It’s hard to believe that another year has come and gone. And while it has been one of the most challenging and difficult years in recent memory, it has also been a great year of bringing you the all the biggest supply chain and logistics news. Like in years past, I have learned a lot this year from reading and researching so many supply chain and logistics news stories. At Logistics Viewpoints we would like to thank all our readers for continuing to tune in every week. We’d also like to thank all our sponsors for their continued support. Without our readers and sponsors, Logistics Viewpoints would not be possible. So, a big thank you from all of us, and we hope you all have a wonderful holiday season. And now on to this week’s logistics news.
As the holiday season is in full swing, sellers are concerned about making sure they have enough products in stock to meet demand. For third party sellers on the Amazon platform, this is an especially stressful time. In August, Amazon instituted limits on shipments from third-party sellers that use its fulfillment service to package and ship orders, known as Fulfillment by Amazon. The limits apply to all product categories and differ on an item-by-item basis. This was part of an effort to make sure Amazon had enough space to store all their goods for the holidays. When Amazon announced the policy, it said the quantity limits would help ensure all sellers using Fulfillment by Amazon have space to store their products. The initiative was also meant to prevent the kinds of supply chain bottlenecks and delivery delays Amazon experienced during the early months of the pandemic. But for third party sellers, especially smaller sellers, this means that restocking items is much harder, and they are losing out on sales due to out-of-stock items this holidays season.
As the race to get a coronavirus vaccine authorized in the US heats up, federal officials are laying out plans for vaccine distribution. The supply chain operations plan that has been put in place is to begin shipping vaccines within 24 hours of authorization, making the vaccine available within 48 hours of authorization. With the FDA panel recommending that Pfizer’s vaccine be approved, that could happen as soon as this weekend. Late last week, Health and Human Services Secretary Alex Azar announced that FedEx will be one of McKesson’s logistics partners in the distribution of coronavirus vaccines. Azar noted that “in the case of the Pfizer vaccine, Pfizer will ship directly through FedEx, and we will use McKesson to marry their product up with the vaccination administration kit.” In the end, individual states oversee deciding where vaccines will be shipped.
While the supply chain strategy has been laid out for vaccine distribution, there is concern over how much of the vaccine will be readily available. President Trump’s Operation Warp Speed promised a flood of COVID vaccines, but it is more likely that states will receive a fraction of what they were expecting. Federal officials have slashed the amount of coronavirus vaccine they plan to ship to states in December because of constraints on supply. Instead of the delivery of 300 million or so doses of vaccine immediately after emergency-use approval and before the end of 2020 as the Trump administration had originally promised, current plans call for availability of around a tenth of that, or 35 to 40 million doses. On top of that, all but one of the vaccines in clinical trials require two shots, 21 to 28 days apart. This will put added strain on the supply chain as once the first recipients are ready for their second dose, larger parts of the population will be waiting on their first.
Loblaw Companies, Canada’s largest food retailer, is slated to deploy a fleet of autonomous delivery vehicles in Toronto to provide short-haul, middle-mile logistics for its PC Express online grocery service next month. Palo Alto, California-based Gatik is supplying the self-driving technology under a multiyear partnership with Loblaw. Plans call for Gatik to operate five trucks for Loblaw up to seven days a week, 12 hours a day, on five routes, using public roads with fixed pickup and drop-off locations. All trucks will have an emergency driver as a co-pilot.
Uber has clearly seen a downturn in the need for its core ridesharing app since the start of the coronavirus pandemic. But now, the company is utilizing a service it quietly launched in April in a few select markets just in time for the holiday shipping spree: Uber Connect. Uber Connect is available for sending and receiving packages in thousands of new locations, arriving in 2,400 US cities this week. For sending out a holiday gift or a box of chocolate chip cookies, you put in your recipient’s address and contact info. When a delivery driver arrives at your location, you meet at the curb and put the items in the trunk to keep it a contactless experience. On the other end the recipient is notified when the package arrives if they have the Uber app.
As the world takes a closer look at sustainability and the impact of carbon emissions on climate change, more and more global companies are changing their business processes and technologies to reduce their impact on climate change. We have seen this from a number of companies looking to end deforestation or make the switch to renewable energy sources. United Natural Foods Inc. (UNFI) is the latest to make a major announcement in its efforts to reduce its impact on climate change by setting science-based emissions reduction targets covering its own operations and value chain. The wholesale grocery distributor expects its targets will align with the goals of the Paris Agreement to limit global temperature rise to well below 2°C above pre-industrial levels, and to pursue efforts to limit warming to 1.5°C for the best chance of avoiding the worst impacts of climate change.
One of the most fickle products when it comes to accurately forecasting supply and demand is Christmas trees. With the coronavirus pandemic experiencing another global surge, no one was really sure how Christmas tree sales would go this year. For those farmers in Europe that sell trees, things are going well. However, even when things are going well, there are always issues that arise. For example, in Denmark, the industry relies on workers from Eastern Europe during the season. The supply has dried up due to cross-border travel restrictions. But, demand for trees is surging, as more people seem to be getting in the festive mood to counteract the general glumness of the pandemic. Even with the growing complexities of the supply chain due to COVID-19, tree farmers are in bright spirits.
And while Christmas trees appear to be in ample supply even with growing demand, the same does not hold true for cookies in the US. Campbell Soup Co., the maker of Pepperidge Farm cookies, warned it’s working through “supply constraints” in its cookie division, which makes familiar packaged varieties like Milano and Chessmen. The shortage is a combination of COVID-related labor shortages and elevated demand. According to a report by Top Data, cookie demand in the US has surged by 25 percent during COVID, with one in five Americans consuming more than three cookies per day. The holidays bring about an expected surge each year, but this year, cookie companies simply might not be able to meet the demand.
That’s all for this week and this year. Thank you for reading, and we’ll see you next year. Enjoy the weekend, the holiday season, and the song of the week, Led Zeppelin’s Thank You.