Topics: Parcel Spend Management, Tariffs, Supply Chain, Last Mile Delivery
At Cass Information Systems, we’re happy to report that Supply Chain Dive is keeping close tabs on the seemingly ever-fluctuating tariff situation so the rest of us can concentrate on keeping goods moving. And it’s good to turn our focus to good news. That includes Dollar Tree, Burlington Stores, and Mathis Home taking greater control of their supply chains; SkyMind improving the pharmaceutical supply chain with AI; and Zipline delivering medicine – and ice cream – via drone.
Tariff Tracker Keeps Tabs on Trade Front
It’s difficult to keep up with the on-again, off-again tariffs. To help shippers keep track, Supply Chain Dive has shared a searchable table on tariff-related actions taken by the United States and its trading partners. The table is updated “as new information arises.”
Supply Chain Dive saw the need for an updated tariff guide as “the administration has frequently shifted the goalposts for some tariff threats, spurring confusion among businesses and foreign governments alike as to the policy.”
CEO Says Dollar Tree Ready for Various Tariff Scenarios
Dollar Tree CEO Michael Creedon told analysts on an earnings call that the low-cost retailer has plans in place to combat various tariff scenarios.
“We intend to remain flexible and nimble, focusing our efforts on sourcing products via channels that deliver the lowest landed cost to us in order to maintain value continuity for our customers,” Creedon said.
Actions Dollar Tree is taking include negotiating supplier cost concessions, changing product specifications, dropping noneconomical items, and shifting the country of origin for some goods, according to Procurement Weekly.
Amazon Rolls out LTL Service
Amazon has rolled out less-than-truckload (LTL) service to its U.S. fulfillment facilities with access to more than 60,000 trailers and thousands of lanes.
“We have been listening closely to our customers and understand their desire to have more ways to move their freight,” Ari Silkey, Amazon Freight’s general manager, said in the announcement. “With LTL, they are now getting access to Amazon’s trusted infrastructure and cutting-edge technology to move more of their loads into Amazon’s fulfillment centers.”
Shippers can use Amazon’s self-service portal to get LTL quotes, track shipments, and manage invoices.
Burlington Purchases DCs in Georgia, California
Burlington Stores is purchasing two of its leased distribution centers, one in Riverside, California, and the other in Savannah, Georgia.
Supply Chain Dive reported that the move from renting to owning is part of Burlington’s long-term supply chain investment strategy to better support its off-price operating model.
Once the deals are finalized, Burlington will own four of its 12 distribution and warehousing facilities. Its capital expenditures are expected to grow from $844 million in fiscal year 2024 to $950 million in 2025.
“Ownership gives us greater control over the design of these buildings,” Burlington EVP and CFO Kristin Wolfe said on an earnings call. “It also allows us to leverage this capital investment as we grow over time and to avoid significant rent increases at each lease renewal.”
AI-Powered Skymind to Help Pharma Supply Chains Reduce Loss
SkyCell and Microsoft have partnered to launch SkyMind, an artificial intelligence (AI)-powered solution designed to improve pharmaceutical supply chains.
According to SkyCell, more than $35 billion worth of pharmaceutical products are lost annually due to temperature excursions, delays, and a lack of actionable insights.
“By harnessing the transformative power of AI through Microsoft Azure OpenAI, SkyCell is advancing pharmaceutical logistics to create safer, more efficient supply chains. This approach will ensure that vital treatments reach patients swiftly and securely, ultimately driving impactful progress in the industry,” Microsoft EMEA’s Elena González-Blanco García said.
Furniture Retailer Moves Away from Manual Forecasting
Furniture retailer Mathis Home is utilizing Blue Yonder’s supply chain platform to improve its inventory management and forecasting.
“Mathis Home can now utilize intelligent algorithms to automatically generate inventory plans based on sales history, on-hand inventory, safety stock requirements, and customer orders,” a Blue Yonder spokesperson told Supply Chain Dive.
The algorithms also will be used for daily planning adjustments to help reduce stockouts and overstocks.
Zipline Partners with Walmart for Drone Deliveries in Texas
Zipline, which delivers everything from medications to ice cream via drones, has expanded its service to the Dallas area through a partnership with Walmart.
Walmart customers in Mesquite, Texas, can receive orders within 30 minutes. The drones can carry up to 8 pounds within a 10-mile radius and place packages on a space as small as a table or doorstep.
Walmart told CNBC that it has already completed more than 120,000 residential drone deliveries in other cities.
Ground Delivery Costs Forecast to Climb
Ground delivery costs are forecast to increase 2.6% year over year in the second quarter as parcel shippers deal with rate hikes and added fees from UPS and FedEx.
Per-package ground delivery rates are expected to hit 29.5% above the AFS Freight Index’s baseline. That’s still lower than the record-high 31.3% average reached in Q1, when more rate hikes and higher fuel surcharges took effect, according to Supply Chain Dive.
“Q1 ground delivery prices exceeded TD Cowen and AFS Logistics’ previous expectations, which had factored in a low-demand and highly competitive parcel shipping environment,” Supply Chain Dive said. “A bevy of surcharge increases from major carriers outside annual rate increase cycles are driving much of that pricing pressure.”
Note that Cass can provide critical visibility and support for managing your parcel costs.
Cass Helps Relieve the Pressure
Cass offers many solutions to help shippers manage costs and optimize spend:
- Freight audit & payment
- Parcel spend management
- Premium ocean audit & AP automation
- Working capital improvement
- Cass + SONAR SCI, for real-time insights into market rates, capacity conditions, and specific opportunities based on your data
