Earlier this year, Amazon began testing a grocery delivery service for people who don’t subscribe to its Prime loyalty program. Now the company is rolling out the service to the rest of the US as it prepares to open more supermarkets next year. The expansion is part of a grocery reboot. Shoppers will be eligible for the offering anywhere the company operates its Amazon Fresh service. Non-Prime members will be charged $4.95 to $13.95 for delivery, while members now pay $6.95 to $9.95, with free deliveries over $100. In addition to Whole Foods, the company operates convenience stores, pocket markets and Amazon Fresh supermarkets that the company began opening during the pandemic. The company plans to resume opening new Fresh stores in 2024, after a pause of more than a year.
The U.S. trade deficit climbed almost 5 percent in September to $61.5 billion, but it remained near a three-year low and was on track to post the smallest increase since 2020. Smaller deficits add to gross domestic product, the official scorecard for the U.S. economy. GDP grew at a rapid 4.9 percent pace in the third quarter. Imports rose 2.7 percent to $322.7 billion in September, which is the highest level since February and partly reflects U.S. companies stocking up ahead of the holiday shopping season. Imports of cell phones and other consumer goods increased sharply. Exports moved up a smaller 2.2 percent last month to $261.1 billion, just a hair below an all-time high. Weak economic growth in much of the world has curbed demand for many American-made goods, but U.S. shipments of autos, passenger planes and Covid-related medicines have helped to keep exports high.
Mariah Carey has famously sung “All I want for Christmas is you.” Well, all retail stores want for Christmas is the right amount of stuff. Retailers’ holiday inventory planning has been fraught with unpleasant supply-chain surprises for two straight years. This year, though, retailers have a fantastic gift coming: things are back to normal. Inventory discipline is showing up in cargo numbers. From January through August, there was about 20 percent less import cargo volume at major container ports than the same period last year, according to the National Retail Federation and Hackett Associates. For the full year, NRF and Hackett are expecting import cargo volume to have declined 13 percent versus last year. Retailers that had big inventory glut problems have worked through the worst of them, and this year’s holiday season is looking better.
New research from Moody’s Investors Service finds that the use of carbon offsets in corporate carbon transition strategies can pose financial and reputational risks if they are not applied as part of a credible, science-based approach. A carbon offset is a reduction, avoidance or removal of CO2 or other greenhouse gas emissions made with the intention of compensating for emissions elsewhere. These projects include initiatives like landfill gas capture, forest restoration, or mass tree planting. While many companies depend solely on offsets to reduce their emissions, to have a real effect on climate change, companies must also apply solutions across their supply chain to reduce their production of carbon emissions, the report noted. Not only that, but the report found that improperly using carbon offsets opens your supply chain up to a range of credit risks such as reputational, regulatory, and litigation risks or the risk of technological disruption. Inadequate use of offsets can include:
Logistics real estate remains tight in most markets around the U.S., and companies could see “significant rental rate increases” when they renew leases in coming months, according to a report from Prologis. The national vacancy rate remains “very low,” stuck at 4.8% in comparison to a historical expansionary average of 6.1%, the company said. That condition continued even as the pace of new building deliveries quickened over 2023. Because of the lack of available space, significant rental rate increases upon lease expiration will remain the norm, even as market rent growth normalizes from its blistering pace of 2021/2022. For example, U.S. rent growth totaled 85% from 2019 to the third quarter of 2023.
That’s all for this week. Enjoy the weekend and the song of the week, Dolly Parton’s Olive Branch.
The post This Week in Logistics News (November 4 – 10) appeared first on Logistics Viewpoints.