Supply Chain Now Radio Episode 147
Supply Chain Now Radio, Episode 147
“Economic Pressure, Terrible Tariffs, & Retail Apocalypse”
Hosted by Vector Global Logistics
Learn More: www.VectorGL.com
With almost twenty years of experience in the logistics market, eleven of those years with UPS, Cathy Morrow Roberson founded market research firm Logistics Trends & Insights LLC (LTI) in 2015. LTI offers a host of services including primary and secondary market research, market sizing, m&a due diligence, strategic guidance, and PR & marketing support. In addition, Cathy is a contributor to such publications as Forbes, The Loadstar and Air Cargo World. Roberson holds a BA from Winthrop University, a Masters in Library Science from the University of South Carolina and an MBA from Mercer University. Learn more about Logistics Trends & Insights LLC here: https://logisticstrendsandinsights.com/
Paul D’Arrigo is co-founder of Saltbox, a modern co-working space that’s purpose-built for entrepreneurs who need a functional warehouse. The first location of Saltbox will be opening late-2019 in the Upper West Side area of Atlanta. Prior to Saltbox Paul was co-founder of Ally Commerce, an eCommerce-as-a-service provider who helps brand manufacturers go direct to consumer. Paul’s experience is all things eCommerce began with the founding of his first eCommerce company, Unique Squared, in 2007. That original foray into eCommerce quickly grew and was ranked #110 on the Inc 500 in 2011. Prior to a eCommerce Paul was an Industrial Engineer with UPS and holds a BS in Industrial Engineering from Georgia Tech. Learn more about Saltbox here: www.joinsaltbox.com
Greg White serves as Principal & Host at Supply Chain Now Radio. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now Radio and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
Join Scott Luton and Greg White as they interview Cathy Morrow-Roberson of Logistic Trends & Insights and Paul D’Arrigo of Saltbox as they discuss the impending tariffs, economic pressure, and the retail apocalypse. Hosted by Vector Global Logistics.
[00:00:05] It’s time for a supply chain. Now radio broadcasting live from the Supply chain capital of the country, Atlanta, Georgia, Supply chain Now radio spotlights the best in all things supply chain the people, the companies, the technologies, the best practices and the critical issues of the day. Now here are your hosts.
[00:00:37] Good morning, Scott Luton here with you live on Supply Chain Now Radio, welcome to the show. We are coming to you today once again from our studios at Vector Global Logistics, a company that is providing world class Logistics services, all while deeply investing into the communities that they serve, based right here in Atlanta. But with an international reach. This company is owned. The move you can learn more at vector g l dot com. On today’s show, we’re going to be talking supply chain buzz with a roundtable of supply chain gurus. So stay tuned for a frank, enlightening and hopefully informative conversation on a quick programming note. Like all of our series on Supply Chain Now Radio, you can find our replays on a variety of channels from Apple podcasts, SoundCloud, Spotify and of course wherever else you find your podcast. As always, we’d love to have you subscribe pseudomonas. Anything. Supply Chain Now Radio is also brought to you by a variety of sponsors, including the effect of syndicate talent stream, VeriSign, pro purchaser dot com and several other leading organizations. Be sure to check out the show notes to learn more about our valuable and appreciated sponsors.
[00:01:45] Okay, so let’s welcome in our guests today and we’re gonna stop start with a start and start maybe with my esteemed co-host, probably your best BET co-host and serial supply chain tech entrepreneur Greg White.
[00:01:57] Hey, don’t, Greg, I’m doing great. How are you, Scott? We are doing fantastic. Beautiful day before morning in Atlanta.
[00:02:04] It is today. So you know that you’re in Atlanta when what makes the news is low humidity.
[00:02:10] Yes. A yes. Right.
[00:02:13] And when they call it a cool front, when it’s only going to be ninety three. Well it’s on the heels of what, 100 great temperature yesterday. Yeah. Which we also calls August. Yeah. In Atlanta. So but it is great to be in the mid August, the dog days of August and our braves are are putting their foot on the neck of the Mets claiming first place and things are looking good. We’ll see.
[00:02:38] And speaking of dog days, 16 days till Eugene. Has there a game? That’s right. Go, ducks.
[00:02:45] Interesting. We’ll see. And big, big season teed up, too. All right. So let’s welcome in our featured guest today. Uh, Greg and I are looking forward to talking with Kathy Morrow Robertson, founder and head analyst of Logistics Trends and Insights LLC. Cathy, how are you doing? Doing great. We are so glad to have you back. It’s been too long. It’s been about two or three months since we’re at it. You’ll be gross Collins talking Brexit, amongst other things. That’s right. On a Saturday morning, no less. Exactly. I had a great time. So great. Welcome back. And we’re going to learn more about you in just a second. And Paul Dorrigo, co-founder of Salt Box dot com. Paul, how you doing? Great. Great. Great to have you enjoyed the the warm up conversation and some of our homework we’re doing about your venture and look forward to learning a lot more about it here in just a second. So, Kathy and Paul, thanks for joining us. So I know Greg has got a ton of questions about both of y’all and your backgrounds, Greg. And let’s take it up.
[00:03:46] Yeah. So. Let’s let’s welcome our. Silent guest, I guess we’ll have to say, a player from women.
[00:03:54] I apologize. I did not introduce her. Claire, is it. Hashtag.
[00:03:58] Where’s Claire? So if you saw, uh, if you’ve seen any of our promo pics here, you’ve seen Claire, um, not creepy that I’m holding her, but.
[00:04:08] But no, sir. That’s great.
[00:04:10] Um, I love these things and I can’t wait to see where Claire goes next. She told me she really digs the King Plow word center, so she’s happy to be here.
[00:04:20] Now she is an ambassador of a fast growing, awesome organization called Women and Truck. Right. And maybe be route before we dive into Kathy and Paul’s background. Uh, do you want to share a couple of tidbits? I think you’re gonna be at their upcoming conference. I’m not.
[00:04:36] I’m not. But I think what they’re promoting women and trucking is a necessity. Um, but there’s not a lot of women out there.
[00:04:44] And just promoting that out with their mascot. Claire, I think it’s a big thing.
[00:04:51] I ended up purchasing Claire off of a large e-commerce site, so it doesn’t need to be promoted.
[00:05:02] Um, a few weeks ago and, um, I believe strongly in not only women and trucking, but also women and Logistics as a whole. Uh, we need to have a diverse group in this industry. And and I think Claire brings a little bit of that. Yeah, I dig that. And plus, Greg needed a friend.
[00:05:23] Yeah. Thank you. Yeah. Respond to my need for a friend. So thanks to Cathy Adler. Absolutely.
[00:05:29] You can check out women in trucking dot org for more information, including their great conference they’ve got coming up just around the corner. So in for so our audience can. That may not have seen the social media visuals. Claire is a mom, is a stuffed ambassador.
[00:05:45] Yes. Yes. Yes. Uh, we’re not keeping her side right. She actually is is silent. Okay. Clarify that.
[00:05:54] Yeah. Thank you, Paul. You’re gonna fit right in. Love that. Okay.
[00:05:58] So. So, uh, Kathy, we’ve learned a little bit about Claire’s history. So tell us a little bit about, you know, a little bit about where you are, where you went to school. You know, kind of how you came to this industry. I know most of us didn’t grow up saying, wow, I want to be in Supply chain someday.
[00:06:15] That is so true. And I was one of those. I didn’t even know what Supply chain was. Um. My background is library. I was a librarian for a number of years. Okay.
[00:06:27] Yeah, it’s complete with that master’s in library science from the University of South Carolina. Go Gamecocks, but also go clamp sentence. You know what I do, mate? Yeah.
[00:06:38] Yeah. But, um, after a few years as a librarian, I end up working with an e-commerce firm back in the heyday. Back in the beginning, in the late 90s, early 2000s, we tanked. You know, like a number of folks. And, uh, luckily for me, one of our customers was U.P.S., so they were like, come join. We got this cool, awesome, great forming. And, um. Which was a new product development group that didn’t focus on small package. So I joined and it ended up becoming a supply chain solutions. So about eleven years or so with them, I went with another consulting firm, uh, spent some time with them. And then after that, I decided I can do this on my own. And I did. So I started my company.
[00:07:30] And you’ve done well? Yeah. Well.
[00:07:33] Yeah, we’re big. We’re big fans, so it’s awesome.
