Logistics Report: Delivery’s Smaller Scale; Trucking Gets Predictive; Boeing’s Grounding Pressure

Date: Thursday, March 14, 2019
Source: The Wall Street Journal

Food-delivery companies are testing some of the economic fundamentals of consumer distribution. Companies including Instacart Inc., Grubhub Inc. and Shipt Inc. are pushing their app-driven models into smaller cities and suburbs, the WSJ’s Heather Haddon and Julie Jargon write in a series on The Delivery Wars in consumer food sales. That means moving beyond the dense population centers that parcel carriers and logistics experts point to as ideal delivery markets for their economies of scale. The companies’ challenges include finding drivers and higher expenses in ferrying meals and groceries over longer distances. But the rush to gain market share is pushing the delivery startups beyond big cities as they seek to cover more territory. They also are finding that there’s little competition beyond pizza delivery in many towns, and operating in smaller markets can be cheaper than finding an audience in New York.

Technology is moving truck maintenance beyond the repair shop. Logistics operator NFI Industries Inc. says it’s keeping more trucks on the road and cutting costs by powering up the use of artificial intelligence in its operations. The WSJ’s John Murawski reports the New Jersey-based company is among operators turning to AI to help predict when things may go wrong. The newest trucks are laced with increasingly powerful technology, including sensors and devices that can transmit detailed information on a broad range of factors that affect truck components. A third party analyzes NFI’s data to determine when brakes need adjusting, tires replacing or whether a rig should be sold. NFI says its move outside the usual maintenance playbook has saved the company between $1.5 million and $2 million in annual maintenance and repair costs, savings likely to grow across the trucking industry as more companies use the information their own trucks collect.

Transportation

Boeing Co. and U.S. aviation regulators are under growing pressure as authorities around the world ground one of the manufacturer’s most modern jets. European authorities broke ranks with the U.S. and grounded Boeing’s 737 MAX jet, the WSJ’s Robert Wall and Matina Stevis-Gridneff, joining other regulators and airlines that have parked the jet after two deadly crashes of the aircraft in the past five months. Boeing is seeking to stem the fallout with word that it will make an extensive change to the software that investigators said was connected to a fatal Lion Air crash last October. The 737 MAX fleet numbers about 370 aircraft globally, small enough that passenger airlines have the flexibility to swap out planes. But many will see their operations disrupted, and the flurry of groundings raises the stakes for Boeing, which typically can wait out often-lengthy investigations into such fatal crashes.

E-Commerce

Africa’s largest e-commerce platform expects to use some of the proceeds from an initial public offering in New York to bulk up its logistics operations. Jumia filed the paperwork for its public offering on the New York Stock Exchange, the WSJ’s Alexandra Wexler reports, putting the Nigeria-based business in the market for bigger investment as it tries to advance its goal of becoming the Alibaba Group Holding Ltd. of Africa. Jumia has grown rapidly since its launch in 2012, and has operations in 14 African countries that handle a wide range of consumer goods on an online marketplace with 81,000 active merchants. The company has built its own payments platform and hopes to create a bigger distribution network by using the IPO backing to add more “logistics partners.” Investors will be banking on the idea that extending Jumia’s reach will also help cut its losses.

 

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