Order Fulfillment in Review: July 2016
We're more than halfway through the summer and you can be excused for sleeping on some of the supply chain headlines last month. The sunshine season has a similar effect on all of us! Thankfully, our team of fulfillment-focused analysts stay up to date with the industry's news and views so that you don't have to. As usual, here's our monthly round-up of all the issues and information that caught our eye during July.
Fulfillment Review: July 2016Here are some of the articles and supply chain stories you may have missed last month:
- In case you hadn't noticed, storage space is currently at a premium. Online demand is booming for e-commerce retailers and warehouses are breaking rental records as a result. More than 70 million square feet of space was leased in Q2 2016, making it the highest level in 30+ years and up 6% from the corresponding period in 2015. If you signed a long-term storage agreement early last year, you have our permission to feel suitably smug right now.
- Signs that the economy is inching its way back to health continued last month, as Bloomberg reported a 4.2% gain in consumer purchases despite other lagging economic indicators. Taken together with the news that June posted a third consecutive month of U.S. households buying more goods and services.
- America's railroads continued to feel the full effect of lagging demand for their major cargo types, with an 8.8% decline in carload traffic last month compared to July 2015. There was a tentative hint of optimism from John Gray, AAR Senior Vice President of Policy and Economics, who suggested that increases in consumer spending could help rail freight figures to improve in the second half of the year.
- Road freight figures painted a brighter picture for the US economy as the summer started, posting successive monthly tonnage increases and confirming the industry's annual revenue hit a record $726 billion last year. The American Trucking Association (ATA) also released its annual Trucking Trends report, which provides valuable insight and analysis for anyone with a professional interest in the sector.
- Unilever acknowledged the runaway success of e-commerce subscription services by paying a cool $1 billion for Dollar Shave Club. We did the math for you and that's 1 billion shaves, or enough to keep Seattle's coffee houses clean cut for several months.
- The U.S. Army reported a logistics success that any of us would be proud to claim, citing $6 billion in efficiency savings thanks to a newly developed IT platform that manages its maintenance and inventory requirements.
- The newly expanded Panama Canal is experiencing further growing pains, but at least these ones involve vessels actually using the waterway. Three container vessels collided with walls last month, raising concerns over the safety of the new passage for workers. Not a great start, but we'd still take that over the rush hour commute on our local section of I-95.