The Friday Five: Global parcel volume increased 17%
Carriers shipped 2,760 parcels per second in 2018 [Supply Chain Dive]
The number of parcels shipped per capita nearly doubled from 2014 to 2018 across the 13 countries covered by Pitney Bowes' annual Parcel Shipping Index Report, released Thursday. In 2014, 12 parcels were shipped per capita globally and by 2018 that number had grown to 23. The 2018 numbers add up to 2,760 parcels shipped per second. China remains the largest overall source of shipped packages and, like last year, is posting the fastest growth at 26% year-over-year from 2017 to 2018. Brazil is just behind China in parcel growth at 25% for the same period. Global parcel shipping volume continues to outpace revenue growth, though the split has become less dramatic over the last year. In 2017, global parcel volume increased 17% while parcel revenue increased 11% year-over-year. In 2018, global parcel volume increased 17% while revenue increased 13% year-over-year.
E-Commerce Driving Bigger Demand for Smaller Warehouses, CBRE Says [Wall Street Journal]
Small is getting much bigger in U.S. industrial real estate. A new analysis by CBRE Group Inc. says rents for warehouses between 70,000 and 120,000 square feet rose by more than a third over the past five years, the WSJ Logistics Report’s Jennifer Smith writes, more than twice as fast as the leasing costs for big distribution centers. The higher rents come as availability of smaller facilities is getting tighter, the result of what CBRE says is a push by businesses including online retailers and their logistics providers to get goods closer to dense population centers to speed up deliveries. Some analysts suggest other commercial trends could be leading some operators away from sprawling warehouses. The WSJ’s Carol Ryan cites a UBS report on online retailers that says the ever-larger warehouses needed to store a vast range of online stock may make it harder to process orders efficiently.
Trump administration considers crackdown on China contraband [Financial Times]
The Trump administration is weighing options to crack down on shipments of contraband goods from China, adding a new point of friction with Beijing on the eve of a pivotal round of trade talks. The White House has been considering an executive order that would increase inspections on parcels from China to detect any illegal contents, according to people familiar with the matter. Administration officials have consulted with big logistics companies as it refines the plan. “China sends the US close to 1m small air parcels a day, and a disturbingly high per cent appear to contain contraband ranging from counterfeit goods to deadly fentanyl and other opioids,” Peter Navarro, the White House trade and manufacturing policy adviser, said on Wednesday. “Options are being evaluated through the inter-agency process to address a significant problem that steals our intellectual property, harms our manufacturers and workers, and kills Americans with deadly drugs,” he added.
IBM Beefs Up Supply-Chain Tools With AI [Wall Street Journal]
International Business Machines Corp. is taking steps to turn supply-chain management toward artificial intelligence. The company is bundling several of its supply-chain management tools into a single platform called the Sterling Supply Chain Suite, the WSJ’s Jared Council reports, extending tools aimed at navigating an increasingly complex landscape for the flow of goods and services. The suite is part of a broader push to automate business decisions between buyers and suppliers. The newest wrinkle for IBM is a program that can forecast how a hurricane or other event might disrupt a supply chain and then recommend alternative suppliers or other actions. That adds to the growing attention companies are paying to risk management in supply chains. Gartner Inc. says many supply chains still lack advanced automation, and the consultant says the use of AI for demand forecasting and other actions would lead to better decision making.
UPS partners with Shippo, offers 55% off shipping for online retailers [Supply Chain Dive]
UPS announced Wednesday a partnership with Shippo, an e-commerce logistics solutions provider, saying it will offer up to 55% off shipping costs and waive surcharges for the 35,000 small- to medium-sized online retailers currently using Shippo's platform. Businesses using Shippo will have access to automatic UPS account creation and UPS marketplace rates in addition to Shippo's main functionality, offering e-tailers the ability to manage orders and track deliveries across multiple sales channels at once, including Amazon and eBay. According to Shippo's 2018 State of E-Commerce Shipping report, 75% of retailers surveyed said shipping costs were their biggest business challenge, up 7% from last year. This trend coincides with an uptick in customers wanting same-day, next-day or free shipping and returns, all of which are services that put the burden on retailers to recoup delivery costs.
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