[00:07:38] So tell us a little bit about okay. So Logistics trends and insights has been around for four years. This month we’re celebrating our fourth anniversary. Yay! Uh, it’s focus on market research here. And our clients run from start ups in the industry.
[00:07:57] Large shippers as well as the Logistics providers themselves. We do a number of things, such as competitive analysis, emanate due diligence. Market analysis, you name it. We also do a smattering of PR and marketing for four companies as well. Wow.
[00:08:17] Cool. So. So your history led you to this moment?
[00:08:23] Yes, it did. That’s right. Yes. This was this very moment. Yes. That’s your exact litany. This shows your desk. Check it off my back. No, sir. That’s right. But let’s just say that all your friends.
[00:08:35] Two appearances. Yeah. She should double up right now.
[00:08:39] And she’s vying for the title. That elbow pretty high. Gallagher still has a who’s on that show with us. Exactly. She holds a title, I think at 17 appearances. So.
[00:08:49] Yeah, I mean for the third. Yeah. Yeah. England.
[00:08:53] We’re, uh. We’re evaluating you for the third. Okay. Okay. So far you’re winning. Yeah. So Paul Dorrigo, tell us a little bit about, uh, a little bit about your history. Kind of where you came from and, uh, and what you’re doing today.
[00:09:07] Well, uh, since you mentioned Georgia, that means I have to mention that I went to Georgia Tech and industrial engineer and first first job out of there was with U.P.S. Supply chain Solutions, uh, my electrical engineer right here in Atlanta. And after working there for several years, started a e-commerce company with some friends.
[00:09:29] And, uh, we sold pro audio and recording equipment. Uh, I was at a time when that industry was primarily brick and mortar and, uh, print catalog. So we did very well and it grew, but we quickly learned it was tough to compete as a reseller simply. There are much bigger entities out there who can sell things and ship them cheaper and buy in bigger volume, buying bigger volume. So that’s where we took. We’re like, we’re very good at selling things on the Internet. What can we do with these skills that then evolved into a company that I started called Ally Commerce, which is e-commerce as a service where people who have companies who have a strong brand and a great product and then want to go direct to consumer but don’t want to deal with all the added individual shipments, customer service, things like that. That’s what Ally Commerce would bring along. And all through that, I went through a lot of challenges building my e-commerce company and eventually trying to find warehouse space for it. That was flexible, wasn’t a part of town that I was open to working to.
[00:10:48] And if, you know, the, you know, industrial cities are maybe not exactly where you want to spend all day.
[00:10:55] And so I went through these challenges and then with my co-founders, my current company, Salt Box, you can check out it and join Salt Box, dot com. What we’re building is a coworking facility. But the difference is that it has an industrial aspect to it where there’s a warehouse space that is subdivided for separate companies to have their own area to work in store. But then they have access to things like commercial freight material handling. They have security for their assets and different things like that. So these companies don’t have to go through the same struggles I did trying to find the proper space. How’s my company which has physical assets? And so that’s where we are right now. And that’s what brought me here. And I have known Kathy for several years.
[00:11:45] So out of so out of the garage, the natural next step is salt boxes that exactly. Once you once you take the shells out of your basement or your garage, the natural next step is. Exactly. That’s great. That’s a very cool, cool concept. You look as we’ve talked about before. If you’ve got a tech startup or, you know, some sort of high growth type startup, all of the typical coworking space has worked really nicely for that. It’s nice to have a space for, you know, for an organization like that that needs a little bit more logistical support. Right. And I think companies can benefit not just from your knowledge in in facilitating e-commerce, but also that the kind of cross pollination that you get in a coworking space, you know, if you’ve got people doing the same thing, you’re out. You’re always going to get a great cross polarization.
[00:12:41] Yeah. I mean, I see the popularity of coworking across. Right. There’s a big one filing for IPO. And in you know, in those spaces, people could technically do that work at home or in a coffee shop, but they choose to be there. And so I think that really talks to how people when they’re working and want to be part of a community and want to be connected to other people who are working hard and trying to get something done. And that’s exactly what we want to cultivate as well. And with understanding that there’s a certain class of entrepreneurs who, because of their work and because it involves some physical assets or some light assembly or something like that.
[00:13:22] Right. Production work, production work. They get a little sweaty. Their hands get dirty right there. They’re doing it the right there.
[00:13:29] There isn’t there isn’t as much of a welcoming place for them. And that’s what we want to try and change. Yeah. Yeah, that’s very cool. I like that.
[00:13:39] So now we’ve gotten kind of the back story on both Paul and Kathy. We’re going to dive into some issues. But for do you notice that my shirt today is my best attempt at trying to appear to be a Georgia Tech engineer?
[00:13:51] And I think this is about as close as I can get. I don’t know. But that they did let me in. Yeah, right. If you could believe that six central NSA teams just don’t quite get it. All right.
[00:14:04] So let’s let’s let’s let’s talk about some of the some of the buzz going on in our industry here. Some of the latest developments. I’m looking forward to the conversation. So, Greg, we want to lead off the. Before we kind of talk specifically about supply chain, we’re gonna kind of go broad here and talk about some of the economic indicators that that a lot of folks been tracking.
[00:14:25] Yeah. Crazy. You know, just yesterday and today, you know, we’re talking about inverted yield curves, which we’ve been talking about for a while. Right. The 30 day versus 10 year yield curve has been inverted for some. Time and yesterday, the two year versus 10 inverted and depending on who you listen to. Look, let me let me qualify this.
[00:14:48] I am not an economist, nor is this investment, right? I know her. Yeah, that’s right. That’s right.
[00:14:54] Past performance is no indication of a future business. Right. So. But but look, there’s just a lot of chatter around this. And there has been for a while. I sit on the board of a few companies. And about this time last year, we were talking about a pending recession. Right. But now the R word has raised its ugly head yet again because of a number of factors, tariffs, which we’re going to talk about a little bit more. And the input, potential implications on on the markets, but also this inverted yield curve. But even today, when yesterday it tanked the market by 3 percent, every virtually every index went down by 3 percent. Um, you know, the the messages are very, very mixed. Right. These yield curves for depending on which statistics you listen to, four out of five times since the 70s have indicated a recession and about half the time over the time that they’ve been measured. Yeah. Have have indicated a recession. So, you know, it may or may not be accurate. And as a wise philosopher, Mark Twain once said, there’s lies, damn lies and there’s statistics. So, so so, you know, you’ve got to really judge for yourself. I think I heard a great analysis on the way in to the studio today or we listen to NPR, WSB. Yeah. So obviously in Atlanta, you listen to WSB for traffic early in the morning, right along with ways to help you get here.
[00:16:30] But anyway, I heard a fellow saying, hey, um, a week ago, the market popped and none of the pundits predicted that. Then yesterday, the market dropped and none of the pundits predicted that. Then who really can predict that? Mm hmm. And, you know, regardless of what the the metrics tell you. It’s still a bit of a crapshoot. So I’m I’m looking at a headline right now. So this says the yield curve inversion is no match for the American consumer. We have such confidence in the America as American consumers today that we might just buy our way out of recession. All right. We haven’t seen some indicators that are typical of a recession, like an increase in unemployment. In fact, job data is really, really strong. And, um, just earlier this week or late last week, we were talking about seven point seven million jobs that are unfilled right now. Right. We talk what we discussed with Claire earlier, that the shortage of drivers in the trucking industry, Claire has some really strong feelings about that. And I’ll share those on her behalf later. But, um, so, you know, I I just like to kind of toss it out there and say, hey, look, we’re as much experts as anyone else.
[00:17:47] We can predict it probably as well as anyone else. What do you think? Right. Yeah, absolutely. So, Cathy, Paul, I want to weigh in there. Come on. Take a swing at it. Oh, well, okay.
[00:17:58] Because I write about this and I’ve taken a lot of economic classes, but while I’m not an economist. Yes. Good disclaimer. Please don’t send me an ugly note. It’s been about 10 years since the last recession. Right. One of the longest. Periods of time that we’ve gone without a recession. Mm hmm. So. Yeah, there’s a lot of folks just waiting to pounce, right? And, you know, to be the first person to say, huh? Yes, I told you so on that recession. It’s hard to say because the data. Uh, a lot of us like the way you determine unemployment, the data that’s used is historic data. It’s still the same methodology that’s been used 10 years ago, 15 years ago, 30. Is it still relevant? That’s a good point. Okay. There’s a number of folks that are holding down two, three, four jobs. God bless them for that. Um, so. Is our economy really as strong as we think? Mm hmm. Uh, you know, along with this whole inverted yield. The tariffs Maersk and we were talking earlier about, uh, Maersk announced their earnings this morning and they were. They were they were pretty good. Uh, positive revenue growth paths. Uh. Amazing. But, uh uh, double digits. It was it’s crazy. Mm hmm. But they also came out and said because of these tariffs. Unmet demand in 2020 could take out well, lack of demand can take out one point five percent of container demand. Okay. That’s that’s a lot when you’re thinking that over 75 to 80 percent of world trade is conducted by ocean. Mm hmm. Yeah.
