Thursday, March 31, 2016

E-COMMERCE AND RETURNING VISITORS

Delivering the Customer Experience with Order Immediacy is a great way to get customers to return. That requires the new supply chain.

Returning customers are far more valuable to online retailers than new customers

Andrew Meola

Mar. 30, 2016, 2:43 PM

BI Intelligence
This story was delivered to BI Intelligence "E-Commerce Industry Insider" subscribers. To learn more and subscribe, please click here.
New customers are certainly important to retailers, but returning customers should mean more.
A new report from Monetate reveals that the value of returning customers is greater across numerous product categories, and that value continues to grow every year.
Returning visitor transactions comprised 48% of all U.S. e-commerce sessions in the fourth quarter of 2015 and spent $2.7 billion, almost double what new shoppers spent in that time period.
New online shoppers are only half as likely as returning customers to place an item in their card at just a 7.6% rate, compared to 14.8% to existing shoppers (up from 13.6% in the same period one year earlier).
New visitors also have higher bounce rates, the act of leaving after visiting just one page (typically the homepage). Those shoppers leave 34.8% of the time compared to 24.4% for returning shoppers, though that number is up from 23.1% in the year-ago period.
Returning visitors also have a higher conversion rate at 4.5%, up slightly from 4.4% in Q4 2014. New visitors convert just 2.4% of the time, down from 2.5% in the year-ago quarter.
So returning customers are clearly important, but longevity is also crucial. The top quartile of worldwide e-commerce companies receive most of their revenue from repeat customers at the two-year mark, notes RJ Metrics. At three years, repeat customers represent more than 60% of revenues for those companies.
Online retailers, therefore, need to know who their customers are in order to hold onto them and reach those two-year and three-year milestones. And there are numerous ways to do that.
Cooper Smith, senior research analyst at BI Intelligence, Business Insider's premium research service, has compiled a detailed report on e-commerce demographics that breaks down U.S. online and mobile shoppers by gender, age, income, and education, and takes a look at what they're shopping for, and how their behaviors differ.
This is crucial information for retailers who need to know who their potential customers are online in order to market to them effectively.

BI Intelligence
Here are the surprising facts about men's e-commerce and mobile commerce habits:

When it comes to e-commerce, men drive nearly as much overall spending online in the U.S. as women. The conventional wisdom is that women drive shopping trends, since they control up to 80% to 85% of household spending. However, In 2010, comScore estimated that women account for $6 out of every $10 spent online. In 2012, a Greenfield survey found that women account for 58% of online spending in the U.S.
Men are more likely to make purchases on mobile devices. 22% of men made a purchase on their smartphones last year, compared to 18% of women. And 20% of men bought something on a tablet, while the percentage for women was 17%.
Many men say they would like to shift all their spending online. 40% of American men aged 18 to 34 said they would "ideally buy everything online," compared to only 33% of women the same age. (See chart, above.)
Men are avid users of online auction sites: 43% of men ages 18-34 say they typically shop on online auction sites like eBay, compared to only 31% of women the same age.
Men are price-conscious: Men of all age groups are more likely to look for lower prices on their phones than women, and are more likely than women to buy things on their phone.
Male teens are also more avid e-commerce shoppers than their female counterparts: Among teens, the proportion of males who report shopping online (86%) is ten percentage points higher than that for teen girls (76%). Also, a higher percentage of teen boys say they shop at general interest e-commerce sites like Amazon (34%) and eBay (8%) than is the case among teen girls, who prefer more specialized and fashion-conscious sites.

In full, the report:

Examines e-commerce behavior by generation
Indexes e-commerce spending by age group against the amount of time a given demographic spends online.
Breaks down online spending habits of millennials and teens, including the brands and products they shop for.
Examines the factors behind what drives online purchases among millennials.
Identifies Gen X, boomer, and older consumers' online spending tendencies.
Looks at how education and income influence e-commerce spending.

Interested in getting the full report? Here are two ways to access it:

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Purchase & download the full report from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of e-commerce demographics.

INDIA E-COMMERCE FIRMS WELCOME FDI

e-commerce startups welcome 100 percent automatic FDI move

Posted By: Gopi March 31, 2016

Bengaluru, March 31 (IANS) A slew of startups on Thursday lauded the government allowing 100 FDI in e-commerce through the automatic route clause, terming it a move in the right direction.
Anish Basu Roy, co-founder of On-cloud Marketplace, said: "I think it is a step in the right direction. FDI investments in the ecommerce marketplace model stand to eventually benefit thousands of small businesses and suppliers through better market access and world-class technology."
Angel fund YourNest founder and CEO Sunil K. Goyal said the government has given clarity with the FDI move which has potential to attract investments not only in online marketplaces but also offline.
"This will impart transparency in transaction volumes enabling higher government revenues. The SME sectors as well as unexplored target segments such as farmers, rural India and regional players selling in the marketplaces will now get further boost and shall see more investment commitments," he said.
Online jewellery player Bluestone.com founder and CEO Gaurav Singh Kushwaha feels the government has recognised e-commerce sector with the latest move.
"It is good that the government has given recognition to the e-commerce sector and clearly differentiated the various models such as marketplace, inventory led, manufacturers and manufacturers with single brand," he said.
He added that these guidelines are a positive step towards providing clarity to the fast growing e-commerce sector.
Offbeat products e-commerce platform Kraftly co-founder Saahil Goel said the 100 percent FDI through automatic route is welcome regulation for the sector.
"It will curb unrealistic online discounting by the large B2C horizontal marketplaces and will level the playing field for all retailers," he said.
The startup enabling 20,000 offline retailers to sell their wares through its platform believes the move will allow individual and small brands to prosper in the e-commerce market by empowering them to compete fairly on price.
Nidhi Agarwal, founder and CEO of Kaaryah, a lifestyle solutions startup catering to women's non-casual wear offering up to 18 different sizes, welcomed the move but also called for other important decisions to be made.
"Implementation of GST and a transparent tax regime will make it easier for us to raise funds as well as to sell our product across countries," she said.

