or very close to peak season, meaning that your building could see an inventory increase of over 40%.

Given how close the holiday season is, there is likely not much that can be done if your distribution centre is only just now scrambling to put together peak plans for your building. Rather than this be a list of tips for planning a successful peak, consider this a quick checklist to determine exactly how rocky a peak your supply chain may have. As the saying goes,

“the best laid plans of mice and men often go awry” – Robert Burns .

Filling personnel gaps

Does your distribution centre have the right people, in the right places, in the right numbers? Being in the peak season means that overall volume of your buildings will increase. The amount of items received and shipped will increase. The amount of items being stored and necessary space will increase. Quality control in your building’s processes will need to be increased. Even available security and janitorial personnel will need to increase in order to service the increase in personnel in other areas of the building.

What are your building’s plan for staffing needs? This is a question that should’ve been addressed early but now is a good time to review!

  • How many temps have been hired, and what sort of tasks are they handling?
  • Is there an incentive plan that pays bonuses for workers who excel during peak? If so, how has it impacted worker engagement thus far?
  • Is your building’s staffing plan calculated to meet your service goals (orders/boxes per hour per employee, lines picked per hour per picker, etc)?. How closely are those goals being hit?

Winter is coming…

The holidays not only bring cheer and a spike in products traveling through supply chains, but also bad weather (if you are in North America). Even if you are located in an area where snow won’t affect your distribution centre directly, it doesn’t mean that your vendors, carriers, and customers will be safe from it.

  • Does your building have a well-documented emergency plan in case of power outages?
  • Does your staff understand the expedited transportation options available such as time-definite ocean transportation, air-sea, sea-air, and team-driver trucking service?
  • Has your building tested Plan B carriers to see if there are any issues in utilizing them if your preferred carriers become indisposed during peak time?

Getting those evaluation sheets ready

No matter how well prepared and laid-out the plans for your distribution centre are, chances are there will be some area in which those plans fall short. It could be due to vendor mismanagement of inventory leading to out-of-stock of a hot item. Or underestimating the amount of returns and not having the staff post-holiday. Regardless of the shortfalls, it is important to have a system in place to track your performance and use labor statistics, order data, customer satisfaction scores, and inventory reporting to identify areas where you both shined and struck out.

This information will help you during future peak planning. Having an outside consultant come in and review the data with you post-peak. This help you think through necessary changes for next year’s peak season that you can begin working on as soon as the peak season has wrapped up.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-the-dabbawalas

Restaurants offering delivery of their items for a cost is nothing too special in most large cities. However, the service is typically only offered on orders over a certain amount and only for some items and not others.

What would you say then if we told you than in Mumbai, India you could have your food delivered to you every day for a monthly fee of around $10? The service would also be guaranteed rain or shine, and even during more extreme situations such as monsoons and political strife which is only part of the reason why its growing at a steady rate of 5 to 10 percent a year.

The best part of all is that this delivery service doesn’t have a minimum amount that needs to be ordered before it applies as it isn’t tied to any restaurants. It is instead a service by the dabbawalas (“those who carry boxes”), and they specialize in receiving home cooked meals from a family’s home in a tiffin (a circular silver tin with multiple compartments) and delivering the lunch to a working spouse who could be several miles away.

Over 200,000 meals a day are collected by around 5,000 dabbawalas in the morning from their clients’ homes.

The lunches are sorted according to where they came from, and where they are intended to go. Each tiffin is labelled with an alpha numeric code and loaded onto city trains before traversing the city’s maze of over 22 million before being handed off to local dabbawalas who complete the last part of the delivery. After the food is eaten, the tiffins are collected by dabbawalas and make a return trip to their respective homes.

What’s most impressive is that although the majority of the dabbawalas are semi-literate or illiterate, mistakes are rarely made. Their delivery system has been awarded a six sigma level of efficiency. That means they make around one mistake in every six million deliveries. The incredible level of efficiency and precision of their delivery system has even garnered the attention FedEx and was the topic of a Harvard Business School case-study.

Organization and Logistics

The organization of this dabbawalas is very interesting as its largely decentralized with no organizational structure, managerial layers or explicit control mechanisms. Dabbawalas are divided into sub-groups of fifteen to 25, each supervised by four mukadams. The mukadams are familiar with the colors and codings used in the complex logistics process.

Their key responsibility is sorting tiffins but they play a critical role in resolving disputes; maintaining records of receipts and payments; acquiring new customers; and training junior dabbawalas. Each group is financially independent but coordinates with others for deliveries. The process is competitive at the customers’ end and united at the delivery end. The dabbawala business has been adapting well to changes in the big city including going online. Customers can now log onto their website to access their service.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Hello everyone! This week we are looking into the Millenium Development Goals which shed a bit of light onto the humanitarian aspect of logistics.

We hope this eBook gives you insight on the importance of strong supply networks, and the role logistics play in achieving these goals.

Looking Back on The Millenium Development Goals

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Back-to-the-Future-Day

Last week on Wednesday was “Back to the Future Day”. According to the Back to the Future trilogy, characters Marty McFly (Michael J. Fox) and Doctor Emmett Brown (Christopher Lloyd)’s journeyed forward 30 years to the “future” date of October 21st, 2015.

