Afternoon Coffee: What FedEx, Amazon Split Means for Logistics Industry; Ford Opens Research Center in Israel


The dust continues to settle on FedEx’s severing of its domestic air-package delivery contract with Amazon, leaving analysts asking what the implications are for the future of logistics.

“In research notes emailed to Supply Chain Dive Monday, Moody's analysts said the decision ‘makes sense given expectations of strong e-commerce growth,’ according to a recent SCD piece. “Morgan Stanley analysts said the carrier is putting its margins at risk while claiming to do the opposite,” according to SCD — with one of those Morgan Stanley analysts, Ravi Shanker (no, not the famous sitarist) noting this as a “watershed moment,” according to Business Insider.

FedEx justified the move as “an opportunity to take advantage of ‘significant demand and opportunity for growth in e-commerce,’ stating just 1.3% of FedEx's total revenue comes from Amazon business,” according to SCD.

FedEx’s reported revenue stood at $17.3 billion in 2018.

Meanwhile…UPS survey shows millennials more likely to buy from manufacturer

The UPS Industrial Buying Dynamics survey shows millennial procurement professionals were more likely than their older counterparts to buy via the manufacturer. "This buying preference comes mostly at the expense of distributors, who continue to lose purchase share to manufacturers and online marketplaces," said Brooke Yamini, the vice president of global insights at UPS, in the report.

U.S.-China trade tension may see changes in robotics supply chain

Experts and analysts are of the opinion that the current trade tariff war between the U.S. and China may see changes happening in the supply chain for robotics manufacturers. Robotics components like those used in vision systems face the highest tariffs.

Ford opens up research center in Israel

Wanting to take advantage of that country's vibrant tech sector, automaker Ford Motor Co has set up a research center in Tel Aviv, Israel. The auto major joins several others who have intensified operations in Israel.

The new center will support Ford’s automotive and mobility businesses by identifying technologies and start-up companies in the fields of connectivity, sensors, automated-systems research, in-vehicle monitoring and cyber security, the company said.

Werner Enterprises sets up new facility with an eye on Mexico operations

American freight carrier and logistics company Werner Enterprises has opened a 17,000-square-foot cross dock operations facility as part of its commitment to invest in U.S.-Mexico trade. The freight major inaugurated the $8 million refrigerated facility in Laredo, Texas, featuring 13 dry docks and eight refrigerated docks, the company said in a statement.

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