Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Perhaps as early as Monday, the U.S. Postal Service (USPS) will roll
out a pilot version of a same-day delivery service, called "Metropost," that covers a 49 square-mile radius in and around
San Francisco. USPS has not confirmed a specific launch date. However, if it begins Monday, it will coincide with
the Post Office's busiest mailing and shipping day of the year.
The market test runs until next December, though USPS Spokesperson John G. Friess said the
quasi-governmental agency will know before then if the project should move beyond the pilot phase
or be consigned to the junk heap. If the fish bite, USPS can apply to the Postal Regulatory Commission—the
federal agency that oversees postal operations—for approval to expand it nationwide.
Due to laws governing a USPS service rollout, annual revenue during the test phase cannot exceed $50 million. USPS'
total annual revenue is approximately $66 billion.
The service has other limitations beyond the revenue ceiling. It can only be tested in one market. No more
than 10 online e-commerce companies can participate. Each participant must have at least 10 physical locations
of some type nationwide, with one or more in the San Francisco area. And at least through the end of the year,
only 200 packages a day can be tendered.
The package restrictions can be lifted if USPS decides to increase its capacity supporting the service, Friess
said. The agency has developed a separate delivery network dedicated to the implementation.
San Francisco was chosen as the test market because it is "densely populated and has a customer base with an
appetite for this type of service," Friess said. He said USPS will announce the initial participant when it rolls
out the service.
Potential users are also under some restrictions. Users must live within the area designated for delivery. Cutoff
times for orders are between 2 and 3 pm, with packages to be picked up after 3 pm and delivered between 4 pm and 8 pm.
Friess said the cutoff times are later than for most same-day transactions, which generally require orders to be placed
before noon to be delivered that day.
Users can request same-day deliveries by utilizing an eligible e-commerce platform to buy merchandise, by
purchasing items at retail locations that are partnering with test participants, or by visiting a test
participant's own website.
Friess said the limitations of the market test do not reflect USPS' "language," but are instead designed to comply
with laws governing a USPS service rollout. USPS has said the pilot period will give it time to determine the service's
viability and to adjust its pricing as market conditions warrant.
Friess would not comment on specific USPS pricing for the service, though he said the agency has created one
pricing scheme for packages under 25 pounds and another for packages weighing more than that. It will then be up
to the participant to determine how it would pass on its shipping costs to the end customer. The maximum weight
that can be shipped under the service is 150 pounds.
Demand for same-day service will be largely influenced by customers' willingness to pay the market price for the
convenience of instant deliveries, or to pay anything at all. Businesses and consumers have been conditioned to receive
free shipping for their online orders, and research has shown that many e-commerce transactions are not consummated if
there is a cost to ship.
BIG POTENTIAL
The USPS rollout comes amid a flurry of activity in a delivery segment that is long on potential
but has a number of question marks attached to it. Because market demand for same-day service has
not been fully vetted, no one knows if there is enough long-term interest to motivate providers to
build or refine supply chain infrastructures, and then charge the premium prices that would
accompany those efforts.
The segment's popularity will be determined by the rapid growth of online transactions. But it's hard
to conceive how small, lightweight items that comprise most online commerce would, even in aggregate, achieve
the necessary shipment density for a same-day service to succeed on a nationwide scale.
No one is even sure about the size of the same-day market. In 2007, when same-day was more of an adjunct to
other delivery services, the market was pegged at $4 billion a year. In 2011, the Messenger Courier Association of
America, which has a keen interest in same-day service since many members operate in highly-congested urban areas
with small geographic footprints, estimated it at $8.5 billion a year.
JUMPING INTO THE POOL
Despite the caveats, the field is getting crowded as retailers, e-tailers, and providers test the waters.
Wal-Mart Stores Inc., the world's largest retailer, is piloting with UPS Supply Chain
Solutions, UPS Inc.'s
supply chain unit, on a program charging customers in northern Virginia, Philadelphia, Minneapolis, and San
Jose/San Francisco a flat fee for same-day deliveries of holiday items. Susan Rosenberg, a UPS spokesperson,
said the company coordinates the dispatch of local couriers in each market to deliver goods from Wal-Mart's
stores to customer destinations.
For its part, Atlanta-based UPS is evaluating a "number of different models" for same-day deliveries to
gauge what the market will bear for what is becoming known as "instant service," Rosenberg said.
FedEx Corp., UPS' chief rival, launched a nationwide same-day service in 1995 that utilized a "next-flight-out" air
service. In 2008, it began offering same-day deliveries on an intra-city basis in 10 markets and expanded it to 20 in
2009. Five of those markets—Chicago, Dallas, Denver, Los Angeles, and Washington, D.C.—have since been integrated into
the local delivery networks of FedEx Office, a FedEx unit that oversees the intra-city service. The remaining 15 markets will
be added over the next two years, according to Carla Boyd, a FedEx spokeswoman.
Boyd said that by leveraging the FedEx Office van networks in each market, FedEx can offer users a two-hour delivery
guarantee from the time the package is picked up at origin.
The growing interest in same-day deliveries is pushing e-tailers and traditional retailers in unusual directions.
Cathy Roberson, a U.S.-based analyst for U.K. research firm Transport
Intelligence, said traditional retailers are starting
to use their stores as de facto distribution centers to fulfill orders and consign them to a local courier for delivery,
sometimes within a couple of hours.
Through this approach, a traditional retailer "may be able to extend same-day delivery hour options" beyond what a
pure e-tailer like Amazon.com can now offer, especially in less densely populated markets, she said.
One example cited by Roberson is online auctioneer's eBay Inc.'s integration of Milo.com, a local shopping engine
acquired by eBay in 2010 for $75 million. Through Milo, eBay takes so-called "brick-and-mortar" inventory from local
stores and pushes it on to the mobile devices of eBay shoppers who've provided e-mail addresses. There, consumers can
order merchandise and have it delivered by local couriers in sometimes under an hour, she said.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”