Alibaba And Amazon Battle For 3PL Supremacy
Alibaba and Amazon are battling to control the third party logistics market by providing supply chain logistics services to outside clients.
Cainiao, the logistics division of Alibaba, is now offering end-to-end logistics services to Japanese and South Korean importers and exporters and have started an air charter service between Asia and South America. While Amazon is well on its way to becoming a global player in providing logistics services to other companies as an extension of the logistics infrastructure they created to serve their own needs, Alibaba understands they must catch up with Amazon’s growing dominance in the field to remain viable.
Cainiao aims to cover international shipping by sea and air, customs clearance, trucking, warehousing and last mile delivery. By offering an in-house turnkey service, they will reduce transit times, take control of their supply chain and reduce costs that will benefit consumers through more competitive pricing and faster delivery times.
Alibaba plans to operate about 1,300 chartered flights by the end of 2020. Amazon is offering a full range of logistics services in Europe and recently opened an air hub in Germany to support its Prime delivery service . In the U.S., Amazon offers ocean freight services for its own imports as well as other customers.
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(Photo credit: Alibaba Group)
Aircraft Fuselages Are Shipped By Rail In An Unusual Combination Of Transport Modes
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A unique combination of transport modes was captured on video in a way you wouldn’t expect when Boeing 737 MAX aircraft fuselages were filmed during transport by rail through a narrow railroad tunnel. Although the video may seem to show something that can’t possibly be right, it is all too real.
The fuselages are manufactured by Spirit AeroSystems in Wichita, Kansas. Transporting such large pieces of equipment presents a challenge due to height and width limits for over-the-road transport. Due to their dimensions, they must be transported by rail without the wings attached, as the fuselages alone are too long to be transported over the road from the factory in Kansas to Boeing’s assembly facility in Washington State. The fuselages are meticulously prepped for shipment on railcars to ensure sufficient clearance through tunnels.
On June 4, 2020 Spirit AeroSystems was directed by Boeing to stop production on four 737 MAX shipsets and avoid starting production on sixteen more units for delivery in 2020 due to COVID-19’s impact on air travel in an effort to reduce unnecessary production costs. Spirit’s production was subsequently lowered from 125 units to 72 units for 2020. As of September 2020, CEO Tom Gentile said Spirit expects to be back to 10 aircraft per month on the 737 in January.
That is good news for Boeing, the passenger airline industry and the air cargo industry. Of course railroad executives will be very happy to resume shipments of this special cargo. The Boeing 737 MAX was grounded in March 2019 after two fatal crashes.
Read more about the ripple effect that the grounding of the 737 MAX created in combination with the challenges presented by the pandemic at: