The Friday Report: July 3rd, 2020

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

New CPG Contactless Delivery Task Force Launched

The Consumer Brands Association announced the launch of a major industry effort focused on contactless delivery.  The task force includes representation from 23 consumer packaged goods companies and will:

  • Study the impact of contactless deliveries
  • Develop uniform standards for contactless deliveries
  • Research how implement contactless deliveries at scale throughout supply chains
  • Concentrate on electronic bills of lading
  • Examine use of online dashboards, data analytics, booking and instant quotes
  • Seek to gain federal clarity on different state-by-state approaches

Stay at Home Cooking Binge Depletes McCormick Inventory

By the end of 2020, McCormick plans to transition every one of its factories to 24-hour operations to handle the increased demands brought on by consumers cooking more at home. So far, McCormick has experienced 26% year-over-year sales growth. In addition to the ramped-up production, McCormick has also onboarded new contract manufacturers.

Expanding its manufacturing capacity before the holiday baking season is a top priority for McCormick.  The company noted that receiving departments of retailers are often hamstrung by the need to deal with continual restocks of urgently needed goods including cleaning supplies, delaying the arrival of its goods on store sales floors.  McCormick notes that there tends to be a lag time of a week in getting restocking orders from the stores to the vendors to meet the need for its products.

FedEx Reports “New Normal” Peak Surcharges

With the expansion of e-commerce, FedEx reports that peak surcharges have become an accepting part of the normality of the new business environment.  Moving forward this year, customers are anticipated to pay more in November and December.  High volume ground operations and a range of overseas routes during the COVID-19 pandemic are part of the issue.  Peak surcharges were introduced in China and surcharges were added on U.S. domestic SmartPost, Express and FedEx Ground packages in early June following similar actions were taken by UPS.

FedEx representatives explained that the uptick in e-commerce is now viewed as a structural change, one that is permanent.  The company is now focused on transitioning B2C parcel volume into profitable territory.  Surcharges are an important element of this strategy.

The company reported that the current peak surcharges are planned to remain in place through the end of 2020.

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