Good help is hard to find. And finding good help has become increasingly difficult as the Covid pandemic has caused labor shortages in a number of industries. One industry that has been hit hard is the restaurant industry, where owners and managers are struggling to find servers. A Connecticut restaurant takes a unique approach to tackling the labor shortage: robot waiters. The operator of Shaking Crab’s New London location said the restaurant would use regular waiters and waitresses to explain the menu and take orders, but robots would deliver meals to tables. Robots, which can be summoned by a bell, serve two purposes. First, they are addressing some of the labor shortages in the market. And second, and just as important, they bring a level of novelty to the restaurant that the owners hope to attract customers. The restaurant, which has more than 20 locations in the Northeastern United States and China, will open to the public in early October. And now, let’s move on to this week’s logistics news.
Over the past decade, as we’ve documented here, Amazon has pushed its logistics arm be less dependent on UPS, FedEx and USPS for delivery of orders. In fact, Amazon has even started shipping orders for external customers. It started in 2014 when the company delivered 20 million packages. According to data from Pitney Bowes, this surge is paying off. For calendar year 2020, Amazon delivered 4.2 billion package shipments, up from 1.9 billion in 2019. By volume, that means Amazon sends 21% of package shipments to the United States. While still behind UPS and USPS, with 38% and 24% of package shipments, respectively, it topped FedEx (16% of package shipments) for the first time. I think it’s safe to say that Amazon will continue to look to capitalize on its delivery network and will come after UPS and the postal service.
Earlier this week, FedEx registered an 11% drop earnings for the quarter ended August 31. The main reason for the decline is the tightening of the labor market. According to FedEx, the tight labor market added $ 450 million to costs, including increased overtime, higher wages to attract workers, and additional expenses for transportation. On FedEx, approximately 600,000 packages per day are rerouted due to understaffing. This adds expense for new truck routes and additional third-party haulage companies. FedEx is raising wages to try to attract more workers and paying bonuses for weekend shifts. FedEx is now forecasting earnings per share before certain accounting adjustments of between $ 18.25 and $ 19.50 for the fiscal year that began in June, down from an earlier forecast of $ 18.90 to $ 19.90 issued in July.
Circular supply chains are becoming increasingly common as consumers and businesses seek to reduce their carbon footprint and scale up sustainability initiatives. Ford and the startup Redwood Materials announced this week their partnership to form a “closed loop” or circular supply chain for electric vehicle batteries, from raw materials to recycling. The aim is to reduce the cost of electric vehicles by reducing dependence on imported materials, while reducing the environmental impact of mining and refining battery materials. The companies will work with Korean battery maker SK Innovation to manufacture electric vehicle battery cells in the United States that will power the circular supply model. Redwood aims to start recycling some materials from Ford this year, with the goal of delivering the first anode material in 2023-2024.
The global shortage of computer chips has hit the automotive industry hard and is also wreaking havoc on the smartphone market. According to the Chinese Academy of Information and Communications (CAICT), smartphone shipments to China fell 9.9% year-on-year to 23.1 million handsets in August. This drop follows a sharp drop in July and a steady drop in the first half of the year. The shortage of chips is causing production delays, which is slowing the market. But consumers are also delaying upgrades, compounding the decline.
International restaurant brands, which owns Burger King, Popeyes and Tim Hortons, announced this week that it will cut its emissions in half by 2030, and cut them entirely to become net-zero by mid-century. Efforts to achieve this will include replacing gasoline-powered vehicles with electric vehicles and greening future restaurant prototypes. On top of that, the company will begin working with suppliers of protein, including plant-based meat substitutes, on ways to reduce emissions from their operations. Convincing suppliers to engage might be a challenge, but as the industry as a whole moves in this direction, compliance becomes easier.
Restaurant Brands International isn’t the only fast food supplier reviewing sustainability initiatives this week. Mcdonalds announced that it will offer more sustainable Happy Meal toys around the world by the end of 2025. What exactly does this mean? McDonald’s is committed to delivering Happy Meal toys made with much less plastic by the end of 2025. The company hopes to reduce the amount of fossil fuel-based virgin plastic used in toys by 90% by 2018. The company said it had already reduced the use of fossil-fuel-based virgin plastic by 30% in its toys around the world after starting the process in markets like France, the UK and Ireland. Some toys, such as board game pieces, will be made with plant-based or recycled materials. Superheroes and movie characters will be 3D cutouts rather than plastic figures.
Last month, DoorDash expanded its service menu with the addition of DoubleDash, which allows customers to add their favorite items from nearby stores to their original order with no additional delivery charges or minimum orders. Albertsons announced that it will be the first grocer participating in the new offering, allowing online shoppers to combine their Albertson purchase with a separate order from a participating restaurant or other merchant in one delivery. During the announcement, Chris Rupp, executive vice president and chief customer and digital officer for Albertsons, cited an example of a customer ordering a delivery meal to eat that evening, as well as eggs for breakfast the next morning and an item for their children’s school lunch, both of which could be Albertsons sales.
With port congestion continuing to cause supply chain and logistical problems, the West Coast ports together have a plan of action. The California Ports of Los Angeles and Long Beach extend the hours that trucks can pick up and return containers as they try to improve the movement of goods and delays in ports. The Port of Long Beach will take the first step towards a 24/7 supply chain by maximizing nighttime operations. The Port of Los Angeles will extend door opening hours on weekends through a program called “accelerate Cargo LA”, which will initially operate on a pilot basis to ensure that gate availability meets freight demands. and provides greater transparency to improve efficiency. In addition, both ports have called on marine terminal operators to encourage the use of all available boarding times, especially night gates, to reduce congestion and maximize cargo throughput capacity.
It’s all for this week. Enjoy the weekend and the song of the week, To help! by the Beatles.