Today, we’re taking a look at the latest in logistics news and developments in the global marketplace. From Amazon to Alibaba, e-commerce companies are constantly improving systems and technology in order to lower the cost of delivery of products in the last mile to consumers. Here’s what’s happening now.
Global logistics are expected to grow by 10% through 2020 according to a report from Technavio. Alibaba’s logistics arm, Cainiao, gets new venture capital logistics, systems and technology development. Deutsche Post DHL Group reported consolidated EBIT (operating profit) for 2015 of EUR 2.41 billion ($2.68 billion). Because of high shipping costs, only 15% of EU consumers shop via the internet in other EU countries, whereas 44% invest in online stores in their own country. Amazon spent $11.5 billion on shipping in 2015 but just completed a 5-7-year deal to lease 20 Boeing cargo planes in an effort to reduce delivery costs.
Whole Foods invests in food delivery company Instacart and signs a new five-year delivery deal. A report by Lambert Smith Hampton (LSH) suggests a critical shortage of warehouse space by 2020 due to rapid growth of e-commerce in the UK. EU’s Hermes BorderGuru launches operations in the US to capitalize on global e-commerce growth and provide global logistics fulfillment for retailers. If you’re walking around London, you may see Starship Technologies’ delivery bots beginning their trials and they’re scheduled in New York in spring. Meanwhile, DHL is testing Rethink Robotics’ Baxter, a first-generation “cobot” in Germany and an undisclosed client location in the US.
Growth in global e-commerce logistics may approach 10 percent in 2016-2020 period
Despite a slowdown in world trade this spring, the e-commerce logistics market is expected to grow at 9.69 percent through 2020, maintain analysts at Technavio, a leading market research company with global coverage, based in London. Researchers say cross-border online shopping is particularly strong in emerging markets.
These countries have recorded an increase in foreign goods consumption and are driving the demand for e-commerce logistics. During the forecast period, China is expected to emerge as the largest market for online shopping, as their growing middle-class population is increasingly spending on foreign products. Thanks to this development, the logistics market in China is predicted to exhibit significant growth and contribute to the overall revenue of the global e-commerce logistics market. Via logisticsmgmt.com
Connecting Asia’s startup ecosystem
Alibaba’s logistics spin-off Cainiao has completed an funding round, the ecommerce firm said today. Reuters reports that the amount is undisclosed. Singapore’s Temasek and GIC, Malaysia’s Khazanah Nasional, and China’s Primavera Capital are the investors.
The subsidiary was founded in 2013 in order to ensure faster deliveries from the merchants on Alibaba’s Taobao and Tmall marketplaces to Chinese consumers. Since Alibaba doesn’t hold its own products, it was losing out in areas like same-day or next-day deliveries to rivals such as JD, Amazon, and Walmart-owned Yihaodian.
This is the first ever investment for Cainiao, which uses big data to accelerate package shipping with 15 delivery firm partners in China. When it was established, Alibaba and some key partners in the Chinese deliveries industry vowed to throw in US$15.4 billion over five to eight years to stretch the system across the country. Cainiao also owns warehouse space. Alibaba itself has invested in some of its logistics industry buddies, such as YTO Express. Via techinasia.com
Deutsche Post DHL registers EUR 2.41 bln ($2.68 billion) operating profit for 2015
The EBIT contribution of the Post – eCommerce – Parcel (PeP) division was EUR 1.1 billion ($1.22 billion) and the DHL divisions generated an operating profit of EUR 1.66 billion ($1.84 billion), postandparcel.info reports. Deutsche Post DHL Group said that the full year EBIT was down on 2014’s EUR 2.97 billion ($3.3 billion) but attributed this to “one-off expenses and investments recognised by the Group including expenses related to the new direction of the IT renewal in the Global Forwarding business unit”.
The Group had adjusted its earnings guidance in October 2015 due to one-off charges. Consolidated revenue in 2015 was EUR 59.2 billion ($65.74 billion), up 4.6% on the EUR 56.6 billion ($62.86 billion) report in 2014. Revenue in the PeP division grew by 2.8% in 2015 to EUR 16.1 billion ($16.88 billion). EUR 6.3 billion ($7.0 billion) of this divisional revenue was generated by the ecommerce. Via thepaypers.com
European ecommerce slowdown caused by cross-border package shipment high prices
And this happens when 37% of retailers now sell via the internet in their own country, according to recent research by B2C Europe analysing the shopping habits of online consumers in eight countries in the Eurozone, emarketservices.com reports.
The costs can be as much as five times those of domestic transactions in each member state of the European Union (EU), representing an obstacle for the online sector. In addition, only 15% consumers shop via the internet in other EU countries, whereas 44% invest in online stores in their own country. The data highlights the fact that the cross-border packaging service is inefficient and deters consumers when buying or selling in other EU countries. Via thepaypers.com
Amazon takes flight with Boeing cargo fleet
Amazon (NASDAQ:AMZN) has entered into a deal to lease 20 Boeing cargo planes as the retailer continues to find creative solutions to lower delivery costs. The deal extends for five to seven years, and each jet can transport roughly 88 tons of freight.
