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.
The numbers don’t compare exactly to the firm’s 2019 results, since JD.com says it extended the sale from a single day on June 18—rendered in digits as 618—to nearly three weeks in a nod to coronavirus conditions, running the event from June 1-18 to give users more time online to make their purchasing decisions. That accounting wrinkle didn’t stop the firm from crowing about its success, declaring: “As the first major shopping event in the midst of the global COVID-19 pandemic, JD’s 618 performance has demonstrated the resilience of the Chinese economy and the opportunity that remains for international brands, even under uncertainty.”
JD.com did not disclose the profit or loss it made on the sale, but in its most recent earnings report, the retail giant declared net revenues for the first quarter of 2020 of $120.6 billion, an increase of 20.7% from the first quarter of 2019. In comparison, amazon.com reported just $75.45 billion in revenue for its 2020 first quarter. And JD.com has its foot on the accelerator, announcing in June that it planned to raise an estimated $3 billion through a stock offering in order to finance improvements to “key supply chain based technology initiatives” and slow the growth of its fulfillment expenses.
This year’s 618 sale was the 17th annual such event for JD.com and joins a growing number of dates on the global calendar of “peak” events that used to feature primarily the winter holiday shopping season that stretches from Thanksgiving to Christmas. Today, retailers plan for sales surges on many other dates, such as amazon.com's Prime Day on July 15—now postponed until September by the pandemic—and Chinese online retailer Alibaba’s “Singles Day” on November 11.
Pandemic drives demand for food, medical equipment
For the 2020 edition of the 618 sale, JD.com attributed much of the increased trade volume to spikes in demand driven by online shoppers working from home during the coronavirus crisis, saying that from June 1 to 18, fresh food sold online and offline increased 100% year over year. That total included increases in sales of vegetables of 160% and sales of meat of 174%; led by pork up 229%, chicken up 115%, and mutton up 202%. “Many consumers, including those who were more accustomed to shopping for their groceries offline, turned to JD during COVID-19 and have continued to do so,” JD.com said.
Health concerns also drove demand for medical and healthcare products, which increased 173% year over year for the period from June 1018, while sales of drugs for chronic diseases sold from JD Pharmacy increased by 270%, cross-border drug sales increased by 20 times, and sales of omnichannel medicine delivery service by JD Pharmacy was 492 times its level last year.
The purchases were not all domestic, but overseas consumers have also turned to JD’s outbound e-commerce platform during the ongoing pandemic, the company said. JD Global Sales, which runs the outbound business, witnessed 271% growth in transaction volume during the 18-day campaign, with the top five best-selling markets being Hong Kong SAR, Chinese Taipei, the United States, Japan, and Singapore. The five most popular products are computers, smartphones, books, electronics products and small home appliances.
Part of the revenue increase was also due to JD’s external logistics business, which handles contract inventory for external retailers and saw revenue increase 80% over the span of the special sale. According to the company, that increase is a testament to the success of the company’s strategy to open up its resources to partners both in and outside of the JD ecosystem. Likewise, JD’s parcel delivery service, bulky supply chain, service+, and cold chain warehouse outbound inventory increased 311, 230, 309 and 110% respectively.
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.