Air freight demand quickly catching up to available capacity
The beginning of 2018 has seen a reverse in the trend of air freight capacity exceeding demand. Numerous factors have contributed to the tightening air freight market in recent months, including the e-commerce boom, a number of freighter cancellations out of Asia, a flourishing global economy as well as a shortage of qualified pilots. Furthermore, overcrowded airport terminals are becoming an issue, with 189 airports around the globe being designated as ‘full’ and another 100 airports set to receive this designation over the next 10 years. These factors have led to increased rates, especially within Europe.
Shippers are being encouraged to consider a multi-modal shipping strategy so there is not too much reliance on one source of transportation. Furthermore, in order to meet the growing consumer expectations for speed, it is important for shippers to better forecast demand, especially when peak seasons come around, and reserve space far enough in advance to avoid delays.
For more details on the changing air freight capacity landscape, click here.
DHL and GM join forces in China to lead change in manufacturing
DHL workers are now working side by side with GM manufacturing employees at the Baojun car assembly plant in Liuzhou China. Overall, third party contractors are playing a bigger role for GM across its entire network of 17 joint-assembly plants in China. These partners are transporting materials and managing the parts warehousing operations as well as the delivery of those parts to the assembly plants. With regard to DHL, its workers are putting together parts kits and delivering them just-in-time for a specific vehicle on the assembly line. These kits reduce the number of errors by assembly line workers because they are delivered in the proper order according to a computerized schedule. Assembly line workers therefore do not have the chance to install an improper part, because it was already prepared within the kit.
The use of third party contractors has proven to be a success for GM in China. The company has noticed a significant drop in the number of vehicles assembled with incorrect parts. It has also experienced a significant jump in efficiency. The number of vehicles coming across the assembly line is increasing while at the same time, the number of mis-built vehicles is decreasing.
To find out more about this partnership and its impact on manufacturing, click here.
Amazon and Whole Foods – so far, so good
There was a lot of chatter about Amazon’s purchase of Whole Foods last summer, and the impact this acquisition would have on the food supply chain and buying process. Some initial results are in, and the move has proven to be quite beneficial for Amazon’s grocery delivery service, AmazonFresh. Products sold under the Whole Foods label helped push the delivery service’s sales to $135 million, up 35 percent in the last four months of the year. Bacon and Parmesan cheese were among some of the top sellers.
While online grocery sales currently only account for a tiny portion of the $800 billion grocery market, experts believe e-commerce will play an increasing role within the industry. Amazon has positioned itself for the expected rise in purchases nicely with its acquisition of Whole Foods and various delivery services. Aside from the AmazonFresh service, users can purchase Whole Foods products through Amazon Prime Now and the company’s standard platform. The true impact of this acquisition is yet to be seen, but if the final four months and current e-commerce trends are any indication, it seems to be a homerun purchase for Amazon.
Read more about the latest Whole Foods results on Amazon here.
Have a great weekend!
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