[#168] Supply Chain in Numbers - Feb 27, 2023
Target is opening 6 more sortation centers, Kroger expands partnership with Gotham Greens, India has seen 16% more TEU capacity, Descartes acquires GroundCloud for $138M, A 2-mile long train in Ohio
Welcome to “Supply Chain in Numbers.” This newsletter tracks significant digits from the world of the supply chain. Five prominent numbers are published every Monday. If you have any feedback, please send it to me.
$100 million for six new sortation centers
Target is planning to spend $100 million to build a larger network of supply chain hubs to speed up and lower the cost of delivering online orders. The retailer plans to have at least 15 of the facilities, dubbed sortation centers, by the end of January 2026. It has already opened nine after testing the concept in its hometown of Minneapolis. The expansion will also grow Target’s workforce. On average, more than 100 people work at each sortation center. Over roughly the past six years, Target has leaned into a strategy of “stores as hubs.” It has turned its approximately 1,950 stores into mini-warehouses where employees help pick and pack the majority of the company’s online orders. Nearly 97% of its total sales were fulfilled by stores in the fiscal third quarter. [CNBC]
95% less water and 97% less land
Kroger is expanding its partnership with indoor farming company Gotham Greens to supply produce to nearly 1,000 stores by the end of 2023. In addition to supplying the grocer with produce, Gotham Greens will bring its plant-based dips, cooking sauces, and dressings to around 2,000 Kroger stores. This partnership comes as Kroger furthers its sustainability efforts and vertical farming becomes more mainstream within the industry. Gotham Greens farms use up to 95% less water and 97% less land with hydroponic growing systems in sunlight-powered greenhouses than field-grown farming. [Grocery Dive]
565,000 TEU capacity
The increasingly steady Indian container market is seeing a flurry of new long-haul services as ocean carriers deftly redeploy tonnage to improve capacity utilization and profitability. MSC’s US west coast and Asian connection is the latest example of people following the Cosco/OOCL consortium since the closing of Chinese trade lines. This has resulted in over 565K TEU of capacity being withdrawn from Asia-North America and Asia-Europe trade routes and diverted to India, which has seen a 16.2% increase in its capacity. [The Load Star]
$138 million acquisition
Logistics and supply chain software-as-a-service company Descartes Systems Group acquired GroundCloud, the creator of a cloud-hosted final-mile automation platform, for $138 million. Founded in 1981, Descartes is one of the oldest enterprise software firms on the block. It sells a suite of software products aimed at managing logistics and supply chains. GroundCloud’s cloud-hosted software platform combines operations, safety, and compliance. Final-mile carriers use it to receive customer delivery orders and plan and execute routes based on those orders. It also helps with training and monitoring delivery drivers in safety and performance, managing assets and resources, and analyzing the efficiency of logistics operations.[Silicon Angle]
A 2-mile-long train weighing 18,000 tons
The train derailed in Ohio — 32N — had 150 cars, 141 loaded and nine empty, was almost two miles long, and weighed 18,000 tons. The route was known to be unpleasant for crews and was nicknamed “32 Nasty.” According to the train’s load profile, 40 percent of the train’s weight was in the back third of the length, and the back half was the heavier half, countering the longstanding best practices that front-load the heaviest cars. Longer trains can be harder to control, and while the load profile might not have contributed to the derailment, it may have made it worse. [NumLock]