Hanjin's Bankruptcy Will Impact Retailers, Port and Other Logistics Provider

(09/06/2016) South Korean Container Liners, Hanjin, filed bankruptcy on 8/31/2016 and it may cause some X'mas shopping disturbance. Due to Hanjin's financial troubles, those firms facilitating the movements of containers and commodities worry about their payment. As a result, the cargo that are currently on Hanjin's vessels might sit there for a long while before a clear solution can be achieved.

Replenish -- Green packaging

(3/11/2016) Shipping and logistics cost can sometimes be 20% or more on the total product final cost. For some product, water is also the heaviest element inside the product. Think of the coke, beer, tea, detergent .... Since the weight mostly determines the shipping cost, if we can reduce water then we can save some shipping cost. Now Replenish wants to change the packaging to this (see below), consumer just need to add right amount of water back to the product. Will business adapt it? Will consumers buy it?

Some may wonder, why should they still include the big container? Why don't they just sell refill packages? Well there are several reasons. First, the big container shows the exact portion of water (especially for those product that chemical mix has to be exact). Even if the product is not dangerous if the chemical mix is wrong, consumers often fail to follow instruction correctly. See the concentrated detergent example in the US (that's why eventually P&G designs Tide Pods). Second, small refill package looks less valuable and easy for stealth.

I guess is, "It's a good idea. But it will only be in a niche market for specific products." I don't expect that I will be able to buy Arizona Greentea concentrate and add water on my own.

Prototype of Replenish packing.

Go to 7-11 to Pick Up Shipments

(04/08/2016) Do you know now you (American citizens) can file their tax returns at 7-11? "Though the partnership with 7-Eleven might seem odd at first, for those who don’t have a bank account or credit card, this provides an option for them to pay their taxes with cash."In this aspect, finally, the US is catching up with 7-11 operations in Asia.

(11/13/2015) Now the convenient stores may provide another services to customers: picking up shipping packages. 7-11 in the US and Canada now add storage lockers for people who prefer to pick up their shipments. This logistics service provided by convenient stores might be new to American consumers, but it has been very popular in Asian contries for many years. Most people in Asia live in cities has no front yard that can 'securely' guard the shipping packages.

The following is a video (in Chinese) from a foreign backpacker explaining how he use 7-11 in Taiwan shipping stuff to another city.

This is another video (in Chinese) showing that shippers/receivers can use mobile app tracking their packages that are sent to the convenience stores.

UPS Pay Penalty for False Delivery Claims With 17 States

(10/21/2015) Have you ever waited for UPS driver at home for delivery, they didn't show up but the online tracking said "they tried to deliver but cannot be done?" I experienced several times of "no show" of UPS's (same as USPS) online shipping. I don't want to blame 'lazy drivers.' But I think UPS's business culture must allow this to happen pretty often. Now they have to pay for their "over promise and under delivery." But $4.2 millions of penalty? That is ridiculously low.

West Coast Container Congestion Again in 2014

(10/27/2014) And this time the problem is not easy to solve. Unlike the past importing container congestion in the LA-LB ports were caused by labor strike, this year, the container congestion in the west coast is due to shortage in equipment (chassis) and carrier capacity. So, some of U.S. retailers that rely on holiday shopping to turn profit may get hurt this time. A freight consulting company, flegenheimer.com,  concludes several factors (and they look hard to solve):

• Import surge explains terminal congestion, capacity shortages in both rail and drayage trucking sectors. 
• Since most carriers no longer provide chassis, trucker has to make arrangements for their own chassis pick up and wait in line. 
• Raildroad delays in providing railcars and equipment; thus, containers that cannot leave as scheduled create further congestion. 
• ILWU goes on vacation and lesser experienced dock workers are assigned, it affects productivity. 
• Some terminals require appointment of 24 hours prior to pick up.

The equipment shortage will take a long time to solve. 