[00:19:51] So and we’ve been talking about a freight recession almost the entire year. Right. I mean, and there are and I think even that is arguable because last year was such a great year.
[00:20:03] Thank you. You got some strong opinions about. I’m sitting here cringing. Yes. Yeah. Yeah. Go ahead. Kathy’s a little, too. Emotional. Yeah. Night. She’s an analyst. That’s her job. Okay. Give us your opinion. Okay.
[00:20:21] So last year was an extraordinary year. Yeah. Okay. All right. So, yeah, naturally a year coming off of such a year. That’s 2018.
[00:20:29] Year over year comps are gonna be difficult. Yeah. Okay. So you’re going to have to take a step back and look at the previous year’s as well. All right. I would venture out to say we’re not in a freight recession. Go ahead, e-mail me.
[00:20:45] Oh, right. Call me out on Twitter. Yeah. But I really don’t.
[00:20:50] Don’t where I am, Claire. No, no, no. It’s not clear. It’s about, um.
[00:20:54] No, I think you’re right. Because, you know, even at the same time we were talking we’re hearing about freight recession. We’re we’re talking about, um, you know, this massive driver shortage and other jobs in trucking. All right. We talked just just last week about, um, you know, mechanics and technicians. Right. There’s a big there’s a lot of openings for those roles as well. So, yeah, it’s very confusing.
[00:21:19] Yes, a lot of a lot of mixed signals that are taking place. Pawlenty, before we kind of switch gears and move over to talking a lot more about tariffs. Weigh in. Any any thoughts on economic signs that you’re seeing?
[00:21:32] You know, from. I come from a perspective and what I’ve been working on so much for the last year is raising venture money. And it’s it’s still there’s a lot out there still. And there’s trillions literally being invested. And so use that as an indicator. But I will say that I did kind of. Take a pause when I saw companies like Uber and Lyft IPO and then not this in the public market. Not this same kind of hunger that I was seeing in the venture market.
[00:22:10] And then, you know, that kind of raises my eyebrow of, OK.
[00:22:16] Is this some sort of bubble?
[00:22:18] Is there just over excitement? But then once we hit Main Street or Wall Street or once we get out of that venture world? OK, maybe. Are things slowing down out there and so I don’t know, I never know, I can never predict these things and then I always feel like we hit. And about a couple of months, we’re just gonna be talking about how much holiday spending there is and how much that’s an indicator of if it’s the end of the world or not. And so that, you know, I really again, because I am not an economist, but those are I still know again, those venture world is still a lot of money flying around. But then, yeah, I suppose I’m starting to see some things that raise my eyebrow.
[00:22:58] Well, I think there’s a lot of counter information, right. I mean, if you think about companies like Lyft and and Uber that went public, they had such massive valuations based on pure speculation towards profit before they went public. And then you get into the public market where profit is one of the most prime value creations. Right. For for real shareholders. For for public shareholders.
[00:23:28] They’ve been there now measured against a different metric, and they they companies like that have, um, you know. And some analysts have have speculated that because they had such massive valuations, this is almost like a down round India venture. Right. Um. And at the same time, you know, again, as you said, nobody really knows. And, you know, I think back to when I like an idiot started a company during the Great Recession, um, not too long ago. And we somehow managed to make it through. Right. And I think, um, you know this because this has the potential to become a self-fulfilling prophecy. People hear the R word and then they start battening down the hatches. Mm hmm. Right. But at the same time, and even, uh, Clark Howard. Right. A well-known consumer advocate has said it’s safe, right? Yeah. Relieved debt. And. And I think that’s a smart strategy no matter what the economy is doing. Um, but, you know, none of this ends the world. It hasn’t ever in the past. And we’ve had much, much worse situations than we even had from 2008 to 2013. So, yeah, um, it’s you know, it’s interesting to talk about it’s in the news, which is why I bring it up. It’s you know, it’s I think, you know, since we’re having kind of a roundtable discussion here.
[00:24:48] Yeah. It’s interesting to get people’s take. It’s our wallet, right. Fireworks, purses. Yeah, but check lookouts. We shall overcome. Right. This too, shall pass. Pick it. Cliche, right. But there are all sorts of things that, uh, you can do to make sure you make it through even a difficult time.
[00:25:03] Well, if I could just add in and times of the R word, there’s opportunities. I mean, just like you said, you started a business back at the Great Recession.
[00:25:13] So if you’ve got cash. Right. It’s a great time. It’s a great time to buy. Mm hmm. For sure. Mm hmm.
[00:25:19] So let’s shift gears now. We’ve mentioned tariffs and, uh, Paul so mentioned Wall Street versus Main Street, which we’re really where we want to head next. So we we’ve got a sense of how tariffs will play out on Wall Street.
[00:25:33] And Greg, I know you’ve got some, uh uh, some thoughts on how the tariffs will play out on Main Street. Yeah, I mean, I’m a firm believer that companies don’t pay taxes and companies don’t pay tariffs. Consumers do. Very often that is passed right along to to the consumer in the marketplace. I think there are a lot of companies, including Wal-Mart’s, who who has enunciated that they intend to not pass on tariffs as long as they as long as they can avoid it.
[00:26:07] Um, but, you know, the market is really strong right now.
[00:26:13] We have all this confidence in the American consumer. There is a lot of money in the marketplace, as Paul talked about everywhere, right? I think we can you know, inflation has been held down pretty dramatically.
[00:26:24] And I I think that this, um, the situation, um, is temporary.
[00:26:32] I believe it, again, not an economist’s opinion, but I believe it. And, um, and I think sometimes to go forward, you have to take us a few steps back. It s really, really painful to do it.
[00:26:44] Um. And, um, you know, it s it s not pleasant, but the American consumer in particular.
[00:26:52] That’s all I can really speak to is resilient. And I think. You know, there will be an effect. I can’t tell you that I have felt in effect as a consumer, I don’t know of you all. When you think about it in your day to day life, if you felt in effect.
[00:27:06] Yet or I don’t think I have personally. I mean, what I do think about the terrorist, I mean, I’ve sat in some board meetings and they’re going through the sales pipeline. And when I did hear over the last year many times is that the sales target was a manufacturer and they said we’re not doing anything bad until we see what happens with the tariffs. So.
[00:27:30] So it is a holding up deals being made.
[00:27:33] It is holding up decisions being made, things being executed and with businesses. And so that’s that’s where I do have a concern right now, is that, yeah, we’re just more Wall Street and Main Street, right?
[00:27:46] Mm hmm. Yeah. Yeah, I can see that. I mean, I certainly I certainly see that.
[00:27:50] I mean, any any potential. Largely unknown risk, and I think it’s easy to make the case that the. That the risk of.
[00:28:03] In regard to these tariffs is unknown. We don’t really know what our position is, right. What the administration’s position is on these tariffs. It seems to be, um, pretty nosed yet. Pretty hard nosed, but it’s. But you look like you’re saying, yeah, it has evolved a little bit in the last few days. Yes.
[00:28:19] In fact, of course, we all know about the delays right from September, October on some of the tariffs. We’ve also seen the administration recently can can join to, um, the Hong Kong issue to a trade deal, potential trade deal. So conflating two very large topics together. And now I’m curious how that’s ultimately gonna play off play out on the tariffs. The other thing about these tariffs and I’m sure everyone around this table sits down with manufacturers all the time. Although it doesn’t start and stop there. But gosh, think of, uh, I think my days metal stamping where we had the price. We had a very we care about our price. Right. And based on where there’s still markets we’re going. We wanted our pricing to rise and fall and there’s still markets. We’ll try to with that with the ever moving, uh uh, elements in these tariff deal. Good. Try to come up with a a successful pricing strategy. Yeah. I think a of folks are gearing up to put to to put certain pricing in place for those that had flexibility in pricing that would start in September and now with the delays. They’ve got to replant. You know, it is it can be that uncertainty, I think doesn’t help anyone. And that’s where we’re at. Paula, again, always politics aside. But if man, if we can just get some certainty and some clarity on where the situation is going, even if the tariffs are here to stay, which. Just clarity, right, certainty. That’s what we’re all after. Yeah. All right, Kathleen.