Amazon spent $11.5 billion on shipping in 2015, and that number continues to rise at double-digit rates. Shipping costs rose 32 percent from 2014 and 74 percent from 2013, according to CNN Money. Skyrocketing shipping costs are compromising the retailer’s growing sales and profits, spooking Wall Street and forcing Amazon to entertain solutions. Via fierceretail.com
Whole Foods to Invest in Instacart, Signs New Multi-Year Delivery Deal
Whole Foods and Instacart are taking their relationship to the next level. The $10 billion national grocery store chain is making an investment in the four-year-old delivery startup, according to multiple sources. The size of the deal could not be learned, but sources say the deal is essentially done, barring an unforeseen last-minute change of heart.
The two companies have also signed a five-year delivery partnership, these people said, making Instacart the exclusive delivery partner for Whole Foods’ perishables business. Other terms of the deal could not be learned, but Instacart’s commercial agreements with its grocery store partners typically include a revenue sharing component. Spokespeople for both companies said they had no information to share. Via recode.net
Growing too fast: can UK logistics keep up with expanding ecommerce?
The runaway growth of ecommerce may be swiftly de-railed in a few years, as a new report suggests that warehouse space is simply not growing fast enough to meet demand. The study, coming from property consultancy Lambert Smith Hampton (LSH), found that, even if current rates of warehouse construction continued, by 2020 the demand for industrial space will exceed supply by 25m sq. ft.
Certain retailers such as Amazon and Tesco rely on a network of warehouses in order to both keep goods sufficiently in stock and to be able to deliver them in a short amount of time. According to LSH, a “significant and unprecedented increase” in the building of warehouse space is necessary to ensure that this can continue. Via retailgazette.co.uk
Hermes BorderGuru Brings Logistics and E-Commerce Solutions to US Market
Hermes, operator of the largest business-to-consumer (B2C) parcel shop network in Europe, announces the expansion of its retail supply chain digital services to the United States e-commerce market. Hermes’ BorderGuru is now going beyond the European market it already serves and offering U.S. retailers integrated logistics and e-commerce solutions.
BorderGuru now provides European and North American retailers an efficient and cost-effective means to sell and deliver goods worldwide. With BorderGuru, retailers and brand manufacturers can leverage Hermes‘ e-commerce services tailored to their individual business. Global full-service e-commerce solutions extend from managing IT and online store software to offering highly scalable warehousing and fulfilment return capabilities. Via pointofsale.com
Self-driving ‘ground drones’ hit the London streets
The mopeds of delivery drivers everywhere are set to be ousted by ‘ground drones’ that can navigate city streets by themselves. The invasion has begun with Starship Technologies’ delivery bots beginning their trials in London (pictured) – and they are scheduled to begin trials and in Now York in spring.
It is as yet unnamed, but Keith Cornell, Senior Adviser at Starship told MailOnline: ‘We may hold a contest and they may have multiple names. They might have personalities of their own.’ Unlike robots designed to resemble humans, Starship’s bot is purely functional with a large compartment to hold deliveries, the equivalent size of two grocery bags.
The idea is that consumers could call for a delivery, which is carried to their door by a robot in between five and 30 minutes, for as little as £1 (60cents). Each six-wheeled ‘ground drone’ is almost completely self-driving, but to begin with will be half controlled by a human operator. Via dailymail.co.uk
Advanced robotics set to transform logistics industry
One fascinating example is the collaborative robot (cobot) Baxter from Rethink Robotics. Baxter, a first-generation cobot, was designed specifically to work safely around humans. Utilizing the availability of low-cost sensors and camera technology, Baxter has plastic arms that stop automatically when they come into contact with an object; a head that scans its environment and slows down when it nears people; and “eyes” that enable it to identify and pick up objects.
In our U.S. operations, for example, DHL has been partnering with a customer to test Baxter to find out first-hand how robotic innovations will change our day-to-day business. Baxter is easy to program and can carry out commonplace tasks such as stacking boxes on a conveyor belt or assembling two items. Baxter can do even more though. It performs typical co-packing tasks too, such as placing bottles onto trays. While Baxter isn’t yet quick enough to meet all throughput requirements, the next generation of even more precise robots are already hitting the market, as the introduction of Sawyer, now on tour in Germany, demonstrates. Via delivering-tomorrow.com
Big logistics challenges for e-commerce
The challenges for e-commerce don’t end with sales and payments, Logistics and getting products to consumer’s front door remain the biggest challenge as consumers demand faster delivery, easier returns and easy payments.