UPS and Fedex Seek Solutions for Holiday Shipping

(10/25/2014) Did your Christmas online shopping got screw in the last two years with delay?
This is a great article about demand management of Fedex and UPS dealing with holiday shopping. Look what UPS and Fedex ask for online retailers to commit some agreement earlier. The online retailers cannot promise you last minute shopping with on time delivery anymore without 'consulting' with UPS and Fedex. If you are last-minute shopper, you better know what retailers have 'agreement' with Fedex and UPS for last minute shipping.

(2015/10/26) FedEx says that this coming shopping season (from Black Friday to X'mas) will have 317 millions of packages shopping through them. As online become a major economic indicator, it shouldn't be too shocking to know it's another record year (up 12.4% over last year). One day after, UPS estimates that their holiday shipping will be 630 millions of packages. Other than expanding temporarily with more workers , I wonder how FedEx and UPS handle the shipping contract with the major retailers.

Driver Shortage Hits Critical Level

(10/22/2014) Truck driver shortage has been a long term issue for the US domestic logsitics. Long working hours, more strict regulations and drug tests, worsen congestion in metro areas, separation from family,... all attribute to shortage of truck drivers. This drive shortage might hit a critical level such that truck carriers has to say 'No' to shippers who need trucking. Due to shortage, the truck carriers will either have to increase transportation charges to shippers or drop shipments that have bad margins.

When the last-mile transportation is more difficult, we will see transportation cost increase in the long run.

(2015/10/27) The industry keeps warning us, but we only hear warnings. Here is another one. For an industry that needs 800K truck drivers, a 48,000 shortage is a serious problem. They say pay gap is one of the reasons. I think people really need to wait for self-driving trucks to solve this problem.

Two Container Ship Collided in Suez Canal (Caught on Video)

(10/3/2014) It is an amazing footage of two container ship collision in Suez Canal. Three containers fell into the water but there was no casualty from this accident.

iPhone 6 Exrpress

(9/16/2014) It's a chartered express cargo plane (Boeing 747) for iPhone 6. "God bless it," I hear 195000 iPhone 6 new users pray.

"Believe me, this is not the only airplane hauling them apples," he added. "I'm guessing about 20 - 30 heavy's a day coming out of China with just iphones for this launch."

A heavy, he added, is a "BIG airplane."

Snow Blower for Railroad?

(7/9/2014) I was watching "Railroad Alaska" on TV and just realized that how railroads clear the snow during the winter to keep traffic moving. I found several snow removal clips on youtube. Here they are.

This one shows you when snow is not too deep.


If the snow is really deep and hard, then it needs this monster to drill and blow snow away. Wow, based on its speed, how long will it take to clear 1 mile of railroad?

This is another industrial level of snow blower, so amazing.

FedEx, UPS Will Charge By Size

(6/17/2014) Following Fedex's plan to charge ground delivery parcels by its size (not just by weight only) in May 2014, UPS now also announces that they will charge all ground shipping parcels by its size too. Both companies make this move to offset rising transportation cost and more grocery shipping now people buy online. The good news is that UPS' new pricing won't start before Dec 29, 2014. But buying toilet papers from Amazon may not be a good deal anymore.

Independent Contract Truck Drivers Can form Labor Unions

(3/21/2014) The lifestyle of truck driver in the U.S. is long-hour and stressful, especially for those long-haul drivers. To work independently and gain flexibility on their working schedule, some truck drivers become "owner operators" as a self employed (or free-lanced) commercial truck drivers and hired by carriers. It supposes that owner operators have more freedom and take more controls about their assignment and working schedules. But these independent contracted truck drives normally have to pay higher insurance for themselves. Some trucking carriers intentionally use independent contractors to take drivers of their employees to avoid payroll taxes and compensations. A positive side-effect of using independent contractors for the carriers is that the contractors cannot form a union since they are not employees.

Now it can be changed. A carrier from California now accepts an agreement with their "independent contractors" and allows them to form a labor union and cannot ask contractors whether they belong to a union or take retaliation. Now the independent contractors can take collective actions against the carrier if they think the working conditions violates their labor right.

Will Panama Canal Expansion Be Halted?