[00:29:51] I totally agree. I’m telling you. Right. I mean, think of the. They added Logistics cost the transportation cost that these tariffs have resulted in. All of a sudden, you know, within a month. Notice. Oh, here comes another tariff potential terror. Mm hmm. So just planning for that. Making sure there’s enough capacity in all finding space and warehousing houses. So it’s just more cost. Yeah.
[00:30:21] Well, there are companies that speculate on these things, too, and try to arbitrage and make money off of it. I mean, let’s let’s face it. Some some of this is is opportunistic, right?
[00:30:32] Definitely. I mean, you’ve been watching billions, have it? And I haven’t yet. I don’t see that show.
[00:30:38] But I need to put. But I mean, I think of it like fuel, car or, you know, crude oil costs. Mm hmm. Right. Crude oil goes up or if gasoline goes up as crude oil goes up, but it doesn’t come down as crude oil comes down. Mm hmm. All right. So there this is I see this as a potential for opportunistic providers to do exactly the same thing. And there may. And when you when you publicize something like this, the the general public fears it and they expect it. And it makes it easier for you to justify. Mm hmm. Yes. So.
[00:31:12] As tariffs always are our friend. Well, we’ll hear a way is our is our resident tariff.
[00:31:18] Uh, tariff. Um. Yes. Yeah. Or maybe not. Maybe that’s good. Um.
[00:31:25] And whenever he’s he was here last week on an on the spot Chain City show and he was talking about the situation because it’s something he’s tracking very closely. Um, but you know, there is not a um it can be a tricky topic because politics are woven so deep. Yeah. But what what’s an arguable. And we made this point last week is that supply chain professionals, it regardless of politics, regardless of your your stance on foreign policy and trade policy, all this stuff, these things complicate what we have to do day in and day out. So that’s why we try to cover it in and offer perspective on what’s happening now and what lies ahead. So thank you for weighing in. Uh, especially on the main street side, because that’s the that’s the, um, you know, just like as you were talking about the headlines, a lot lot of times the headlines can focus so much on on Wall Street and what Wall Street’s saying. I mean, it hasn’t hit us yet.
[00:32:19] Yeah. Right. Has it impacted everyday people yet? I don’t. I don’t think so. And what’s the point in trying to predict when it does? Mm hmm. Yeah, you’re right. I mean, you know, we gave the example earlier. We’re equally as often right as the experts in the marketplace. So.
[00:32:36] So now we live your life, right? Just live your life. YOLO. Right. Yeah, that’s right. Um, in my 10 year old is gonna be very proud that I know what that means. Uh, Brantley, I can see your smile on that likability element right now. All right. So let’s. Well, I’m not cool. Yeah. So let’s talk about let’s let’s kind of pivot to some industry, some supply chain developments, which are much easier to chat through and really some neat things. Yeah. Something more fun. And in the audience said collectively, a man. Yes. All right. So last mile delivery. Kathy, what are some of the latest developments going on there?
[00:33:13] There’s a lot going on in the last mile. I think with the last earnings report from UBS, they announced a couple of really cool things, including drone delivery. Oh, yeah. Oh, I love that expression on eBay.
[00:33:29] Well, I get that a lot.
[00:33:31] I’m a I’m a big drone enthusiast. Yeah. Um, I don’t think it’s for everything, but it’s cool. Mm hmm. Yeah. Totally cool. But I’ve got a set. They’ve created a subsidiary for that. But also they’ve introduced a new cross-border, uh, solution for, um, that’s geared towards small to medium size, um, business and, uh, specifically in the e-commerce to try to attract that attention. But the last mile, it’s one of those. Pain points to put it nicely. Right. It, uh, can represent either as low as 20 percent upwards of 35 to 40 percent of total Logistics cost.
[00:34:15] So you see players such as U.P.S. introducing drones, you see FedEx introducing robots do in the last mile delivery. At autonomous vehicles and so on, trying to drive down those cars and at the same time you’ve got players entering the market, specifically trucking companies such as Schneider. OK, so Schneider had started offering last mile delivery, but. They’re known for big trucking and it’s hard to get a truck. Down into a neighborhood. I’d say so.
[00:34:53] There’s more to not stop them from trying. All right. Exactly.
[00:34:59] But they struggled with it. And there’s a number of trucking firms that struggled with it because last smiles, not quite like driving a big rig down the interstate or back and up until a dark area of a warehouse. So it’s that knowledge and such trying to get that last mile. Right. I mean, consumers are wanting their their orders. They want their packages like two days before they placed the order, which I believe Amazon does have a pat on on. I have. I have asked for that. Yeah, yeah, yeah, yeah. Yeah. Same day as not fast enough. Exactly. See you say. Well in China they’re actually delivering between 15 to 30 minutes now. So you know, same day is so passé. Yeah.
[00:35:39] It’s easier when it’s made there. Yeah, exactly. Good point. Straight from the factory.
[00:35:45] But that’s some of the trends. This is. You know, you’ve got Amazon entering this space. They’re going up against U.P.S. and FedEx, right.
[00:35:54] Do you have any idea when they’re applied for drone licenses as well?
[00:35:57] Exactly. Exactly. So and they’re also doing their own last mile delivery. You know, more one more. So supposedly estimates of upwards of 25 percent of their total delivery is done by them. So. And then you see FedEx totally saying goodbye to Amazon as a customer for both express as well as ground delivery. So there’s a lot going on in the space. Kathy, just to, uh.
[00:36:23] Wild guess here. How long do you think that FedEx development was? Was was baked? Yeah, because that wasn’t something. They came in and met on a Monday afternoon as a board and said, you know what? We’re gonna make this right. That was in play for a while.
[00:36:36] Oh, I’m sure it was. Sure it was. I mean, several years ago, Amazon was a big user of FedEx, FedEx’s hybrid solution that they use with the post office. Well, Amazon took that volume away and gave it entirely to the post office. Also, back in June, you remember, uh. FedEx said goodbye to them. All right. As far as an express customer, well, looking at some of the volumes, month to month volumes from the Memphis airport as well as the Louisville airport, and those are hubs for both, you know, for FedEx and U.P.S., respectively. You see a sudden fall in volumes from FedEx, uh, really beginning in April. And then all of a sudden you see double digit growth occurring at the Louisville hub. And this is U.P.S. cargo. Now, not all of that. I can’t attribute it all to Amazon because it didn’t say that on the report. But I would venture to say a good bit of that was already being handed off to Amazon. So now in answer your question, I know it’s been going on for a while.
[00:37:49] I’m on it in 2014. In subsequent years, Amazon had trouble delivering to their their two day promise. Exactly. They blamed U.P.S., FedEx and the post office. So starting then they’ve started building between 90 and a couple hundred facilities a year at basically every tier of the supply chain all over the world. Some large, really large of one. One can only assume that that is to replace well, really large and last mile type. So small urban. Yeah. They call them delivery stations and um. And so they have a very specifically tiered structure. Um. And you have to assume that that is to replace these carriers. And and I speculate personally all my personal speculation. Again, not an expert. Um, but I speculate that they will build excess capacity like they did with a W S there, their web hosting service. Originally that was just to support their e-commerce operations. They realized they had excess capacity and they started selling it off there. I speculate that they will do the same thing with warehouse capacity and they will become a competitor to FedEx and UPS. And FedEx has to have realized that over the year, years. And and at some point you have to make the call to make the cut right to to cut cut ties.
[00:39:11] I know. I kind of agree and disagree with you. I think they’re gonna be very selective. The Amazon is going to be very selective, particularly with their last mile. They’re not going to want to deliver to every single rival here in the US, so they’re gonna give the unprofitable routes to the post office. The post office. Yeah, actually that’s really what we’re seeing with FedEx and U.P.S. as well. They’re taking in more. They’re smart post and sure post packages, which are hybrid solutions with the post office, though, in the last mile for U.P.S. and FedEx. They’re bringing in more of those in-house. And they’re leaving the post office with the holding the bag.
[00:39:54] Literally. Literally. Yeah. Yeah.
[00:39:56] I see a lot of, uh, the drones have kind of pop back up with, uh, I feel like some reality has set in on the whole autonomous vehicle.