AMAZON IS MOST REPUTABLE U.S. FIRM

Retail

Amazon is crowned the ‘most reputable’ company in the US

Michael Heny

posted on

March 29, 2016

Amazon was crowned the “most reputable” company in the United States for the third year in a row. The ranking concerns the most reputable companies doing business int he United States and is put out by The Reputation Institute.
The organization compiled the list using 83,000 ratings gathered from people in the U.S. in the first quarter. Areas of interest include products and services, citizenship, leadership, performance, innovation, governance, and workplace.
Out of the Top 10 most reputable companies, seven are headquartered and/or founded in the United States. In order to put together its annual list, RI assigns each company a score called The RepTrack Pulse, which includes how the public feels about the company.
The news that Amazon tops the list is fairly surprising because the company took a hit last year when the New York Times published a story last summer portraying Amazon as a “brutal” company to work for. After the scathing article, more information was made public, including negative stories of life as a worker at an Amazon warehouse.
Despite this, Amazon’s reputation remains intact. While the company’s scores in Leadership, Citizenship and Governance dropped, its overall rating improved from 84.1 to 85.4. Amazon’s score for the public’s perception of the company as a good workplace fell to 74.5 from last year’s 81.1. According to RI, the people who aren’t sure about Amazon’s workplace or if the company is honest about its activities increased from 20 percent to 47 percent, and 15 percent to 23 percent respectively.
The news isn’t overall surprising because the online retailer has reinvented the shopping experience for Americans. It offers Amazon Prime and Video, which includes an online streaming alternative to Netflix. The company offers some decent e-readers and tablets at affordable prices and has a firm grasp of the up-and-coming cloud computing market.
The Top 10 list includes Amazon, Hallmark, Samsung, Kellogg Company, Sony, Johnson & Johnson, Rolex, Intel, Netflix, and The Walt Disney Company. It should be noted that, despite Apple’s reputation and the overall satisfaction of its product owners, the technology giant didn’t make the cut.

CHINA MANUFACTURING HAS GOOD MARCH

Money & Markets

China's manufacturing sector bounces back

David Scutt Tomorrow at 12:00 PM

Photo: Kevin Frayer/Getty Images.

Activity levels across China’s manufacturing sector expanded for the first time in eight months in March, according to a report from China’s National Bureau of Statistics (NBS).
The government’s manufacturing purchasing managers index (PMI) rose 1.2 points to 50.2, marking the first expansion in activity levels seen since June 2015.
It beat expectations for a smaller increase to 49.3.
The PMI measures changes in activity levels from one month to the next, with 50 signifying that activity levels were unchanged from one month earlier.
The vast majority of the strength was concentrated in larger firms, offsetting persistent weakness in small and medium sized enterprises.
For larger firms the PMI jumped to 51.5 from 49.9 in February. The readings for smaller and medium sized firms came in at 49.0 and 48.1 respectively, indicating contraction.

Like the headline index, the internals of the report were also reasonable if not spectacular.
Output accelerated to 52.3 from 50.2, the fastest expansion seen since September 2015, while purchase quantities rose to 52.6 from 47.9 in February.
Encouragingly, new orders and new export orders — lead indicators for future levels of activity — bounced back into expansionary territory, rising to 51.4 and 50.2 respectively.
Elsewhere readings on employment, order backlogs and inventory levels continued to contract, registering 48.1, 45.7 and 48.2 respectively.
Mirroring the reversal in China’s manufacturing sector, activity levels across the nation’s services sector also improved, expanding at a faster pace in March.
The non-manufacturing PMI, also released by the NBS, came in at 53.8, some 1.1 points higher than February. Though modest, the expansion was the quickest seen since December last year.
Though it tends to receive far less attention than the manufacturing report, this reading is perhaps more important given the government is looking to the services sector to help power China’s economic growth moving forward.

Risk assets, particularly those closely aligned to the performance of the Chinese economy, have responded positively to the news.
The Australian dollar briefly hit .7700 while Australia’s ASX 200, having been down more than 1.7% earlier in the session, trimmed its losses to 1.1%.

