Supply Chain Weekly Wrap Up from 10/25/19-10/31/19

Amazon unveils free grocery delivery

Amazon has announced that it will offer its Amazon Fresh service to prime customers for free. The company revealed that it would be removing the $14.99 monthly fee, which according to studies acted as “a key deterrent” for members to adopt the service. The announcement comes after Amazon Fresh’s market share declined from 5.9% to 3.1% in the year through to August, while competitors Instacart’s and Walmart’s share both increased in the same period.

Allowing Prime customers to have free access to the Amazon Fresh service may not only gain back market share but could also be a “game changer” for the grocery industry. The number of U.S. Amazon Prime members was recorded to be 105 million at the end of June. If the new change follows a similar trend to when Amazon rolled out free one-day shipping, this could lead to an increased amount of orders and an increased spend per order. More importantly, it could change shopping behavior as consumer’s may switch to doing their grocery shop through Amazon Fresh rather than heading to a traditional grocery store.

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Mastercard to bring traceability to the food supply chain

Mastercard have partnered with Envisible, a food supply chain traceability provider, to power Envisible’s “Wholechain” supply chain traceability system using blockchain technology. The solution will be first used by Topco, a US food cooperative, to allow customers to trace the supply chain of seafood.

Topco plans to run the pilot project with a number of its cooperative members but will start with the US supermarket chain Food City. The pilot will provide customers to see the full supply chain of the sea food products by scanning a QR-code with the Wholechain app. In a press release, Scott Caro, senior vice president of Fresh at Topco, highlighted that consumers expect “reliable information about the food that they eat” and that the company is excited to run this pilot to provide this for consumers.

This isn’t the first example of blockchain being used in the seafood supply chain as the IBM Food Trust is also running a pilot project with Walmart. If these pilot projects are successful, blockchain technology maybe rolled out across more products to provide wider food supply chain traceability.

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Companies say ‘no’ to Arctic shipping

The Northern Sea Route, the Northwest Passage and the Transpolar sea route are three major shipping routes through the Arctic ocean. These routes are used by companies as a short-cut between Europe and Asia. However, due to climate change the routes can be used for a longer period of time throughout the year. Consequently, the amount of environmental damage caused by passing ships has increased. As a result, several companies including Nike, Gap and H&M have pledged against using these shipping routes as part of their sustainability promises.

The promise comes as both the shipping industry and firms alike make the effort to become more sustainable. While the Maritime industry is “one of the least carbon intensive shipping modes available” , they are working to tackle fuel pollution, the risk of oil spills and reducing the damage to sea ice – all of which are still significant concerns. Whereas retailers, like Nike, are looking at how they can be more sustainable in their entire supply chains.

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Have a great weekend!