[00:40:06] I think we’re supposed to have them in a couple of years or so.
[00:40:09] And I know in the major players, if you step back from a you know, the broad sense of the autonomous vehicle, the timeline to this to to deliver this capability has really been pushed back. And I think. Seeing that as a solution for last mile delivery has now kind of changed and everyone’s like, OK, we’ve got a we that’s not coming. Very soon, and so we have to start looking at. Doing it through the Amazon, doing their franchise model, right? All deliveries. That’s a really good drones or different things like that.
[00:40:46] Yeah. Amazon isn’t is encouraging and facilitating people to start their own home delivery service. Their prime branded trucks. You’ve probably seen those. I love the color personally of the truck. Sharp. Yeah, they’re sharp in the gray prime vans rolling around and ever. And while most people in the industry know that they have a huge order from Mercedes Benz for the sprint or vans. Right. And you’re right, they’re not facilitating other businesses. So they’re really hedging their bets on this last mile. Is it drone? Is it independent? I mean, I had somebody deliver a one day delivery and a 96 Lexus LS 400. Not in great shape, but it got to my house. It didn’t it, and it didn’t. It didn’t hit the curb when it turned around and it looked like a else. But also this franchise model. Yeah, I think they’re there. They and others are are experimenting with how to do this last mile. Nobody knows. And there’s not one answer. That’s the other thing.
[00:41:49] And that’s right. Because in today’s environment, it’s gonna take creativity. Okay. Cause, you know, like I said, Malone or packages two days ago or you know, or what have you. So it’s faster, faster, faster. But, you know, U.P.S. and FedEx and the post offices, presumably they want to make profits. Mm hmm. Mm hmm. So, you know, they’ve got to make money in order to stay alive. All right.
[00:42:14] So I’m curious. Uh, yeah, I did that. Does the U.S. Postal Service somewhat.
[00:42:19] When’s the last time it has been in the black spell forever? That’s why I said not in my lifetime. Yeah, I’m with you. I’m with you. Um, well, and I think people are taking advantage of that. Yeah.
[00:42:31] I, uh, I think, you know, the president called called Amazon and others out about that. And. Right. On the other hand, why do we continue to facilitate that? Why? You know why? Why do we continue to allow that?
[00:42:44] Well, yeah. I mean, the post office is kind of stuck between a rock and a hard place. So. Oh, it’s kind of hard to say no to an Amazon or U.P.S. or FedEx. I don’t blame the post office for that.
[00:42:58] Well, the roots aren’t more the roots are not more unprofitable because they’re carrying more packages. Not they’re going into that mailbox anyway.
[00:43:06] Mm hmm. Exactly. So a lot of is that that requirement they have to pay into this pension plan? Absolutely.
[00:43:14] We got different we have different ecosystems. You know, we’ve got one set of rules been in place with the USPS around forever. That was it. It arguably wasn’t built and it wasn’t designed at a time when e-commerce was even around suddenly. So there are less. Absolutely.
[00:43:31] So we’re kind of expecting performance from something that wasn’t, you know, like expecting the Model T to do 90 and have airbags and drive 60 miles an hour in gas efficiency or something. But it’s it’ll be interesting to see how it goes. And, you know, the FedEx adjustments, the FedEx strategic directions that have come out in recent months were interesting. And we’ll see what what follows suit from from other Amazon partners.
[00:43:58] So before we move on. Yeah. You you work. You’ve been doing e-commerce yourself and you’re facilitating a lot of e-commerce companies. I’m always curious how. Some of these smaller companies are doing it. I know some companies X explicitly avoid it fulfilled by Amazon and try to use other facilities like Allied Commerce and that sort of thing. Are you in touch with our company? Smaller companies are doing that today.
[00:44:28] Yeah, and a lot of times is maybe a need for them to fulfill themselves because there’s some sort of fabrication or something like that going on and that can’t be sent to a three people. But a lot are using large 3P LS. I don’t know if you saw Shopify announced that they would. Obviously there was a need. They have a huge network or a huge community of e-commerce companies and they said we need fulfillment help and we need to be able to compete and we need facilities all over the country. So Shopify came out and then also recently eBay made a similar announcement that they would essentially have three APL services. And so you can see that there is that is gonna be a big lever for smaller e-commerce players to do it. I know a lot of especially on the small e-commerce players, a lot of them do use the post office or the hybrid U.P.S. Fed ex post office things because they are significantly there is quite a bit of savings there. And but then a lot of e-commerce players, you know, there’s so much smaller e-commerce players. I. I don’t have a statistic on it, but I see a trend towards very small shipping bill goods versus large items and large items, it’s really big players like a Wayfair or something like that. You aren’t really making moves. And so you can definitely see those challenges and and how they’re trying to compete. But again. Those alternates to FBA are rarely what you’re going to see, a lot more of that popping up and there’s a lot of such a demand.
[00:46:08] I think we’ll talk about this probably when we talk about warehouse space, but there are a lot of fractional warehouse type companies.
[00:46:14] Well, you people look into my crystal ball here. I’m sad where we’re going next.
[00:46:17] That’s where we go next. So you’re right on the mark. So warehousing space and Catholic warehousing space is full in many ways. Why is that? Tariffs.
[00:46:30] Uh, no. It’s true. I mean, you heard of it. Uh.
[00:46:35] Front loading. Uh, front loading starting last year was just resulted in such a. Massive demand for extra warehousing space, in fact, the, uh, U.S. Census Bureau’s monthly sales to ratio. Uh, I believe that’s what it is. SALES to inventory ratio was like went up to one point 3 9 in May, which was. A slight increase. And we’re seeing demand for more warehousing space, of course. I mean, all thanks to e commerce. But also demand closer and closer to that customer, right? Uh, because, again, you know, we want to stuff two days ago. Um. So it all has a trickle down effect and there is a lot of really cool services solutions that are coming to the market. Thank you, Paul.
[00:47:30] Um, Cathy.
[00:47:34] Um, I mean, U.P.S., FedEx, you know, our our friends over there have introduced solutions to help with this. Mm hmm. We also have some other cool startups here in town stored.
[00:47:44] Right. Has a really neat, uh, business model as well, trying to solve that whole warehousing need. Mm hmm. Um, you know, it’s all about automation. Just to get the items fulfilled faster, get them out the door and until a package car or so. Have you? Yeah.
[00:48:02] I don’t know if you guys saw it was like maybe last year. Prolog is one of the largest industrial space. They built a two story. Distribution center in Seattle. And it’s where the trucks can actually go to the second level like a 53 footer and backup. And you think of I can’t even fathom the cost to build something like that, especially in C. Yeah, right. And and so it it really. That to me just illustrated with the price and the value and the proximity to that to justify the calculation to build this facility. It was. I was just astonished that that’s where we have that is starting to happen now.
[00:48:49] Yeah. Well and and. That that companies like pro lodges are have an sometimes miniscule spaces. Then companies like Stored and Simple Global and the other players in that micro warehousing space. Um, are taken advantage of. Yeah, right.
[00:49:08] You know, we’re gonna see a lot more of that kind of stuff. You. These trying times at the. And we all know this. Eat the e-commerce age is and these these ever evolving consumer demands. We’re just talking about this earlier show, years and years ago. Uh, you know, when we ordered stuff from. I ordered another day. And I did. I had no need for it for like a month. Right. But when wherever I ordered it from no name. But they slipped. It went past a two hour delivery window for one reason or next. And, uh, subconsciously, allies like frustrated. And then I was like, it took a minute, Scott. You don’t need this for like weeks. So what’s the problem? But that is so it is. That’s where we are. That has how we’ve been trained by what is the art of the possible. Really? Yes. I remember the commercial on TV with a blue background and a yellow phone number.
[00:50:02] Yes. Allow six to eight weeks for delivery. Yes. Yes. It’s a six day week. Right. Right. Cash on the way. I might not live here anymore. I couldn’t sleep.
[00:50:11] Yeah, but it is, uh. I find it fascinating to see how creative companies are getting stuff done. Like like the Seattle to store D.C. like some other things we’re doing U.P.S. doing some really cool things by getting closer and closer to the communities that are that you know, where the packages are going. And this is just a snapshot of what we’re gonna see head and total until we can have tell reporters, you know, straight from manufacturer to to our homes or renting. Oh, yeah. So with 3D print, a whirlpool fridge for me.
[00:50:47] I’d like to see something. So it’s interesting.
