Welcome to our latest eCommerce and logistics news roundup!
This week, we’re talking about how a UK startup Magway plans to create a revolutionary shipping solution that will help the environment, why Amazon is lifting its ban on FedEx (and why it was there in the first place), and the effects of the new US-China trade deal.
And, in case you missed our last logistics roundup, you can still read it by heading over here!
UK Startup Magway Hopes to Revolutionize Green Shipping with “MagLev” Pods
Elon Musk’s “Hyperloop” may not have come to fruition (yet), but UK-based transportation startup Magway plans to adapt the concept to create a revolutionary new shipping system that will also be much friendlier to the environment.
Magway’s plans will see shipping carried out through small underground tunnels using magnetic levitation pods. The company says the new system could be used for the fast delivery of groceries, Amazon packages for end consumers, as well as allowing quick, volume-driven B2B deliveries. The pipelines and pods will be powered by electromagnetic waves generated by magnetic motors - so exactly like a roller coaster, but for things, not people.
The best part, though, is that this system will significantly reduce the UK’s carbon emissions. Magway believes that once it’s up and running, the delivery pipelines will cut the UK’s carbon emissions by six million tonnes per year by 2050.
The only problem? Cost, of course. Magway predicts that the project will cost £2.4 million per mile, plus up to $4.5 million for overhead costs that include planning, installation and legal fees.
Easyship’s Take: Look, we’re all for green shipping solutions and in theory, Magway’s project sounds like a great idea. It would certainly be a big boost for retailers and consumers in the UK. But, Elon Musk couldn’t get his “Hyperloop” project off the ground, so we can’t help but look at Magway’s version with a bit of skepticism. The costs alone could be prohibitive.
FedEx is Back in the Fray for Amazon
Amazon has lifted its ban on FedEx’s Ground and Home services, after initially blocking third-party Marketplace sellers from using the courier’s affordable shipping solutions over the holiday period.
The ban was enforced in December, with Amazon saying they had concerns over FedEx’s “delivery performance.” The move didn’t sit well with many Amazon sellers, especially the small retailers who use FedEx’s cheaper shipping services to keep their costs down while qualifying for Amazon Prime status. Instead, they were forced to use fulfillment solutions provided by Amazon or UPS - both of which are significantly more expensive.
Now though, Amazon says its concerns over FedEx’s services have been allayed, so they’re happy to allow its sellers to use their services again.
Easyship’s Take: This is great news for all Amazon sellers, but for small businesses in particular. Being able to offer products on Prime means they get greater visibility and get better placement in Amazon search results and category landing pages. By removing FedEx’s affordable shipping services, Amazon limited these sellers’ ability to offer Prime delivery. But now, with the ban lifted, these retailers are back in the game.
US-China Reach Trade Deal, But How Will it Affect Shipping?
Last week, the US and China finally signed the first phase of a new trade deal that had many people around the world sighing in relief. The 86-page agreement will see China increase its purchase of American products and services by at least $200 billion over two years and the US will halve tariffs on a $120 billion list of Chinese goods. Punters are hopeful that this will see shipping to China or to the US return to normal volumes.
China’s purchases will include $7.7 billion of manufactured goods, $32 million of agricultural products, and $52 billion of petroleum and energy products. In addition, China has made a commitment to strengthen its intellectual property rights and be stricter about cracking down on IP theft by Chinese companies.
Easyship’s Take: On the surface, this seems like a great leap forward for the US-China relationship. But, while this deal has the potential to make waves in the global shipping industry, it’s going to take a while for these effects to be felt. After all, the damage caused by a two-year trade war isn’t going to be erased overnight.