Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Amazon.com Inc. is holding its annual Prime Day summer sale for 48 hours today and tomorrow, sending a surge of parcels through the supply chain and forcing rival retailers to ask what they can do to compete with the online colossus.
Now in its fifth year, the sales event has proven to be more than just a stunt, adding another shopping and shipping peak to the retail calendar and earning nicknames like Summer's Black Friday, or Christmas in July.The large scale of Prime Day now sends ripples through the economy that extend beyond Amazon's own corporate borders, as retailers large and small launch their own sales to latch onto the event's momentum.
However, catching a ride on the Prime Day wave requires special planning on the part of all the companies that can't match Amazon's logistical muscle, experts say.
Most small and mid-sized businesses (SMBs) simply can't compete with Amazon's nationwide one-day delivery, or with the similar blistering fulfillment speeds offered in some cities by rivals Walmart and Target, says Steve Dowse, senior vice president of product management at Blume Global, a Pleasanton, Calif.-based provider of supply chain visibility and analytics software.
But with responsive service and personal attention to detail, smaller companies can still meet soaring consumer expectations for quick gratification and high-quality experiences, he said. "Peak season sales are focused on Amazon, Walmart, and Target, but many smaller retailers are also doing a lot of business," Dowse said. Smaller shops can compete by offering a high level of service through nimble practices such as carrying inventory in the right place for what a customer really wants, and not just offering them the inventory that happens to be available to ship to their home tomorrow.
For many retailers, that goal is easier said than done, according to Ilias Simpson, senior vice president for fulfillment services at Radial, a King of Prussia, Pa.-based third party logistics provider (3PL). "Determining appropriate inventory levels for fulfillment centers, particularly during peak periods such a Prime Day, is one of the most challenging tasks for operation teams," Simpson said in an email. "If you carry too much inventory, you tie up money in working capital, and if you don't carry enough inventory, you face stock-outs."
A critical tool for managing peak surges is inventory optimization technology, which can analyze both historical and real-time data to help retailers optimize their total cost to speed and their total cost to serve by tracking three critical data points: the outbound and inbound volume footprints and the shipment's final destination, he said.
The challenge may be more complex this year than ever, since 2019 has a host of external economic factors such as tariff threats, trade wars, and consumers' increased expectations. In addition, a number of major retailers are now creating their own "mid-July" sale strategies to compete with Prime Day, Simpson said.
"Though Black Friday deals and last-minute gift shopping are still months away, Amazon's Prime Day sets the precedent that holiday season shopping starts now. With hundreds of retailers following in the e-commerce giant's footsteps and offering Christmas-in-July-like deals, retailers should pay close attention to consumers' attitudes and preferences in order to get the most out of their mid-year discounts," Fischer said in a release.
Instead of blasting out cookie-cutter emails to boost their sales, retailers can customize the experience by sending personalized recommendations based on each consumer's history, highlighting what shoppers are likely to purchase in addition to sending information on products in stock at high inventory levels, she said. "While consumers are after a good deal, personalization, inventory visibility, and multiple fulfillment options can augment the experience and increase shoppers' likelihood to make another purchase or recommend the retailer to someone else," said Fischer.
Retailers can also provide custom shopping experiences by focusing on shipping and delivery, according to Convey Inc., a logistics technology firm based in Austin, Texas.In 2018, the Amazon Prime Day surge flooded the U.S. Postal Service with volume, pushing average transit times for parcels from 3.3 days to 4.4 days, a rise of 33 percent, Convey said.
"It's an important warning sign for USPS and the retailers who rely on it this year: Amazon is not only expanding its own delivery footprint, but also increasingly biting into sales and shipping capacity for others during this period — requiring them to find new ways to create positive customer experiences and uphold brand promises through actionable insights and collaboration," Carson Krieg, co-founder and director of carrier operations at Convey, said in a release.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.