[00:50:50] You know, with when when we talk about this. Right. When I when I first and I did it, I talked to Shawn Henry and stored in. And who has the CEO. I’m sorry. See, CEO stored, um. Also a Georgia Tech ramblin wreck regulations to them on their series, eh? Yeah. Yeah. Right. Right. Um, but when I talked to him, I was stunned to hear that they had taken some space. And I think Mobile, Alabama, where Whirlpool actually wanted us to position like twelve refrigerators to be that much closer to the consumer. And I thought, you know, my initial thought was a company that does micro warehousing or micro 3p l like this would be for e-commerce, small e-commerce companies in which they are more nimble, you know. Right. But they’re also for some of the big, big companies who now feel compelled to deliver you a refrigerator when you order it, no matter where you order it as rapidly as possible. Right. It’s not six to eight weeks for delivery or even a week like you said.
[00:51:53] They know that that that transit time when you’re on the Internet can be the pivotal decision. Point of this is a comparable model. But it’s five days and this one’s two. Right. Yeah. About the same price. Well I’ll just get the one that’s two days. Right. They know that that is is a pivot point. Yeah. Yeah it is. You’re right.
[00:52:16] If we can circle this back before we talk about some of the additional pressures and warehousing. And Paul, when pick your brain on that, let’s circle back to Claire which is spelled C A C L A R E far for the record.
[00:52:28] Claire, whereas class c l. Me neither. We are we are established that.
[00:52:35] But, um, we need. All kidding aside, I want circling back because we need more Claire’s and more diversity in across industry because we’ve got to get more creative about addressing what we’re seeing and the demands and how we we make sure we get the right thing at the right price at the right time. That’s going to take much more diverse and in creative and out of the box thinking sorry for that beat up old cliche, but that s really what’s gonna take. And that’s one of the great benefits of successful practical effective diversity, not lip service diversity. And so that’s why I mean, we had a good phone with with the Claire doll and you know, on the front end. But the serious message there is that’s what we have to have, right? Yeah. Any comments there?
[00:53:21] Not my way. Totally agree with you. Okay. Yeah. Yeah. I. Look, I, um, I was at a conference where they were talking about A.I. artificial intelligence. And I was struck by the fact that one of the industry. Gurus, a guy named Danny Longo, who’s done real A.I. for many, many years for Google and etc cetera, and and builds A.I. models for a lot of the gaming. One of the things that he said was a lie is not about better models or better minds or better artificial intelligence algorithms. It’s about more because when you put more minds to a problem, you solve it more quickly and more effectively. Right. And I think that that that that was a realization to me in regard to A.I., because I’ve seen that happen when you put different people in a room like we’re doing here. Right. When you put different people in a room, you get more points of view and those points of view accrete to greater value more quickly. Right. Totally. So, yeah. I love it being a gray haired old white guy.
[00:54:31] I I’m serious. I get tired of seeing me all the time.
[00:54:37] Well, I mean, this is one of the reasons why I’m active on social media as well. I mean, a lot of people just kind of roll their eyes at social media. But I I feel like at times I’m in the minority when it comes to Twitter to me.
[00:54:52] I see Twitter as as a virtual library. That’s where I throw out articles that I know people are interested in particular topics or what have you. I like to share. The librarian and me.
[00:55:05] But I also like people tend. You do so quietly. Yeah. Very quiet. Well, yeah. One of the reasons why I left. But um.
[00:55:14] It’s getting people to talk. Yeah. To communicate with each other on that platform. And it has been social. You know, it’s such as that. So I’ve learned a lot. Yeah. And such. I mean that’s how I met Scott.
[00:55:29] Yes. And here we are. I know. I mean, doing it, talking about the biggest issues of the day in Supply chain. And so let’s talk about pressure, pressure, pressure, I think of David Bowie would say that.
[00:55:46] So my you to repeat. I love that. Yeah.
[00:55:49] All right. So, Paul, let’s talk about some of the pressure on further and further in town warehouse space to shorten these delivery times.
[00:55:57] Yeah. I mean, we have a lot of macro effects on that, too.
[00:56:01] I mean, we can there’s people are moving back into cities. Yeah.
[00:56:05] It’s people are wanting to live more and more in town. That then makes in town industrial space also attractive for retail. You know, we see a lot of that here in Atlanta. Conversion of, uh, old industrial space into retail for furniture stores or even just a any sort of, uh, kind of retail store front. And then you have coupled with that, the pressure of. Decreasing people’s wanting things faster. Right. We’re talking now and we talk about to our delivery windows now to our house. That’s only physically possible if in a city with traffic. If you’re within the city limits. And so you just have your kind of burning the candle at both ends here of just multiple parties and parties with deep pockets and now fighting and vying for this industrial space. It’s hard to build industrial space in town as well. Nobody wants that right up against their residential neighborhood. Right. And so it’s just kind of creating in some ways a perfect storm of something that we need more of. We’re getting less of. And it’s only going to continue in the same direction. And some retailers are at an advantage, right? Yeah. Yeah. I mean, you see, I know we talk about the retail apocalypse. Right. We’re just listing off names.
[00:57:38] But we talk about but there’s players out there like Home Depot here in Atlanta or Wal-Mart who are actually doing very well. Yeah. I mean, Wal-Mart would posted 20 quarters, no growth. And they’re getting a lot better with their e-commerce strategy than they are in there. I know. I saw when I was looking at it their earnings that were just released. I mean, e-commerce from Wal-Mart grew 37 percent. I mean, that’s massive. And granted, maybe it’s not a huge piece of their pie, but it’s a big number of. And. And if you think about then. OK. Why are these guys able to pull it off and others.
[00:58:18] And so you try and reverse engineer it. And what I see is that they’ve inherited through their business model the footprint that’s necessary to really thrive in this modern environment. They have in town products on the ground in near the rooftops. Yep. And within a short distance where they can deliver it. Yeah. And so, you know, I’m not saying that’s how they planned it 20 years ago, but it’s you can see that that has really starting to pay off for them and they’re able to to. Survive or really thrive and against pure e-commerce players.
[00:59:03] Yeah, yeah, and they’ve got the wherewithal to do it. I mean. Several companies have. Had a spike in being able to compete with the big e-commerce players, but they haven’t really had the wherewithal to sustain it. Right. I think, uh, Wal-Mart is one that has amazingly to me and I think I mentioned this earlier this week. Coles is in the top 10 in terms of e-commerce sites. Right. And there they are. There are big returns hub for Amazon, but they are also pretty well positioned for. Soft goods type retailer, they’re pretty well positioned to facilitate that. And you know, that close relationship with Amazon for returns makes me wonder if if Coles is not a great potential outlet for outbound right for delivery, what like like Wal-Mart is using their stores on the ground. Coles could be an outlet for Amazon fulfillment or anyone else who might be interested in working.
[01:00:07] I mean, that Coles Amazon return thing actually kind of I was kind of shocked almost. And, you know, mighty Amazon. There are no data centers.
[01:00:19] And I think building bases is building rockets and all these things. And then and then I can’t wait till I get there is really going to be as a base as billions, right. Yeah. And then and then I’m hearing on the radio and everywhere it’s like Amazon returns, it calls and and and.
[01:00:38] It I guess it showed to me that Amazon is still needs a some more brick and mortar presence. You know, they have their stores, they bought Whole Foods, but then again, they’re still they have you can do returns to U.P.S. stores and now you can do them to Coles. So apparently they’re they still recognize and need that. They don’t have enough of a footprint near the rooftops in America. And so really that really stood out to me. And then that rolls back to how Wal-Mart and Home Depot or other ones they do. They do have that footprint. And so, yeah, for sure.
[01:01:15] You know, it can be dangerous. Uh, when? Because clearly it’s important to Wal-Mart. And I’m not an insider. Never. Then the board meeting, never heard of, you know, this is just me, the consumer speaking. So in the spirit of good disclaimers. Right. Right. Yeah. King of this. But I mean, Wal-Mart’s pretty regularly.
[01:01:37] And when they are clearly competing in the e-commerce space is important Wal-Mart.
