Today’s Logistics Report: CN Ramps Back Up; Retail’s Holiday Delivery Race; Plastics Prove Resistant

December 26, 2019
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Logistics Report: As holidays draw near, race for quick home delivery causes competitive retailers to improve their delivery practices. More innovation required to reduce plastic use and create more sustainable practices in the supply chain.

The propane and grain are moving again in Canada. Unionized conductors and yard-crew workers are back at work after Canadian National Railway Co. and the Teamsters union struck a tentative agreement, the WSJ’s Paul Vieira reports, ending a weeklong strike that threatened to upend the economy. The strike stalled crop, mining, oil and gas and manufacturing shipments within Canada and to foreign buyers, and shippers warned the impact would spread if the walkout dragged on. Potash and fertilizer giant Nutrien Ltd. had said it planned to cut production at its largest potash mine due to the railroad strike. Major companies warned that the Canada’s rail sector is essentially a duopoly with CN and Canadian Pacific Railway Co. , leaving “shippers with very few, if any, alternatives during a service disruption.” That structure remains in place, of course, as CN builds its service back up to normal.

The holiday competition between retailers is shaping up as a race over home delivery. Sellers looking to match Inc. ’s e-commerce juggernaut are ramping up their own distribution services that promise to get packages to homes in just a day. The WSJ’s Sebastian Herrera reports that while many traditional retailers are struggling to keep pace Walmart Inc. and Target Corp. have held their ground by increasing their delivery capabilities or getting shoppers to pick up online orders at their stores. The idea is to get consumers to spend more, whether by drawing people through store-pickup offers or by getting Amazon Prime members to binge on online purchases. Amazon has nearly tripled the share of its packages available overnight. Walmart’s and Target’s one-day services cover a narrower group of products, but the retailers have been taking advantage of their store networks by using the sites to fulfill orders.

Plastics are proving resistant to sustainability efforts in supply chains. Big brands are trying to reduce their use of single-use plastic but are struggling to reinvent their packaging. The WSJ’s Saabira Chaudhuri writes that efforts so far are niche and it isn’t clear whether they will scale up. Experts say more innovation is needed to make alternatives more useful. Unilever PLC has set a goal of reducing its plastic packaging by 100,000 metric tons by 2025 through refillable packaging, smaller containers and swapping materials, but the strategies have been challenging to roll out on a larger scale. Niche efforts to promote reusable packaging have bumped up against logistics complications around cleaning, returning and refilling. Just 3% of packaging from 139 consumer goods companies, retailers and packaging producers in survey is designed to be reusable. Examples are mostly limited to beverages, like water jugs for offices.

Content reprinted from THE WALL STREET JOURNAL, By Paul Page, Nov. 27, 2019, 9:12 am ET Read more…

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