Given the cultural impact the film has had across generations in the three decades of its release, the day was celebrated with many articles and memes across the social media landscape.

There were a few very fun logistics articles relating to the day, some of which we’d like to highlight for this week’s blog post! Before that however, we need a moment to talk about Pepsi.

In the scene wherein Marty and Doc Brown travel to 2015, a running gag is how everything is covered in futuristic product placement of existing popular brands. So in celebration, many companies featured in the film created collectable equivalents of the fictional products from the films. Nike revealed self-lacing shoes, Universal Pictures released a trailer for Jaws 19, and Pepsi produced a ready supply of “Pepsi Perfect” to meet the hungry customer demand. Ok that last one isn’t entirely true.

Thanks in part to selling earlier than promised and greatly underestimating the demand for the collector item, Pepsi has something of a PR disaster on its hands with its handling of Pepsi Perfect. What should’ve retailed for $20.15 a bottle, is now being sold by private sellers upwards of $500.00. That’s a 25x mark-up in less than a week! Needless to say, many people are not happy and the resentment on social media and in product reviews is not doing any favours to the Pepsi brand.

With that out of the way, let’s look at those promised blog posts!

Logistics and Back to the Future Day

The first is an article by Alvaro Fernandez, a solutions blueprint developer for Kinaxis. The article is about failed supply chain predictions from the “future” portrayed in the films. From RFID tags on milk cartons (so close!), to self-driven trucks, Fernandez discusses five things that the movies got wrong for 2015. What makes this a favourite article of Back to the Future Day for us, is that Fernandez did a bit of research and had interesting links in regards to how far along supply chains are to reaching these predictions as well as the real world hurdles they’ll need to overcome before they can be fully realized.

This post by LogisticsHandling.com takes a more nostalgic approach. It invites the reader to conduct a thought experiment. What if the reader really did go with Marty and Doc Brown 30 years into the future?

If we were to share a ride back to 1985 with Marty in his DeLorean, we’d see some key moments when the era of internet commerce first began to come together. The first Internet domain name, ‘symbolics.com’ was registered; Microsoft released its Windows 1.0 operating system, featuring mouse navigation to allow PC users to ‘point and click’ their way through screens or ‘windows’; Dell built and designed its first computer system, and the first mobile call was made in the UK on the embryonic Vodafone network

Before we go, be sure to check out this video of Michael J. Fox and Christopher Lloyd reuniting to talk about what actually came about by 2015.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-More-Tech

In the past, we’ve discussed how drones and RFID technology are set to impact the logistics industry. These technologies, along with Amazon Robotics (previously Kiva Systems), would have been considered speculative science fiction less than decade ago. These technologies are either only a few years from revolutionizing the supply chain landscape, or have already begun transforming it.

The many logistics, business, and technology articles on the subjects make the three seem like the industry is only weeks away while ignoring some very real gains this past year in some other potentially game changing technology.

For this week, we’d like to discuss the potential impact of things such as mass produced cheap 3D printers, and uberfication. These two innovations are quickly bridging the gap from speculative opinion pieces to best practice!

Mass produced 3D/4D Printers

So this first piece of technology is much closer to being a reality as working 3D/4D printers already exist and are being used in a limited capacity across multiple industries and creative novelties.

This isn’t surprising. The technology is almost four decades old and for most of that time it has been prohibitively expensive with many items produced in that time being little more than talking pieces.

It is only recently that companies such as Nike, Gillette, and Mattel have started investing heavily in 3D printing with even Google joining in with a plans to mass produce 3D-printed smart phones.

With some commercial 3D printers now retailing for less than $100, and newer models such as Hewlett Packard’s Multi Jet Fusion on the horizon however, it won’t be long before the technology starts becoming a viable alternative to traditional shipping.

Uberfication

In the time span of 3 short years, the international transportation network company of Uber Technologies Inc. went from launching its app to having an estimated worth of $50 billion.

It did this by not necessarily offering a new product or service (vehicle-for-hire business models have effectively existed since the idea of transportation has existed), but by streamlining the entire process. Uber tapped into the frustration that many felt with the process of hiring a taxi and instead offers a cheaper, quicker, much more personalized experience which all start with a swipe or two on your phone.

Although many may view Uber as a taxi app, its valuation is indication that investors instead see it as a logistics company according to Adrian Gonzalez, president of consulting firm Adelante SCM.

The soon-to-be launched UberRUSH expands the Uber services to allow customers to get “pretty much anything in minutes” according to the their site:

If every local business delivered, we’d all save time and energy. But most simply can’t. Day-to-day operations are already complicated and delivery can cause all sorts of logistical headaches. There has never been a simple local delivery solution. Until now.

UberRUSH aims to steam-line delivery services much in the same way the company has done to the taxi industry with business owners using Uber drivers to deliver products to customers.

The site also boasts that UberRUSH will allow both customers and businesses to: “order and track deliveries instantly, expand delivery zones, and integrate with existing tools and platforms”

It’ll be interesting to see what customers of the near-future will prefer, the go-anywhere mechanical Amazon drone delivery, or the personalized (though less versatile) Uber delivery of a package and a hello.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!