27 March, 2019 // Amazon to report its carbon impact. (Bloomberg). Planet Earth’s biggest e-retailer said last month that it will begin to disclose carbon emissions data for its shipping activities. It’s a first step towards a stated goal of making at least half of its shipments carbon neutral by 2030. At Morgan, we believe a focus on sustainability can provide rare win-win opportunities. Since we started measuring and reporting our own carbon emissions in 2009, that focus on better use of natural resources has helped us to identify shipments that can be consolidated, reduce empty truck miles, redesign supply chains with fewer transportation legs and more direct distribution, even shift to less-polluting modes of transit where doing so doesn’t affect customer requirements.
These transformations have added up to substantial carbon savings. Happily, they also often reduce cost and improve efficiency. If Amazon realizes similar improvements, the environmental—and cost—gains could be massive.
Signs the white-hot transportation sector may be cooling? The Council of Supply Chain Management reports slower but continuing growth for warehousing prices, transportation utilization and prices and inventory costs in its latest Logistics Manager’s Index. FedEx and UPS are seeing slower hiring (Wall Street Journal; tiered subscription site) than a year ago at this time. FedEx also reduced its financial outlook (Wall Street Journal) for the second quarter in a row—with the average price per package revenue down 2 percent, U.S. ground services down 6 percent in operating margin and slowing international airfreight demand.
The US Department of Labor also published a study (Commercial Carrier Journal) that refutes claims of recent U.S. driver shortages. American Trucking Association Chief Economist Bob Costello challenged Labor’s conclusions, saying the government researchers “demonstrate some basic misunderstandings about the trucking industry.”
Even the Journal of Commerce’s otherwise boffo outlook story “Growth Explodes for Top 25 Truckload, LTL Carriers” quotes Coca-Cola CEO James Quincy as saying “The good news is 2018 has ended. While freight costs are expected to remain above historical levels, we do not expect to see the same level of year-over-year increases as we saw last year.”
And we thought 2018 was a big year for supply chain tech startups! Venture capitalists continue to pour money into potentially transformative transportation and logistics companies. In just the last month, FourKites, Inc. raised another $50 million (Wall Street Journal reprint, courtesy FourKites) and Japanese investment company SoftBank made a $1 billion bet on Flexport (courtesy Flexport).
We believe in technology’s promise to connect data across suppliers for better visibility and analytics. That’s why Morgan’s founder funded ChronosCloud, a sister company focused on those objectives. At the same time, we realize there’s much more to transformation than just data. Game changing insights come from data, analytics and deep operational experience working in the world’s manufacturing supply chains. That’s why Morgan is so uniquely positioned to transform supply chains for its leading manufacturing enterprise customers.
If the Brexit hits the fan, at least the supply chain is prepared. (BBC News) Even supply chain has its lighter moments: Amid uncertainty over the rollout of a British exit from the European Union, one of the largest producers of toilet paper has increased inventory in UK warehouses and has even resorted to chartering ships to beat any backups associated with changing regulations. David Potts, CEO of major British supermarket Morrisons, says his stores have already seen stockpiling. “We’ve seen quite a tick-up in [sales of] painkillers and toilet rolls,” he told the BBC. “Whether that has any bearing on how people are feeling about Brexit, I don’t know.”