Supply chains are constantly changing as new rules, technologies, resources and market trends transform operations. Here's a skim of the week's indexes, technology announcements, expansions and M&As from around the web.

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Market Snapshot

Peaks and troughs denote the economic cycle, and all signs pointed upward for the transportation industry based on January figures. Some may point to simply "less bad" results for the freight sector, but for the fifth month in a row, year-over-year statistics are significantly higher.

Various indices point to different reasons for the end of the recession: a generally stronger economy, a renewed rise in the price of crude abating the rail industry's declines and lower inventory levels. A combination of all, of course, is most likely.

The Cass Freight Index report for January 2017, for example, notes that although shipments were down 6.4% on a month-to-month basis, volumes grew by 3.2% compared to the previous year. In fact, a look at the graph of percent change in shipments on an annual basis suggests the recession that began in March 2015 concluded last October. 

Yet Avondale Partners, who author the report, warn strong headwinds may lay ahead for the transportation sector, as the U.S. Federal Reserve appears poised to raise interest rates again in March, further strengthening the value of the dollar. A stronger currency discourages exports and production (due to storage costs), however, which carves into the transportation industry's volumes and revenues.

This same dynamic, however, may be helping the trucking industry. While a general decline in total shipments due to a stronger dollar will affect the subsector just the same, a rise in storage costs discourages inventory gluts and increases manufacturers' reliance on trucking for just-in-time production.

The American Trucking Associations noted its seasonally adjusted For-Hire Truck Tonnage Index rose 2.6% last month on a year-over-year basis. "The most recent positive sign for truck tonnage is the large drop in the inventory-to-sales ratio during December," ATA Chief Economist Bob Costello said in a press release. "The decrease put inventories throughout the supply chain, relative to sales to the lowest level in two years." 

Cass' other indices reflect similar shifts. The Cass Truckload Linehaul Index recorded a less bad decline in linehaul rates last month — 0.3% compared to 0.9% in December and 1.5% in November — and the Cass Intermodal Price Index rose 3.8% last January, marking the largest increase since October 2014.

Technically Speaking

Last-mile delivery providers are upgrading their technology capacity as the world becomes increasingly connected and reliant on quick services.

Deutsche Post DHL Group recently signed an MOU with Huawei Technologies wherein the Chinese company will provide the company with Internet of Things (IoT) devices, network infrastructure and consulting services as the German group equips its supply chain with sensors.

Meanwhile, UPS entered the race to develop delivery drones in style by sending a drone to a doorstep and back off the top of a delivery vehicle. The concept is not new, as we reported Matternet and Mercedes-Benz designed a similar idea last fall, but it marks the largest step to autonomous last-mile delivery by a parcel carrier. 

However, skeptics of the concept abound as tight regulations threaten to slow commercial deployment. A recent Gartner report suggests drones would only be worth 1% of the market by 2020, although personal drone use will continue to grow. That timeframe may seem far off, but considering self-driving cars are also expected to reach the market by then, the next decade could see great shifts in the world of logistics.

Yet, supply chains are slow to transform, and last decade's developments are still changing distribution practices today. Online home improvements store BuildDirect recently launched BuildDirect Gateway, a service that allows other companies to use the company's shipping network to deliver their own heavy items, whether to a warehouse or direct to consumer. 

In other news, LEGO announced it would use JDA's software solutions; Infineum partnered with Logility; and Savi launched a new product, Savi Visibility, to improve ETA forecasting across various modes. 

Breaking Ground

Ports continue to up their ante on infrastructure to handle greater traffic from larger vessels, particularly in the East Coast. 

The Maryland Port Administration recently announced it would purchase 103 acres in Baltimore from Point Breeze to expand its space and store shipping containers and roll-on/roll-off cargo in 70 acres of the property. The other 33 acres will be sold off to Rukert Terminals, Baltimore Business Journal reports. The Port of Baltimore handled more than 10 million tons of cargo for the first time in 2016, and is preparing for further growth.

Similarly, A.P. Moller-Maersk's terminal operator APM Terminals announced a $130 million investment boost for the Port Elizabeth terminal at the Port of New York and New Jersey to buy four cranes capable of working on ultra-large containerships, American Shipper reports.

Meanwhile, Dollar General is expanding its distribution footprint in New York with a $91 million, 103-acre distribution center. The 750,000 warehouse in Florida, NY will be the company's 16th such facility and is expected to service 800 stores in the northeast. 

In other news, Idaho-based WinCo Foods opened a $135 million, 800,000 square foot distribution center in Denton, TX and Merck & Co. appears to be moving out of its Suwanee, GA, distribution center, according to a listing by the Global Cold Chain Alliance.

Mergers & Analysis

Global logistics provider DB Schenker created a buzz this week when it announced it was looking to break into the U.S. market through acquisitions.

The strategy is hardly new, as a wave of acquisitions in the logistics market over the past years have demonstrated that it is the most efficient way to scale and expand geographic reach, according to The Wall Street Journal. FedEx, UPS, DSV have all proven the strategy successful. 

Perhaps one of the most prominent examples of this growth, however, is XPO Logistics. In 2013, the company recorded only $702 million in annual revenues before engaging in an aggressive acquisition strategy, which led the company to annual revenue of $3.68 billion last year. However, the company recently announced it would not acquire any companies in 2017 as it consolidates its various services in the upcoming year.

But the biggest benefactors of the logistics acquisition hunt, it seems, are the various startups seeking to disrupt the market through technology. From Coyote Logistics to uShip, logistics providers often find it more efficient to partner or acquire a technology solution than develop one in house. 

Whether 2017 will become a hot year for logistics acquisitions though remains in doubt, as a global market upswing has led stocks to rise, and acquisitions to become more expensive.

In other news, FedEx and USPS extended their express contract to 2024; European Union antitrust regulators said they would vote on Maersk Line's acquisition of Hamburg Sud by March 27; and Texas-based Central Freight Lines acquired Southeast and Mid-Atlantic regional LTL carrier Wilson Trucking.