A few weeks ago, I wrote about Kernel, a New York City startup from Chipotle Mexican Grill founder Steve Ells, which uses a robotic arm to flip plant-based burger patties and a conveyor belt to move dishes along the assembly line. Humans put on the finishing touches and package the meals for customers to pick up. I thought the idea of a robotic restaurant was pretty interesting, and this week I saw a similar concept in person. I took my family to Kura Sushi, which is a revolving sushi restaurant. You order through a computer system at the table and a few minutes later an autonomous bot pulls up to your table with your beverages on a tray. Next to your table is a multi-tier conveyor belt. On the bottom level, dishes make their way around the restaurant, from salmon nigiri to wagyu strips. If you want the item, you simply press on the spring-loaded tab, the top opens, and you grab the plate (all plates cost $3.90 to make it easy). You can also order custom items, which are delivered on the top level of the conveyor. Empty plates are put into a slot which tallies up your bill. And for every 15 plates, the table gets a prize from a toy dispenser located above the conveyor belt. The food was delicious, my kids were entertained, and the experience was pretty convenient. And now on to this week’s logistics news.
Amazon has delivered more than 5 billion items within a day globally and increased its same- or next-day delivery rate by 30% year over year, the company announced on Tuesday. “Tens of millions of our most popular items are available with free Same-Day or One-Day Delivery, which means Prime today offers 20 times more selection that can be delivered twice as fast as when Prime first launched…” the company said in a press release. The company noted that it offers same-day delivery in more than 120 metro areas across the U.S. In the first half of 2024, the online retailer has also reduced the distance items travel by 10% year over year. Amazon said it has regionalized its network to get products closer to shoppers, “which means items are traveling fewer miles and experiencing fewer handoffs between the time an order is placed and the time it arrives on customers’ doorsteps.”
There’s no end in sight for the freight recession, and the downturn is reshaping dynamics in the industry. A lack of certainty looms over experts regarding when the trucking industry could recover from its slump, and there was little good news in the second quarter. According to the recent AFS Logistics and TD Cowen freight index report, truckload rate per mile has continued to slip this year, and the trend is set to continue for a sixth straight quarter. At the heart of the problem are simple economics. When COVID-era consumption surged, trucking capacity ballooned to embrace it. But a few years later, high interest rates have pressured Americans’ spending habits, leaving the industry with a supply-demand mismatch.
When the world’s biggest supplier of wooden pallets tries to recover its lost property from junkyards and hard-to-find lots, things can get ugly. “If you’re in Europe, it goes relatively easily. If you’re in Alabama, unfortunately sometimes a guy comes out with two dogs and a shotgun,” said Graham Chipchase, chief executive of Brambles, which owns and rents reusable pallets to companies including manufacturers, suppliers and retailers. Wooden pallets keep global supply chains humming, carrying everything from soda cans to washing machines. Yet millions of these portable platforms go missing every month, either lost, stolen or broken. Finding them is an additional load for the multibillion-dollar industry. While the product costs only around $20 each and is typically made of sawed wooden planks held together with nails, suppliers like Brambles own hundreds of millions of pallets. Replacement costs can quickly run to millions of dollars each year.
In a stride towards sustainability, XPO Logistics and Daimler Truck UK Limited have announced that their partner site in Willen, Milton Keynes, has achieved carbon neutral status. The certification, awarded by Carbon Neutral Britain, encompasses the expansive 140,000 square foot distribution center and the domestic UK distribution of aftersales parts. This center, which began operations in 2022, stands as a testament to the power of partnership in advancing sustainability goals. The journey to carbon neutrality involved several initiatives aimed at controlling and reducing emissions. The site was built to BREEAM ‘Excellent’ standards, and it utilizes green energy to complement on-site renewable energy generation from a solar array. Efficient material flow management minimizes waste, while resources are reused wherever possible. High rates of packaging material segregation and recycling are maintained, rainwater is harvested to lessen demand on water resources, and biodiversity is promoted with on-site bee hives, rewilded land, and natural attenuation ponds. Moreover, sustainable travel plans are available to all colleagues, encouraging walking and cycling to minimize road journeys. The installation of advanced LED lighting systems with zoning control technologies further enhances energy efficiency.
Efforts by the White House to onshore manufacturing jobs and incentivize U.S. emissions reductions are giving a lift to 3D-printing companies, many of which had previously looked to Asia for international growth. These small companies are enjoying a surge in revenue and raising capital as defense and energy customers, supported by Inflation Reduction Act subsidies, turn to 3D-printing technology as a buffer against supply chain uncertainty and geopolitical tensions. Known as additive manufacturing, 3D printing is the process of creating things by building them up from scratch in layers. Its proponents say it is less wasteful and more adaptable than traditional manufacturing, which involves whittling down larger pieces of raw material to reach the final product. It also allows the creation of items, such as some machinery parts, that would otherwise be too complex, slow or expensive to make domestically. Last year, the U.S. Navy’s lead buyer for attack submarines told a House armed services subcommittee hearing that additive manufacturing is essential for both construction and maintenance.
Bargain site Temu has won over hundreds of millions of customers around the world with its rock-bottom-priced hairpins and pet toys. Some suppliers say consumers’ gains are coming at their expense. A throng of Chinese merchants who supply Temu stormed a company affiliate’s office Monday in Guangzhou, southern China, to protest what they consider unfair penalties that left some bankrupt. Video clips provided by protesters showed scores of angry merchants at the office whistling and demanding a resolution, with police maintaining order. It was one of a number of economy-related protests in China as the country grapples with sluggish growth and a real-estate downturn. Suppliers said that many Temu merchants have shut down factories and incurred debts after Temu started imposing hefty penalties over what the platform deemed after-sales issues. Such issues arise if Temu finds fault with the products delivered or if consumers complain about their merchandise and demand a refund.
As trade animosities flare between the United States and China, and as multinational retailers absorb the lessons of the supply chain disruptions that accompanied the pandemic, businesses are reconsidering their traditional reliance on Chinese factories to make their products. That effort is gaining momentum as retailers take heed of the growing possibility that Donald J. Trump will return to the White House next year, promising 60 percent tariffs on imports from China. In search of alternative suppliers, many companies are looking to India. At least on paper, it stands as the one nation large enough to develop a comprehensive supply chain for parts and raw materials that might eventually come close to replicating China’s.
That’s all for this week. Enjoy the weekend and the song of the week One More Robot by the Flaming Lips.
