Easyship Solutions & Updates

Lowes Closing Stores & Boeing 737 Max Crash: April 12, 2019 Logistics Update

Steve Longo

by Steve Longo

On 2019 M04 12

by Steve Longo

Welcome to this week’s edition of the eCommerce and Logistics Roundup! Here are a few of the top eCommerce and logistics news stories from the past two weeks, including Amazon Shipping’s national expansion and Lowes’ collaboration with FedEx on a new SameDay delivery robot, plus Easyship’s take on all the news stories!

Amazon Shipping to Deliver Nationally from NYC, LA and Chicago

According to new reports, eCommerce giant Amazon is poised to start shipping nationally across the United States using its burgeoning Amazon Shipping operation from its current warehouses in the New York City, Los Angeles and Chicago metropolitan areas.

After being tested in Los Angeles, Amazon Shipping is reportedly now operating in the three largest metropolitan regions of the U.S. and is a full seller-to-customer shipping service designed to compete with major couriers like UPS and FedEx as a more affordable option for invited sellers.

Per reports, these invited sellers can print labels directly using their existing Amazon dashboard and have them picked up directly by Amazon from warehouses every weekday for ground delivery to Amazon customers seven days a week.

Our take: Much like the Amazon delivery franchise, the robust expansion of Amazon shipping nationally represents the company’s attempt to move from an eCommerce and technology business into a full-fledged courier designed to compete with major brands like FedEx, UPS and DHL.

Amazon’s muscling into the logistics sector represents a threat to the longtime dominance of major couriers but also an opportunity for sellers, who could stand to benefit from the additional shipping option that Amazon now offers and a simplified fulfillment and shipping process by a major brand like Amazon.

Lowes to Collaborate with FedEx on SameDay Delivery Robot Project

In our March 3 update, we explored FedEx’s new SameDay delivery robot project, which promises to utilize autonomous robots to deliver parcels to customers. Now, new reportshave indicated that retailer Lowes is partnering with the courier to assist with the testing of the autonomous delivery bots.

The test reportedly involves having the robots deliver a drill bit or gallon of paint to a construction site quickly from an online order to see how effective it can be accomplished.

"The convenience and capability the FedEx SameDay Bot is being designed to offer has the potential to simplify and speed distribution through same-day delivery from your neighborhood Lowe's," a top Lowes supply chain executive stated.

The FedEx robot is currently scheduled to begin testing in certain markets in the middle of 2019.

Our take: Lowes’ involvement in FedEx’s groundbreaking project could prove critical in helping to successfully test out the automated FedEx delivery robot and accelerate its deployment to specific markets in the middle of the year.

If widely implemented in the near future, the FedEx delivery robot and similar Amazon robot delivery service could help to revolutionize parcel delivery, completely eliminating the human element from it and replacing it totally with AI.

Lowes in particular could benefit from this technology, as it recently announced in late 2018 that it was shuttering 51 underperforming brick-and-mortar retail stores across North America.

Fitch Ratings: U.S. Transportation Growth to Plateau

According to Fitch Ratings’ spring 2019 Transportation Trends report, revenue growth remains robust in all key U.S. transportation sectors, though growth is predictedto level off soon due to numerous recent events.

The most notable potential roadblock to growth is air transportation, which could suffer due to the recent Boeing 737 MAX crashes in Ethiopia and the Java Sea near Indonesia, which ultimately could lead to a more prolonged grounding and additional cancellations, negatively impacting the manufacturing and logistics sectors.

Cargo growth and port volume both saw increases in 2018, though their numbers are expected to level off in 2019 as tariff deadlines pass and the shipping industry continues to consolidate.

"Other disruptors worth keeping a close eye for ports on in the coming months include initiatives towards increasing terminal automation, and trade policy implications on imports and supply chain decisions, and shipper preparations ahead of the roll-out of IMO 2020 fuel regulations," stated Emma Griffith, Senior Director, Global Infrastructure & Project Finance at Fitch Ratings.

Toll road revenue also tempered in late 2018, though Fitch believes that rising inflation and strong GDP growth will likely lead to an increase in revenues.

Our take: The growth of eCommerce in recent years should at least partially insulate the U.S. logistics sector from any major potential slowdowns. However, global events such as the aftermath of the Boeing 737 MAX airplane crashes and additional tariffs from burgeoning global trade wars could further dampen the growth of the logistics sectors both in the U.S. and abroad.