After a brief hiatus, we at Hopstack are extremely excited to announce the return of CrossDock, our monthly newsletter. We aim at bringing you a roundup of the top stories from warehousing, e-commerce fulfillment, and logistics that made the headlines that month.
Rapid changes in technology, macroeconomic factors, and consumer preferences can be difficult to keep track of. This newsletter will help you uncover the latest trends and happenings in the logistics and retail sectors while keeping you updated with industry best practices!
Let us know how valuable you find this edition. If there’s anything else you’d like to see as a part of this newsletter, we are all ears!
In this newsletter:
- Quiet Platform’s ambition to take on Amazon’s fulfillment network
- Walmart’s ramped up inventory management with AR
- UPS’ take on increasing deliveries with every stop
- Heightened adoption of supply chain technologies led by D2C growth
- Makeshift inventory storage due to limited warehousing space in the US
AEO’s logistics partner Quiet Platform launches Delivery Network to compete with Amazon
The newly launched shared delivery network by Quiet Platforms, the logistic partner of the likes of American Eagle Outfitters, paves the way for brands to offer same-day and next-day delivery to their customers by reducing logistics costs and lowering their carbon footprint. The platform pools shared logistics and transportation assets that encourage numerous brand collaborations and seeks to level the logistics playing field with Amazon.
About Quiet’s Shared Delivery Network:
The network targets small and medium companies that aim for high-quality delivery experiences while reducing lead times. The delivery network has more than 40 carriers like DHL, Pitney Bowes, GoFor, and Veho. The most prevalent feature of this shared network is to help the brands to navigate capacity crunches. It also offers redundancy in some markets that overcome demand spikes and help brands to work around their carrier constraints. Quiet Platform’s technology helps brands deliver their products at least 1 to 2 days faster and save $1 per parcel.
Quiet Logistics operates 12 facilities in the U.S and 1 in Canada. Brands can fast forward their delivery-related decisions and adjust fulfillment in real-time irrespective of the constraints using this shared network. Till now, 60 brands have partnered with Quiet Platforms’ shared network platform. American Eagle projects that this shared network will allow companies to reduce logistics costs by $40 billion and lower carbon footprint by 30%.
Walmart credits Augmented Reality Technology for faster Inventory Management
Walmart is touting faster inventory management by speeding up its fulfillment with the help of augmented reality and automation technology. Walmart’s CFL John David Rainey said that their augmented reality technology named VizPick is responsible for accelerating the inventory management process in their U.S stores. It lets the associates efficiently move the items from the backroom to their stores.
Walmart is expanding its tech capabilities as a provider for third parties. It has also touted its automation technology in terms of pricing structure. The machine learning model helps them to save $30 million by improving the pricing and timings of the markdowns.
The company started using VizPick technology last year which led to a 100% adoption rate among the 4500 retail stores. This technology predicts the inventory required by each store and delivers the exact quantity projected by the system at the perfect time.
Last year, Walmart decided to partner with Adobe by integrating its in-house technologies with Adobe’s commerce platform. The robust growth of AI technology is an emerging trend brands are looking for enhanced productivity and additional revenue streams including Walmart.
A UPS Pilot Initiative seeks to deliver more packages with fewer stops
United Parcel Service (UPS) aims to reduce the delivery cost by improving the package volume density in their pilot program, thus providing a value-added service to the customers. Currently, UPS incurs $5.50 as the last-mile delivery cost of a package with an additional 60 cents per package.
Pilot Program of UPS:
The pilot program involves a 3PL technology company holding the order on the order management system until it finds a match of another shipment to the same address. The pilot program will go live in Q3 with the customers participating. The virtual hold of an order is as long as a service level agreement that can extend up to 12 hours.
With the usage of UPS Access Point Locations, UPS has undergone downstream for better delivery density rather than upstream that didn’t work as expected. According to CEO of UPS Carol Tome, the company is expanding its upstream initiatives where it will balance the efforts for bulking up the delivery density which is more profitable on B2B and healthcare segments. E-commerce retailers’ upstream supply chain i.e. their order management system starts from the manufacturer to warehouses or stores. Till now, UPS has partnered with 9 brands in their pilot program.
Supply chain tech witnesses growth due to the rise of Direct-to-Consumer sales
The growth of direct-to-consumer (D2C) sales is providing a boost to SaaS companies which constantly focus on untangling the complexities of the retail supply chain. SaaS providers are helping retailers in building the latest technology that helps them to handle individual consumer orders and manage their inventories efficiently.
Supply chain management SaaS companies enabling e-commerce and fulfillment operations have witnessed a double-digit pace in revenue growth and an explosion in new clients as their technology focuses on handling individual consumer orders. Currently, these companies are getting more new customers because their D2C business solutions are in high demand. It also helps suppliers to dismantle the bottlenecks in the supply chain as it has fewer touchpoints in contrast to going through retailers’ networks.
Impact of D2C on Retailers:
The logistics of the D2C model focus on selling the products directly to consumers without wholesalers and other third-party retailers. This strategy has fostered the growth of platforms like Shopify while helping numerous online brands to sell their products directly to end customers. Brands like Nike, Allbirds, and Peloton Interactive have been stepping up to D2C strategy while finding new ways of delivering products directly to the customers without compromising customer experience.
Retailers are using transport equipment as their mobile warehouses
Companies flushing out with inventories and lack of warehouse space are increasingly turning their truck trailers, shipping containers, and parking lots into ad hoc arrangements for coping with the ongoing disconnect between demand and supply.
Brands are resetting their distribution operations on the fly to maintain an uninterrupted supply chain amidst disruption in transportation networks. It leads to a shoot up rental rates of industrial properties by $8 each square foot which is 21% higher than the last year.
Retailers like Target and Macy’s are reducing prices to clear the excess inventories faster. On the contrary, few other brands divert the late arriving goods to off-price retailers like Burlington Stores and Ross Stores while pushing the inventory management problem at bay.
Repercussions on Supply Chain:
Companies stowing inventory on the transport equipment adds strain to the supply chain as it occupies the shipping containers and trucks required for moving goods, making it cynical for the carriers to reach the equipment at the right time whenever needed.
Thank you for reading! We’ll see you in the next edition of CrossDock. In the meantime, feel free to check out Hopstack’s blog where we publish interesting insights on ecommerce, warehousing, and logistics!