In Case You Missed It

• China's COSCO Shipping bought Orient Overseas Container Lines for $6.3 billion
• Walmart's new delivery initiative will fine early, late and ill-packaged shipments
• Amazon's Prime Day is a way to test logistics capacity ahead of peak season

Market Snapshot

Vacation plans and summer days are top of mind for many in July, but for shippers working with the retail industry, this month marks the beginning of the perfect storm that is peak season.

Over the next six to eight months, retailers will be ordering the bulk of their shipments as consumers prepare for the holidays and associated end-of-year purchases. Consumers expect shelves to be stocked as early as October, and for the supply chain, this means planning begins now.

Experienced shippers know the steps to this annual dance. In short, as demand rises and capacity is constrained, factoring in buffer time for disruptions or delays — even in the booking process — is essential.  Recent events and news show how the market is begging to adapt accordingly, too. 

The National Retail Federation projects imports at U.S. ports to be the highest this August since the start of the century, based on data from the Global Port Tracker, signaling retailers' intent to stock up early. To adjust for added demand, many carriers will implement peak season surcharge as of July 15, according to Flexport. Carriers are also mobilizing previously-idled ships, Drewry reports. And in the domestic market, logistics providers are looking for ways to keep and hire more warehouse workers in order to fulfill all necessary orders.

Reported slowdowns in the market aside, this peak season is poised to be one of the busiest yet as companies and consumers continue to adjust to e-commerce. Supply chain managers, meanwhile, are increasingly responsible for helping companies adapt to this market shift.

Technically Speaking

The world of technology seems to be converging, as innovation pushes seemingly disparate industries to work together for the next big idea.

Supply Chain Dive has previously reported on the complex links now prevalent between Detroit and Silicon Valley, in the push for self-driving vehicle technology. More recently, blockchain is dominating the conversation as banks, software providers and supply chain stakeholders look to tap into innovation.

IBM, having partnered with other major players like Walmart and Maersk Line, is reportedly targeting the end of 2017 as its deadline for announcing a new blockchain-for-food solution, dubbed "Food Safety Solution." Given new food safety regulations, blockchain provides an incredible opportunity to track the movement of products with software, rather than hardware. Nasdaq reports IBM is positioning the solution's benefits as more than just transparency, however, but also helping decrease food waste.

No good idea goes unchallenged, however: A startup in the U.K. attempting to bring the same concept to market recently raised $400,000, according to Undercurrent News. The funding round follows a successful pilot project in Southeast Asia, where Provenance (the startup) tracked Tuna throughout the supply chain. IBM has much larger coffers, but sometimes, the first mover is the one that wins (or, in the tech world, at least gets acquired).

In other news, two banks recently partnered with supply chain solutions providers, perhaps a sign of the increased role of financial technology within the industry. HSBC partnered with GT Nexus and Santander partnered with Tradeshift, according to various reports. Meanwhile, Samsung announced a $150 million investment fund in the EU; GT Nexus' parent company Infor launched an expanded end-to-end ERP solution; and logistics startup Transfix raised $42 million in a Series C funding round.

Breaking Ground

Site selection is in the spotlight, as major companies looking to invest in new factories or warehouses consider tax incentives and labor limitations in their geographic choice.

Electronic manufacturer Foxconn Technologies made the news last week, as it was reportedly considering building a new high-skill factory in Wisconsin. Such a deal would be a major boost for a Great Lakes region that has bemoaned the loss of U.S. manufacturing, but securing the factory is not proving easy. The technology giant is reportedly questioning whether Wisconsin has the talent pool available to staff 10,000 high-skill positions, according to the Milwaukee Journal Sentinel. The state has said it's up for the challenge, but it will take more than goals to convince a manufacturer.

Fortunately, state officials can offer tax incentives to bring such deals to fruition. As an example, the Miami Herald reports a central-Indiana city is offering XPO Logistics $2 million in tax breaks to reopen a warehouse that could hire up to 1,100 people. Employing nine-times more workers, it's easy to wonder how much Foxconn's tax break could be.

Of course, taxes and talent are not the only reasons supply chain stakeholders set up shop in a city. Sometimes, it has to do with convenience and opportunities for future growth. For example, in Charleston, the growth of cold storage brought the state port authority to open a new service center for cold chain logistics, the Post and Courier reports.

Mergers & Analysis

After months of speculation, a major shipping industry deal was finally singed this week, as China's COSCO Shipping agreed to buy Orient Overseas Container Lines' parent company for $6.3 billion. The deal, if approved, would make COSCO the world's third-largest container line by capacity.

Now, with the first half of 2017 now in our dealmaking taillights, a quick survey of the landscape is in order. Overall, U.S. deals have slid gradually over the past two years, according to PwC's Money Tree report. On the shoulders of 1,152 deals in Q2, U.S .deals totaled a cumulative $18.4 billion, a jump in $4 billion over Q1, which actually saw 44 more deals take place.

Geographically, California is still the hotbed for business combinations, with San Francisco, Silicon Valley and LA/Orange County occupying three of the top five regional spots for deals in Q2, totaling a combined $8.8 in deal value across 432 deals, with the state creating 469 deals and $9.2 billion in value overall. In second place, New York finished the quarter with 147 deals totaling $2.5 billion, and Massachusetts was third with $1.4 billion in value on the shoulders of 97 deals.