[01:01:45] And they’re making strides and they’re getting better at it. However, when it clicks, I think for Wal-Mart, that service and including in-person service can directly impact how folks are more likely to use Wal-Mart, the e-commerce site. That would be a dangerous combination, because if you look at what we’re talking maybe a few weeks ago, if you look at Amazon, it’s not just the machinery and how it works. And, you know, the the Web site and all the the technology behind it, it is a company that culturally is so laser focused on making the consumer happy that everything else falls under that North Star. And I don’t want to knock a Wal-Mart, want Wal-Mart to you know, their reason. There’s a reason behind their success. However, the in-store experience is still you know, when you compare Chick fil A, you know, to a lot of other experiences in the quick serve model. All right. Night and day. Right. And so really, when you when you go to chick flight is know that a great food. No wonder they’re so successful. I think that’s the still the missing component. With with with Wal-Mart. And that is that in person, your average service experience is just not quite there. Mm hmm. I don’t know that they all experience something similar. Do you see the same connection or does it matter? Can Walmart be a a huge e-commerce dominant player like Amazon without that aspect?
[01:03:11] From an e-commerce standpoint, I think they can compete very strongly without doing that. But if you’re if you’re going to maintain an. And in store presence, it’s gonna have to be a quality presence. Otherwise, if you’re not getting a quality experience in the store, why not just order it online?
[01:03:29] Well, I s a fair point. I think also one thing to think about is being part of your e-commerce successful strategy is going to be leveraging their footprint. Right, for in-store pickups. All right. Someone I’ve certainly have used e-commerce platforms to pick up certain things based on where I was or where team members were or what have you. And so that that is is directly as best that in-person in-store experience is directly touching that component of e-commerce. Right. And so that’s where I think, again, my hypothesis is if Wal-Mart gets really serious about dramatically improving that in-person experience. Mm hmm. Mm hmm. Holy cow.
[01:04:12] That it could be the next huge shift that’s gonna be. I could see in their situation, it’s gonna be a tough.
[01:04:21] To to kind of get steam behind that and, you know, I know all of us. We come from a supply chain world and you’re measuring touches, you’re measuring movements, you’re measuring steps, we’re measuring how many things can fit on the conveyor and how high the utilization is of a facility. And I know Wal-Mart, that’s that’s a lot of how they got to where they are. And what you’re talking about there is absolutely important. But inherently in a spreadsheet is added cost, which is hard to attribute to where you can put it at the NFL, right?
[01:05:01] No. Right.
[01:05:02] I can tell you that this truck move and how perfectly we packed this truck did allow more product to be moved and to be able to sell. But good point. So it’s it’s tough. That’s absolutely what they need. But it’s gonna have to try and burst through some of those analysis.
[01:05:18] It’s an age old problem in retail. Like I spent, we’ve all agreed, all of us who’ve been in Supply chain, by the way, Cindy Logo, Cap Gemini suggested this, that we’re never to say more than two decades. So I’ve been in in retail for about two decades.
[01:05:36] And I also know that and and that one of the experiences that I had was it’s really difficult and expensive to maintain that in-store relationship. I worked at a company that didn’t make it Kmart. Right. And Sears failed miserably at e-commerce and the in-store experience. And Sears practically invented e-commerce. They could ship you a house in 1983. Right. How that company, by the way, failed it. E-commerce. I will never understand. Mm hmm. Actually, I understand pretty clearly, but I don’t want to go into that. Yes. Next episode. But, um, but that’s really difficult. And that’s why companies I mean, we have to think back to retail, maintaining that hands on in-store experience is what Macy’s and Gamble’s and Nordstrom. Wanted to do and want to do. And you can see that that big that big gap. Companies like Wal-Mart who are willing to take more of a hands off approach in order to reduce the price in retail. So I don’t see companies like Wal-Mart going back the other direction. I really don’t. And I and I really think that, um, there’s you know, there is a store for every for every type of person. Right. You know, they’re just like there is a site for every type of person. You can buy the same thing on Amazon as you can on Wal-Mart. And by the way, I have a Wal-Mart dot com or or other sites. Right. So you can buy direct from the brand. You can buy it direct from the manufacturer. You can buy it from, you know, Billy Bob dot com or whatever that’s out there. I wonder if there even is one that’s selling the same thing. But it’s it’s about the customer experience that you expect. So if you expect a different customer experience, better perhaps than Wal-Mart, Target is a great alternative to you.
[01:07:29] Tell me to go jump in. No. Well, I’ll tell you, I’m. No, I’m telling you that you can expect that. And you’re disappointed. You can expect to be disappointed. I think maybe so. Yeah. I mean, look, if you want great service in retail, go to Nordstrom.
[01:07:45] And you know, that’s where you get great service not to get lost in all this stuff because we don’t want to kick Wal-Mart that they would admire about Wal-Mart and similar corporations is that they they quickly figure out what’s missing, especially as this as this paradigm shift in the e-commerce world took over. You know, they’ve kind of taken your lumps. They’ve acknowledged a lot of them in a lot of different interviews that we read and other content. And they are very practically trying to figure out how to get better with what they have that we know. Improving what I’m talking about is no less of a cultural transformation and we all know how difficult that is. That can be especially for companies of their size. So we’ll kind of see how it plays out. They they’ve got as we all know, they’ve got some huge advantages, including our footprint to be a much more dominant player in e-commerce and into better wage retail warfare against the Amazons of the world. So I guess what kind of see where it goes from here?
[01:08:37] Well, it’s at the same time Wal-Mart is making money in in e-commerce and in retail in general. Right. And it’s it’s difficult. It’s it’s interesting to have the perspective that people used to talk about Wal-Mart as if they were the unstoppable force in retail. Now, we almost feel sorry for what they were hurting small town retailers and everything. Right. It wasn’t that long ago that we were having that discussion. And recently, I just saw that just the Walton family makes four million dollars an hour off of Wal-Mart.
[01:09:11] So we are. I don’t wear than Billy Bob because is I don’t know what the Billy Bob family may financials. We had said that before.
[01:09:20] We kind of wrap this up and ask R. R. Ask Kathy and Paul where our listeners can go to find more information. Kathy, I thought you had what you want to weigh in real quick on on some of the Wal-Mart conversations or something you want to say that want to cut you off there?
[01:09:35] Yeah. Just to let you know. Billy Bob, dot.com is up.
[01:09:38] It is for sale. Yeah, it was just up for sale the last five minutes, I bet. Yeah. Yeah. I mean the value just wanted to play. Let me tell you about Wal-Mart.
[01:09:48] You have to keep in mind. I mean, I think when Sam Walton first started Wal-Mart back in the 60s. Yeah. It was it was more of a customer service focus. It shifted through the years where the focus wasn’t necessarily on customer service, but more about price. The price. Exactly. I never thought about going to Wal-Mart for the customer service. You know, it was always about the low price. And yet you’re absolutely correct, because back in the day, that was our Amazon. You know, they replaced Sears because Sears was their original Amazon thing, and then it was Wal-Mart. And now the question is, who’s gonna be after Amazon? Yeah, sure. Well, there will be.
[01:10:39] Well, let’s face it. Amazon is not the largest e-commerce retailer in the world.
[01:10:43] Ali Baba is. Yes, by an order of magnitude. As a matter of fact, that Malcolm and research thing. Yes.
[01:10:49] Malcolm in the research. He’s on it now by an order of magnitude, by the way. I mean. So, look, this it’s going to continue to be a shifting landscape. I think, um, you know, I will, too. I will continue to encourage people to vote with their dollars. If you don’t like the way a retailer Taylor is doing business using other retailers. There are plenty of options out there. I’m a huge fan of small business Saturdays and that sort of thing. I believe in this D direct to consumer initiative right where you can buy watches and shaving and and um, leggings and whatever else. Direct from the people who made you. Accurate. Right. And you can have that relationship. Yeah. With it with that company if you want to right now.
[01:11:34] That’s the beautiful thing about a commerce. It has leveled that playing.
[01:11:38] Absolutely. Small players can compete against the bigger players like never before.
[01:11:42] And and with no salt box and stored in companies like that that enable these small players to compete on that on that playing field. I mean that it is that sort of thing. Them that allows it. Right.
[01:11:55] And we are not using that term small players to rocket. We are proud. Small business here at Supply Chain Now Radio. Right. A lot of folks can relate that so that we just we’re meaning big businesses and small businesses with that with everyone’s a small but small player.
[01:12:08] If you think about it, we just talked about Amazon and Wal-Mart. Everyone else is a small. That’s right. For all of them. Now with the Internet and digital payments over it, they can. Yeah, they spent worldwide exposure. Right. And the ability to sell to anyone in the world. Yeah. Now with the Logistics that are available. Yeah.
