Don’t forget the basics

I’ve said this a number a times and it’s worth repeating…”Don’t forget the basics”. Uber, Amazon, Cloud, crowd-delivery, same day delivery, driverless cars, IoT etc. are all very cool and will, if not already, affect your supply chain. Should you jump on the bandwagon before you miss out?

Just a suggestion…do your homework. Make sure your basic supply chain is in order. How’s that network? what about your carrier partners? Can you manage through a crisis such as another port situation we experienced earlier this year/last year?

Just a few things to ponder. I really enjoy reading and chatting with folks on innovation and yes, it is having a major effect on supply chains but don’t just be a “me too”. Do the math. Make sure you have a solid supply chain. Maybe by being “innovative”, you simply readjust the number or type of carriers or change the percentage of modes of transport used.

Another Update!

Yeah. Ok, finally realizing I can’t do everything. Still trying though so thanks for your patience. I did find out our CPG report will be published next week so be sure to look for that announcement. Also coming out next week is CSCMP’s State of the Logistics Report. For more info on that check out Penske’s blog post.

I’ll be hanging out at local hospital tomorrow and through weekend so if you want to chat I’ll be checking Twitter and email. Otherwise, I’ll be working on our freight forwarding report and some other stuff.

Thanks again for your patience. I promise, newsletter and new, more interesting blog post coming soon.

Cathy

P.S. Update on the hospital situation…all went fine. What was suppose to be a 3 hour surgery turned into 5 hours thanks to a stubborn valve. Otherwise looking forward to getting my hubby back home within the next few days. Thank you very much for your well wishes!

June Update

Thank you to all that have signed up for the newsletter. I’m super excited about it! For those that have signed up, the original plan was to get the newsletter out today, June 12th. I’m still aiming for that – probably this evening at earliest. The delay is due to a number of great things going on at Ti as well as some personal things.

So, here’s what’s up:

  • Work is well underway for the annual Freight Forwarding report. It’s scheduled to be published in mid-July.
  • In addition to the Freight Forwarding report, the team is also working on a CPG Logistics report. I’m not sure when that’s to be published but it should be a really good report.
  • Did you know Ti also has a consulting division? Yes and it’s booming!! Lots of projects going on. We are so appreciative of the confidence folks have in us.Thank you!
  • And on a personal note, the hubby is getting ready to have some surgery next week so I’ll be hanging out at the hospital for much of next week. I’ll still be working, chatting with folks but it will be around hubby’s schedule and needs so thanks for the understanding.

So, that’s what’s up in a nutshell.

Thanks again for taking time to read the blog. Be sure to check out the tweets for the latest logistics news.

Cathy

JD.com’s Ambitious Plans – Can it Catch Up to Alibaba?

While Alibaba tends to grab much of the headlines, the second largest ecommerce company in China is also creating some waves and it seems that logistics is indeed an important part of the competition between the two.

The differences between the two companies can be noted in each one’s approach to logistics. Alibaba has created a consortium, Cainiao or China Smart Logistics Network, in which its delivery partners such as SF Express and YTO Express handle the fulfillment and final mile delivery. Meanwhile, JD.com established a logistics subsidiary and offers last mile delivery and fulfillment options itself for not only its own customers but to others as well. According to JD.com, about a third of the 60,000 third party sellers on its websites use the company’s delivery infrastructure. As of Dec. 31, 2014, the company operated 123 warehouses and a total of 3,210 delivery and pickup stations. Its delivery network covered 1,862 counties and districts in China.

However, it seems there are some changes from Alibaba. It has taken an equity stake in Singapore Post and just recently in YTO Express. In Ti’s recent brief, Alibaba and partners look to lead in global express revenues, the company’s International represented only 9% of its total revenue for first quarter 2015 which prompted Alibaba’s CEO, Daniel Zhang to say, “We must absolutely globalize”. Furthermore, YTO’s chairman noted that Alibaba and YTO plan to build a global express delivery service that will offer a variety of products and better last-mile service.

So, how is JD.com responding to these types of changes? It is doing so in a few ways. As seen by Alibaba’s recent announcement, it plans to focus on global. JD.com is also looking into this growing trend and in April of this year, launched JD Worldwide. Currently it has 600 merchants selling. For the service, JD operates a few different models.

• Rented bonded warehouses in a few cities in China.
• Some merchants utilize space in the rented bonded warehouses.
• Dock shipping mostly through third party merchants.

