The Friday Five: Trouble down this runday...rent the runway!
Supply Chain Fiasco Prompts Rent the Runway Exec’s Departure [Sourcing Journal]
After a disastrous few weeks of missed shipments and intense public furor, Rent the Runway’s head of supply chain, Marv Cunningham, is departing the company. The luxury fashion rental platform has faced a barrage of angry tweets from its users, stemming from issues with delayed or unfulfilled shipments and sub-par customer service. “My dress never arrived and customer service isn't responding. HELP! My event is TOMORROW the 21st!!” has become a typical Facebook post for Rent the Runway...In a message posted on its website, Rent the Runway said customers whose rentals never arrived would receive $200 "in an effort to make up for this failure." An email sent to subscribers Friday morning from Chief Executive Jenn Hyman said the service would stop accepting new subscribers as it continues to work through software updates to its fulfillment operation. The startup’s latest hiccups illustrate the difficulties Rent the Runway is facing in running a business that heavily relies on an error-free supply chain. The company has faced difficulties managing its logistics before.
U.S. Sanctions Chinese Firms for Allegedly Shipping Iranian Oil [Wall Street Journal]
The U.S.'s drive to isolate Iran is reaching China’s biggest shipping company. The Trump administration blacklisted several firms including tanker units of China’s Cosco Shipping Holdings Ltd. for allegedly shipping Iranian oil in violation of U.S. sanctions, part of an attempt to choke off Iran’s crude exports. The Department of Treasury blacklisted companies include Cosco Shipping Tanker (Dalian) and Cosco Shipping Tanker (Dalian) Seaman & Ship Management operators within Cosco’s sprawling global maritime network. The sanctions are the most dramatic step the U.S. has taken to throttle Iran’s revenue-generating oil trade, and it hits the world’s biggest ship operator and a carrier central to Beijing’s global maritime ambitions. Cosco’s container operation isn’t touched by the sanctions, which affect around 50 tankers, but they provide a new flashpoint for strained relations between Washington and Beijing.
E-Commerce Fulfillment Specialist Deliverr Adds $23 Million in Funding [Wall Street Journal]
The ecosystem dedicated to online order fulfillment is getting bigger. San Francisco-based Startup Deliverr is the latest to get a boost from the venture-capital world with a new $23 million funding Series B funding round, providing the backing to hire more engineers and to build up its network of warehouses. The new round is led by Singapore-based logistics real-estate provider GLP, a sign of the growing financial and operational ties being formed by companies that are targeting different pieces of the online sales market. For Deliverr, the idea is to orchestrate order fulfillment for merchants selling on Walmart Inc., Amazon.com Inc., eBay Inc., and Shopify Inc. through a network of U.S. warehouses that allow delivery of many items in two days or less. The money going into such ventures suggests those networks focused on online sales will only get larger.
Sweetgreen will create delivery program with $150M investment [Supply Chain Dive]
The growing salad chain, Sweetgreen, launched its Outpost offering last fall, opening kiosks in WeWork, Nike and Headspace offices where employees can pick up mobile orders without paying any delivery fees. Because Outpost allows customers to accrue Sweetgreen loyalty points, whereas orders placed through Uber Eats or Doordash do not, the company further incentivizes the use of its own delivery network. Sweetgreen has increased its focus on off-premise sales as of late. In June, the company acquired Galley Foods, a meal service that delivers ready-to-eat food, with plans to leverage its logistics technology, live courier operations, and production capacity. The deal is its only acquisition to date. It makes sense for the tech-focused restaurant to double down on delivery since it already uses data and machine learning technology to predict sales, assess labor and ingredient needs and tracks produce in its supply chain using blockchain. Sweetgreen raised an additional $150 million in a recent funding round, increasing its valuation to $1.6 billion, up from $1 billion 10 months ago. The tech-centric salad chain will use the new capital to launch an app-based delivery program in 2020 and to grow its Outpost office-delivery locations from over 400 offices to 600 by year's end.
Nike opens new distribution center running on 100% renewable energy [Supply Chain Dive]
Nike announced the opening of a new distribution center that will run on entirely renewable energy and recycle 95% of the waste generated on-site. The 1.5-million-square-foot center is located in Ham, Belgium, expanding the company's existing European Logistics Campus in the country. The facility's location close to a network of canals enables "99% of inbound containers to reach the local container park by water" and eliminates the use of 14,000 truck journeys per year according to Nike's estimation. The move comes as the company pushes forward with its goal of achieving zero carbon operations by 2025 and eliminating waste from its supply chain. In addition to sustainable operations, Nike's new distribution center will expand its logistics capabilities. "Our new Court Distribution Center represents Nike’s continued investment in a fast and flexible supply chain," Eric Sprunk, Nike COO said in a statement, noting the new center will enhance the company's ability to deliver to customers across Africa, Europe, and the Middle East.
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