(1/3/2014) When your house remodeling cost more than you have expected, you still have to pay for the over-run. The Panama canal expansion might be halted as the builders are not 'paid enough for project overrun' and threat to work further. Panama government just has to find other investors to sponsor this project.

Schneider Logistics Settled Over Wage Theft Allegations

(12/11/2013) Schneider Logistics, a Walmart warehouse contractor, settled in the State of California over wage theft allegation. Schneider was accused of "failing to pay them for overtime and illegally deducting wages from their paychecks, among other claims" filed by 568 warehouse workers. Walmart was under pressure in this lawsuit since the workers handles Walmart merchandises. Well, Walmart gave a routine defense: none of the workers are directly employed by Walmart. Using contractor to perform some key business functions is one way that big business to be exempt from benefit packages and expensive HR investment. Example like this includes: Southwest Airline's ground crew in some smaller airports (Bronson, MO; Keywest, FL, I knew it through my personal conversation with the ground crew there). The reason: save $$$.


(5/14/2014) This is another settlement. Finally, the contractor of Walmart agreed, Schneider Logistics, the settlement ($21 millions) for the "backpay to warehouse workers in California who claim they were systematically shorted on pay for years.". 

Runway Competition: Someone's Give Becomes Someone's Take

(12/6/2013) The landing and taking off time slots in busy airports are very precious. For the American Airlines and US Airways merger to be approved, they have to give up some spots to Southwest and Virgin. Well, I think it is good for travelers in New York, right?

Amazon's Delivery Drone

(12/1/2013) Amazon wants to delivery its product through Drones? No kidding? Watch this 60-Minute report. Jeff Bezos has proved several times that he is right, will he be right again?

We had a discussion about Amazon's service innovations today (12/2/2013) in the MBA class. Students showed their concerns about jobs (retailers before, maybe logistics later) being eliminated from many service innovations now. The jobless issue will be a more severe problem in terms of social justice and stability. Jeff Bezos responded (in 60 Minute's interviwe)  "It's the Internet that changes these." When new technologies are available to improve and better serve the customers, are those changes also driven by consumer's demand? Do you enjoy Amazon's good service and prompt delivery? What are your comments on this employment (or unemployment) issue resulting from technology changes?

This analyst says Amazon's flying drone is just an marketing gimmick (12/3/2013) for free advertisement. How do you think?

Post Office's Loss is Netflix's Gain

(2/7/2013) U.S. Post Office announced yesterday (2/6/2013) that they will stop delivering mails on Saturday. Some congressmen are upset with this painful decision. However, Netflix will be happy about it. According to that report, Netflix spent $600 millions delivering their video DVDs to subscribers. If you just take simple calculation, it will save Netflix at least $100 millions per year in the future. Netflix mail-DVD subscribers will be the losers. They pay the same amount of subscription fee, but they have one day less to received the movies they want.

(CC)

2011 Traffic Congestion Cost - 2012 Report

(2/5/2013) This research is done by Texas A&M University. They do this traffic congestion survey every year, and each year it gets worst. Based on 2011's survey data, the US congestion cost is $121 billions. To the trucking industry, it costs them $27 for their wasted time and fuel. Since the US federal and local government did such a poor job for providing good public transportation or diverting people's driving, the worsened traffic cost will only come back to haunt everybody (from the upstream suppliers to the end consumers).  If you are interested in the full report, this is Texas A&M's webpage.

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UPS Drivers Never Turn Left

(1/22/2013) Do you know that the UPS drivers in the city never turn left on major roads (of course, in the US)? Look at this video to see why UPS does so and how much cost does it save.

Drought Deters Mississippi River Transportation

(1/3/2013) After this historical drought in the midwest hurts the farmers in their crops, the Mississippi River near St. Louis (the famous gateway city by the River) will be shut down soon due to a low level of water. The cost of the river transportation disruption is estimated to be $2.8 billions for January 2013 alone. I know some railroads have received some urgent delivery requests due to this disruption. This can be a bad news for US river barge operators if their shippers eventually hook up with railroad. The barge operators may eventually lose many customers.