Amazon Logistics parcel volume will reach 65% of total U.S. Amazon orders by 2022, according to analysis from Morgan Stanley based on parcel data from roughly 70,000 Amazon transactions released in a research note Thursday. Morgan Stanley estimates Amazon is delivering roughly 46% of the items ordered through its U.S. site today — a total of 2.5 billion parcels in 2019. Amazon Logistics' share of its own orders doubled in 2019. Amazon's 2019 parcel volume was still lower than that of FedEx (3 billion) and UPS (4.7 billion), but at the current speed of growth, Morgan Stanley expects Amazon Logistics will overtake the legacy players in 2022.
The investment market is warming up to cold storage. Investors bought $1.9 billion worth of refrigerated warehouses during the first three quarters this year up from $1.77 billion for the entire year of 2018 and higher than any year in the past decade. The property investors are following big customers and big trends. The accelerating flow of money into the market comes as booming growth in online grocery sales and rising consumer demand for fresher produce is fueling more action in the so-called cold chain, including new construction and consolidation among top-tier operators. The top two refrigerated-warehouse owners control a big share of the market, and both are in acquisition mode. The properties come with high risk and high demands for specialized operators, but returns for cold storage have outperformed those of dry warehouses by key measures for the sector.
There won’t be new tariffs under the Christmas tree this year. President Trump agreed to a limited trade agreement with China that will cancel tariffs set to take effect Sunday and roll back existing levies on Chinese goods. The agreement also secures Chinese purchases of U.S. farm goods. The administration was expected to describe more details of the pact today. In the absence of last-minute problems, the big impact for U.S. importers and exporters will be a more stable business environment as they prepare new orders for 2020. A White House adviser said the deal calls for China to buy $50 billion worth of agricultural products in 2020, along with energy and other goods. That’s far more than China has ever bought in the past, marking a big win for U.S. farmers if the orders come through.
GIC, Singapore’s sovereign wealth fund, said it had signed a deal to buy logistics real estate portfolio from funds managed by private-equity firm Apollo Global Management’s affiliates for about 950 million euros ($1 billion). The portfolio comprises 28 logistics assets across Europe, including in Germany, Poland, Slovakia, Netherlands, Belgium and Austria, GIC said in a statement on Friday. It said the deal would help scale up its logistics platform.
Blockchain could be a game-changer, ripping up this paper process and offering substantial efficiency savings. The irony is the enhanced trust and transparency that blockchain could help to foster in the logistics industry is needed in order for the technology to be fully embraced and adopted in the first place. For the full potential of blockchain to be realized, an industry wide ecosystem needs to be developed. But a recent Boston Consulting Group survey found that although 88% of transport and logistics professionals believe blockchain will disrupt the industry in some fashion, "nearly three-quarters (74%) say that they are exploring opportunities only superficially or haven’t thought about blockchain at all." A lack of trust and coordination between industry players — the very aspects of the logistics industry that blockchain could help to improve — are currently blocking widespread adoption.
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