In addition, in a well-publicized announcement, Japan’s Uniqlo became the first international clothing brand to use the company’s warehouse services for same day delivery. The logistics and warehousing pact is part of a broader agreement under which Uniqlo also opened a flagship store on JD’s marketplace platform.

So, for the time being, it seems that China will continue to be at the heart of JD.com’s strategy. And, while first quarter 2015 revenues increased for the company, its fulfillment costs did as well thanks in part to orders fulfilled during the quarter were 227.2 million up from 129.3 million for first quarter 2014.

As a result, the company is looking at ways to reduce such costs and with the formal launch of its wholesale business, it is looking towards crowd-sourcing delivery. It believes this model will enable it to serve more customers. How it manages this type of delivery will be interesting to watch. The company takes special pride in the fact that its delivery employees are trained and easily identified by their uniforms for last-mile deliveries.

Once the Chinese government approves online pharmaceutical sales will be another area of interest to watch. JD recently announced a partnership with one of the country’s largest pharmaceutical companies, Shanghai Pharmaceutical (which also has a logistics arm), to develop its online healthcare business.

In conclusion, much like Amazon, JD.com is evolving from its original concept of a B2C marketplace. This evolution fits with the overall evolution of ecommerce as demand and expectations become more sophisticated. But, at the heart of it remains the customer. As noted by Haoyu Shen, CEO of JD Mall, “Whoever can provide a best customer service always wins.” Perhaps whoever also has the most efficient logistics network within China connecting to its Asian neighbors and globally will be the winners in this race.

 

P.S. After I posted this article, it was announced that JD.com had invested $70 million in China’s largest fresh produce e-tailer, FruitDay. FruitDay will use JD’s nationwide fulfillment infrastructure. The majority of FruitDay’s produce is imported – smart move by JD.com.

Walmart helping to change how we buy online

Ok, so maybe my suggestion to buy cute shoes straight from Google’s search page may not have made alot of sense but it is a thought to ponder. The way we buy cute shoes and other items online is changing and social media is going to play a bigger role. Did you notice the Walmart and Alibaba partnership with messaging service app Tango this week? a Tango Shop will be created on the app for Tango users to shop for goods from Walmart and Alibaba’s Aliexpress.

According to a CNET article, Tango’s primary growth has been in the US, but it also has a large presence in the Middle East and in parts of Asia. A smart move for Walmart which has been struggling to catch up just with Amazon here in the US. This could be a great move for the large retailer globally.

And, as I sit here writing this, another announcement has just come across – Walmart will offer mobile payments to 25 Walmart – owned stores in Shenzhen. Customers at those stores will be able to use Alipay.

Hmmm….is Walmart getting cozy with Alibaba? Will they team up against Amazon here in the US? Certainly something to think about.

A New Way to Order Those Cute Pair of Shoes?

Just launched last week, Google now allows users to order food straight from its search results. The way it works is that when a user searches for a restaurant that offers delivery, Google will now include a “Place an Order” option which users click on. Users then click on the delivery service they want to use (currently includes Grubhub, Delivery.com, East24, BeyondMenu and MyPizza.com) and will then be directed to that particular website so that the user can finalize the order.

The service is only available in the US for the time being and only on mobile devices. Google also plans to partner with more companies…..

Yes, bells and whistles started going off in my head over what this could mean for the logistics industry. Can you imagine placing an order for those cute shoes via Google’s search and then being given a choice of the USPS, FedEx, UPS, a regional parcel provider or one of the many new start-up same day delivery providers to deliver your goods? Even better, an additional option of alternative locations to deliver the cute pair of shoes, what time to expect delivery or even if “free shipping” is available?

Google has certainly had its ups and downs in competing against the likes of Amazon. It does offer its Google Shopping service but it’s one that I constantly forget about and when I do remember it, I find it not exactly the most helpful. But, perhaps now they’ve hit upon something – utilizing the one thing that made them a household name, its search capabilities.

Of course, I can hear the arguments against this possibility, primarily taking consumers away from retailers’ websites but here’s another thought..does it really matter? A sale is a sale. Besides, for those with an omni-channel presence, these retailers could potentially take advantage of a possible Google Search option by promoting an “in store pick up” price versus an online price for example.

Could something like this replace the marketplace concept? I think it has potential particularly as e-commerce continues to evolve and mobile takes over from laptops and desktops. Time is a precious commodity and this could greatly reduce the number of click throughs and thus speed the buying process along.