[01:12:26] If you’re adding time, exciting time to be in business. So that kind of wraps up this episode. Supply chain buzz. A working title. Economic pressure. Terrible temper. A terrible tariffs and the retail apocalypse. Some are still at work. Paul facades out a bit, but before we go, we definitely want to do two things to make sure folks can get in touch with Kathy and Paul. They want more information and want to compare notes, what I have. And then we’ll talk about some upcoming events we’re going to be at. Greg. So, Kathy, how can folks tune in to Logistics Trends Insights, LLC?
[01:13:00] Okay. So our Web site is Logistics dot com. But you can always find me out on Twitter at Sam Roberson 0 6 or at Logistics T. I said one of the best Twitter feeds that you will be part of.
[01:13:16] I can promise you. I’ve been tracking it for years.
[01:13:18] Before I was, I was lurking still a man stealing jokes and still live in Dallas.
[01:13:24] I’m kidding. But great, great twitter feed to follow their Logistics dot coms. You, Oriel and Paul. How about yourself? Yeah. Sarbox. We’ll be opening our first location here in Atlanta and the Upper West Side later this year. You can check us out. Join salt box dot com. And you’re welcome to sign up for a tour. I’d be happy to show you around.
[01:13:46] And we’re also gonna be having our own podcast where we highlight some of the small businesses that we are helping to facilitate to reach that next level. Outstanding. Fantastic. It’s awesome. So let’s join salt box dot com and you can go get a tour. I love that. We’re gonna be over your way. And they’re located near fantastic food. Nuevo Laredo, Laredo. Bone Garden, Hong Kong. Tucker Yeah. Yeah. Yeah. All kinds of great shit might be there today in the team. I sure hope so. All right. Good stuff. Well, Kathy and Paul, thanks so much for joining us again.
[01:14:19] It’s Kathy Morrow Robertson, founder and the head analyst at Logistics Trends and Insights LLC. And Paul Dorrigo, co-founder of Salt Box dot com. Thanks again. All right. So, Greg, we’re going to wrap up on a couple of final announcements here. We always encourage our audience to come check us out in person, right? Yeah. Sit. We’re Kathy and Paul. Set, engage. Share your perspective. Tune in with us or or just check us out. So we are a proud media partner of the two thousand nineteen AIG SCA A see what you’re going to tell us what that stands for. Supply chain and Quality Conference.
[01:14:56] Yes. The, uh, the Automotive Industry Action Group and the South Carolina Automotive Council. September 12th and 13th in North Charleston, South Carolina. Yep. Uh, sponsored our broadcast will be sponsored by the Effective Syndicate. So we’re gonna be interviewing some really interesting folks there. We’re gonna see some great, fantastic cars. We are.
[01:15:17] In fact, we are. So we’re still nailing down and probably nailing down our interviews up until the day, the day of the event. But we’ve got folks from leaders from Volvo. Right, from Bosch and leave a lot of the folks from the world of automotive. They’ll be sitting down with us, sharing their insights on the industry and beyond and business in general. So looking forward to that, September 12th, 13th in North Charleston, South Carolina. What about, uh, we’re back here October 9.
[01:15:45] Yeah, for the Georgia Manufacturing Summit. Yep. All right. Tobar night. That Cobb Galleria. Right. And I think you’re doing a panel discussion in terms of track and supply chain.
[01:15:55] There you go. It’s our third or fourth you’re doing that. We’ve got. We already have our panel assemble, which we are usually if October 9th is the date of the event. We’re nailing down that panel on October 8, just in time. Right. Right. But we’ve got a get lineup way ahead of game. U.P.S., Mitsubishi Tree and Mitsubishi Train Electric, they HPC ultimate manufacturer up in Gwinnett. We have got H Empty X Industries, which is a worldwide manufacturer of sustainable furniture and. We’ve got our friends from Georgia Pacific and point eight. All right. One of our innovation leaders. So I think for leaders that are really gonna be able to tackle and offer perspective from different different angles are. October 9th, Georgia Manufacturing Alliance dot com for more information. OK. So then we’re gonna be in Austin, Texas. For what?
[01:16:46] For the e f t Logistics c i o forum. Right. So I. For transport is what DFT stands for. Yeah. That’s November 7th and 8th in beautiful and Weird. Austin, Texas.
[01:16:59] We’re going to keep it weird. So what about folks? If they’re interested, they can sponsor some of these broadcasts.
[01:17:06] Yeah, that’s right. Yeah. Out in the shameless plug. Please do. Yeah.
[01:17:10] I mean, seriously, it’s a great vehicle. I mean, for instance, at um at the EMT conference, they’re going to have 300 decision makers there. And, you know, these are the people making strategic decisions in big companies. If you want to take a look, you can see, uh, you can see that EMT. Yeah. Uh, their website. And, um, yeah, it is a great opportunity to reach those folks. Obviously, we’re always interested in talking to interesting people.
[01:17:38] We are interested in the interesting since we’re not interesting, we’re always we’re not gonna have some kind of answer. So we’ll have some up. Yeah. We’ll have some of the participants there.
[01:17:45] Um, you know, on on air and. Sure, it’s a great opportunity to get your name out there. Yeah.
[01:17:50] So when you flip the calendar to 2020. We’re working on a couple of things as early as just three weeks away. We’ll kind of see if that drops in. But, uh, the reverse Logistics Association Conference and Expo in Vegas in February 2020. You know, we kicked off our new Reverse Logistics series last week with none other than Tony Schroeder, who leads the RLA. We’ve got a media partnership in place with Moto X 2020, one of the biggest supply chain trade shows in North America. They’re expecting thirty five thousand folks coming to Atlanta.
[01:18:19] Right. I think it was when Congress sent. Yeah. And also Mode X is is hosting the Atlanta Supply chain Awards.
[01:18:28] So that was a great session last year. And we you know, we handed out some awards to some unbelievable.
[01:18:35] Thirty seven, the water supply kit, Diamond and ARM had to be tired.
[01:18:39] Kathy served on our judges panel. So I really appreciate that. Will be. We’re just we’re gonna be rolling out the whole enchilada, probably September 1st, including a rebrand, a brand new logo. It’s so hot.
[01:18:51] I love it. So you took all that? I went exciting, went broad strategic with rebrand. And you just just a. No, it’s not just. But I love the new logo.
[01:19:00] Well, most importantly, Moto X really excited to be doing the event again. Go a little bit bigger, but hosted by Moto X at the Georgia World Congress Center. And you look you can learn more about that show at Moto X show dot com. It’s free to attend. So check it out. Big thanks again to our guests, Kathy Mauro Roberson with Logistics Trends and Insights, Paul Dorrigo with Salt Box dot com. Be sure to check them out, including at their URL and their social media.
[01:19:28] Be sure to check out. Oh, thank you, Greg, for joining us. And thank you for your thanks. Oh, boy. Great conversation.
[01:19:36] This is we went live it over our tech time here today, but a lot of interesting discussion and some disagreement which which we invite. I love that some of our shows are sometimes we’re kind of on the same page. But here I like some of that. The point counterpoint. So thanks for tuning in. All right. Be sure to check out other upcoming events, replays of our interviews, other resources at Supply Chain Now Radio dot com. Again, you can find us an Apple podcast, SoundCloud, all of leading sites where podcasts can be sent. Can’t be found or sound bite. Be sure to subscribe. You don’t miss a thing on behalf of the entire Supply Chain Now Radio team. This is Scott Luton wishing you a wonderful week and weekend ahead and we’ll see you next time on Supply Chain Now Radio. Thanks, everybody.
Upcoming Events & Resources Mentioned in this Episode
Connect with Cathy on LinkedIn: https://www.linkedin.com/in/cathy-morrow-roberson-lti/
Connect with Paul on LinkedIn: https://www.linkedin.com/in/pdarrigo/
Connect with Greg on LinkedIn: https://www.linkedin.com/in/gswhite/
Connect with Scott on LinkedIn: https://www.linkedin.com/in/scottwindonluton/
2019 AIAG/SCAC Supply Chain & Quality Conference: https://myscma.com/scac-events/2019-supply-chain-quality/
Georgia Manufacturing Summit on October 9th: https://www.georgiamanufacturingalliance.com/annual-summit
eft Logistics CIO Forum in Austin, TX: https://tinyurl.com/y5po7tvw
Reverse Logistics Association Conference & Expo: https://rla.org/calendar/1
SCNR to Broadcast Live at MODEX 2020: https://www.modexshow.com/
SCNR on YouTube: https://tinyurl.com/scnr-youtube
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