I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. To mitigate costs and improve efficiencies, it’s important to understand the market. So twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.
Negotiations on the master UPS Teamster contract are underway even though two supplemental agreements with the Local 89 Air Rider in Louisville and one in Northern California remain unresolved, according to Mark Solomon for Freightwaves. It seems the Teamsters’ rhetoric has not toned down either. “If UPS really wants to get serious and get national talks underway, they should get rid of these unequal 22.4 positions and watered-down gig economy PVDs right now. It’d be very easy,” Teamster president Sean O’Brien said in a statement. “We cannot allow movement on national negotiations to stagnate around UPS’ perpetual inaction. The Teamsters want UPS to start responding to some of our biggest issues or make final plans to wrap up supplemental negotiations. Let’s get this done.”
- Meanwhile, Roadie, UPS’ crowd-sourced delivery platform subsidiary, launched a new service called Roadie XL, a logistics tool that will make it easier for organizations to complete the same-day delivery of oversized or awkward items.
- FedEx continues to reset its network and announced it would close 29 FedEx Freight locationsand enact another round of temporary furloughs. The furloughs will begin on May 28, and all furloughed employees will be recalled on or before Aug 25.
- During its FYQ3 earnings call in March, FedEx noted a shift towards deferred services from the APAC region, so effective May 2, it reinstated its International Economy serviceto take advantage of this trend. FedEx suspended the less expensive and longer transit time service during the pandemic due to high demand and tight capacity.
A few tidbits from recent Q1 earnings reports.
- First up is Pitney Bowes. Per their CEO regarding cross-border service – “At the end of the day, if we can’t make that business helpful to what we’re trying to do in terms of making that overall segment profitable, then there is got to be a better owner for it.” Hedge fund Hestia gained 4 seats on Pitney Bowes Board which will be interesting to watch. Hestia has questioned Pitney Bowes’ push into e-commerce over the past few years. Will we see a strategy shift?
- Ryder Systems reported an asset impairment charge of $30 million in Q1 and a $20 million charge in Q4 due to the early termination of Bed, Bath & Beyond’s distribution center in California. In 2021, the 2 companies announced a partnershipin which Ryder System would develop and operate 2 regional distribution centers that will reduce product replenishment times to Bed Bath & Beyond and buybuy BABY stores to less than 10 days from 35 days.
In other news…
- Amazon.com is offering customers $10 to pick up a purchase rather than have it shipped to a home address in a move to reduce costs. Pick-up locations range from lockers or Amazon hubs – not as plentiful, it seems, as UPS or FedEx pick-up/drop-off locations.
- Keep an eye on Flexport. The freight forwarder acquired Shopify’s logistics services which include Delivrr a company Shopify acquiredjust last year. This Flexport acquisition will help meet its goal of providing an end-to-end supply chain solution (sound familiar?) and could end up competing against such supply chain providers as Maersk, DHL, FedEx, and UPS.
That’s it for now. Comments are always welcome. Let me know what I missed. Stay tuned for the next newsletter next week, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.
-Jay