Supply Chain weekly wrap-up: 2/13/15 – 2/19/15

Hard landing for Amazons CEO Jeff Bezos

The drone regulations from the Federal Aviation Administration killed the idea of a drone delivery service with Amazon Prime Air. Jeff Bezos´ future plans provided that packages up to five pounds (which constitutes about 86% of all deliveries) will be flown to the customer within only 30 minutes. The implementation of this vision would have had an enormous impact on the supply chain and transport logistics industries.

However, according to The New York Times, the proposed regulations announced on Sunday are tailored for commercial drones, and prohibit drones from flying faster than 100 miles an hour and higher than 500 feet – regulations, Amazon under certain circumstances could deal with. But the devastating claim of the FAA states that the operator must be continuously able to see the drone without binoculars.

So, the vision of drone delivery is realizable maybe in technological terms, but for now it is not realizable due to government regulations.

To read the full story, click here.

Keeping the food supply chain safe

One in six Americans comes down with food poisoning or becomes ill due to expired or adulterated meat every year – the food supply chain is therefore trying to improve its safety and quality.

One of the latest reports from SupplyChainBrain covers some of the challenges associated with keeping our food supply safe, and this is no easy task. On the one hand, globalization is affecting the quality of food because of a lack of transparency along the entire supply chain. To supply the customer demand with fresh and exotic groceries at all times of the year, suppliers turn to various sources across the globe, making it difficult to trace every link in the chain.

On the other hand, news about food recalls (more than 400 food recalls in 2014), withdrawals and contamination blaze the trail through social media within seconds. There is certainly a growing awareness about what people are consuming. It is safe to say the food industry has a lot on its plate in terms of ensuring safety for consumers.

To read the full story, click here.

Dispute at American West Coast port slows automotive industry

Since summer 2014, members of the ILWU (International Longshore and Warehouse Union) working at the West Coast ports, have been involved in a shipping dispute with the PMA for a new collective agreement. Electronic and other car parts made in Europe or Asia are currently only reaching the American West Coast by ship on a very limited basis.

According to the report from USA Today released on February 15^th, the shortage is why big automakers like Honda, Toyota and Nissan are starting to slow their production. How long the problem will influence not only the global car business in affected regions but also harm entire supply chains of import-dependent companies, is yet to be seen.

Alternative delivery points are seaports along the Gulf Coast which are not affected by the West Coast labor disruptions, but the longer transportation path creates enormous costs.

To read the full story, click here.

Have a great weekend!