More demand, extra charges
On Monday, UPS announced its plans to begin charging retailers extra fees to deliver packages during busy periods. This includes the weeks leading up to Christmas and Black Friday, events that have become increasingly straining due to the rising interest in online sales. Many companies such as Walmart and Macy’s have been increasing their e-commerce businesses over the years, and in turn relying on UPS to handle the surge in their shipments seen in these busy periods.
This change in delivery charges will force retailers to consider where they will regain these extra costs. Options could include raising shipping prices for consumers, increasing the price of goods or even making the decision to take on the extra costs for themselves. It will also effect the retailers’ ability to compete on shipping prices, as lowering delivery costs for consumers may no longer be a viable option. UPS will introduce these charges as a means of compensation for the extra pressure arising from busy periods and the need to add many more planes, trucks and thousands of extra staff.
Read more on UPS’s decision here.
Amazon is rocking the boat, again
This week, the supply chain industry has been focused on Amazon’s plans to purchase Whole Foods Market for approximately $13.7 billion. It will be the biggest purchase for Amazon to date, aiding in its expansion into the grocery industry and its already existing initiatives including its Amazon Go retail concept and AmazonFresh. It will allow the company to expand its customer base through offering more fresh produce and gaining a significant amount of ideal locations, an estimated 450 stores from across 42 states. The Whole Foods Market’s stores will remain under the same name but benefit from Amazon’s innovative nature, improving customer experience as well as convenience.
Amazon’s acquisition shows its desire to further takeover the grocery market, combining its online offerings with brick-and-mortar stores. Analysts believe it will have a big impact on the entire grocery industry. Competition between supermarkets will no doubt rise due to Amazon’s ability to price aggressively and its innovative nature. It opens up many opportunities for Amazon to integrate its existing concepts into the Whole Food Markets stores and serve a more varied customer base. Only time will tell how the purchase will affect the industry.
Find out more on the acquisition here.
Supply Chain & Logistics Summit & Expo
This week, I had the pleasure of attending the 19th annual SCL Summit in Barcelona, an event that brings together talented individuals from across the supply chain industry. The three-day event focused on four key streams: Supply Chain Strategic Planning & Management, Logistics Excellence, Technology Deployment and Roundtables & Workshops.
Throughout the various talks presented in these four categories, top trends arising in the industry were discussed. Buzzwords such as sustainability, integrated business planning and collaboration were explored and frequently mentioned over the course of the three days. This coming Monday, an event review containing my main takeaways and highlights will be published. Make sure to keep an eye out for it!
To learn more about the event and the talks held there, click here.
Have a great weekend!
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