CHINA RAILWAY REPORTS GOOD RESULTS

China Railway incomes rises to 11.6b yuan

Business | Mar 31, 17:42

China Railway Group (0390) announced today attributable profit for the year ended December 31, 2015, grew by 13.8 percent to 11.67 billion yuan on revenue of 99.94 billion yuan, up by 1.7 percent on year.
China Railway is mainly engaged in infrastructure construction, survey, design
and consulting services, engineering equipment and component manufacturing, property development and other businesses.
Earnings per share were 53 fen, up by 10 percent over the year before.
The company is ultimately held by the State-owned Assets Supervision and
Administration Commission of the State Council.
For the first time, newly signed overseas contracts surpassed US$10 billion, the company reported.
The company said it has more than 45 percent share in the railway infrastructure market, more than 50 percent share in the urban railway infrastructure market and about 12 percent share in the highway infrastructure market.
The value of new contracts increased by 2.4 percent to 957.02 billion yuan, China Railway said.—The Standard

ANOTHER HOME DELIVERY OPTION AND PROBLEM FOR RETAILERS WHO PRACTICE CLICK AND COLLECT

Postmates Starts an Amazon Prime-Like Service for Delivery

Subscriptions cost about $10 a month to cover same-day delivery from 3,000 or so stores and services in the U.S.

Ellen Huet ellenhuet

March 31, 2016 — 1:00 PM EDT

On-demand delivery startup Postmates is taking a page out of Amazon.com's book and offering a subscription service it hopes will hook customers by charging a monthly fee for free delivery.
The program, called Postmates Plus Unlimited, costs $9.99 a month. Subscribers get free same-day delivery on orders of $30 or more from Postmates's stable of partners—some 3,000 stores and services in the U.S. Subscribers also avoid paying the 9 percent service fee that Postmates usually charges customers on each order.
When Postmates was launched in 2011, it made money from the service fee and steep delivery charges, which were often $10 or more. But in the past year, the company has focused on expanding its merchant partner program, Postmates Plus. Once restaurants or retailers sign up as partners, their delivery fees drop to a flat rate of $3.99, which makes customers more likely to order. To make up the difference, the restaurants pay Postmates a commission on each order, anywhere from 15 percent to 30 percent.

The company hopes its subscription service will create a virtuous cycle in which customers order more often, luring in new merchant partners. "The great thing about Amazon Prime is it centers everyone's default e-commerce to Amazon, and on Amazon, you default to products on Prime," said Sean Plaice, co-founder and chief technical officer at Postmates. "That's the same thing we're looking to have here. Why use any service but Postmates to get your food delivered? You have a subscription. It gives you the best, most affordable delivery."
Subscriptions could allow Postmates to negotiate higher commission rates with new partners. Postmates's average margins on partner orders are lower than on nonpartner orders, said Kristin Schaefer, the company's vice president of growth and strategy. Merchants typically sell more than three times as much volume through Postmates after they become partners, Schaefer said. About 40 percent of Postmates's orders are through partner merchants, according to the company.
While many other on-demand services are eager to show how they're increasing their profit margins, Postmates said the move will cut into its margins at first. "We're willing to sacrifice a bit on our margins to give our customer a much better experience," Plaice said. "We know that—ultimately, strategically—this is the business we want to build, something that's affordable to everyone."
Postmates can do this because it is making more than it's spending in 15 of its 40 markets, Schaefer said. The business is "contribution margin positive" in those markets, she said. Costs in that calculation include courier pay, office rent, salaries for local operations teams, and the cost of courier and customer acquisition, as well as parts of marketing and customer service that serve that market. They don't include most employees at headquarters, such as coders, executives, and designers.

"Postmates has always had strong unit economics and strong gross profit margins," Plaice said. "I know there's a lot of doom and gloom around the on-demand apocalypse, but we get lumped in with that, and it drives me crazy."

AMAZON USES ROBOTICS TO SPEED UP E-COMMERCE ORDER IMMEDIACY

Amazon's automated warehouses push limits of quick shipping

Kyle ArnoldContact ReporterOrlando Sentinel

Click and it's on your doorstep: Amazon's automated warehouses push limits of quick shipping

The robots at Amazon's Central Florida facility get to work the minute a local customer puts in an order on the company's website.
The response time was part of the logistics that Amazon showed off in a rare tour inside its Ruskin "fulfillment center" Wednesday. Nearly 18 months after opening the 1 million-square-foot facility, the center employs 2,500 people year-round.

The center uses high-tech automation, where much of the lifting and moving is done by robots, while humans help sort, pack and ship the delicate products.
Inside, robotic yellow shelves identify products and move independently to the foot of an Amazon employee. Employees put the products into bins, then onto conveyor belts where other employees pack it into boxes or envelopes.
Facilities such as the ones in Lakeland and Ruskin are the crux of Amazon's nationwide push to put its products in the hands of customers at the pace they want, said Chris Monnot, general manager of Amazon's Ruskin Fulfillment Center.
"Our goal is to ship the customer whatever they want, at whatever time they want it, in the fastest way possible," Monnot said.
Amazon has 50 of the fulfillment centers nationwide and is experimenting with drone delivery to cut down on shipping time.
The Ruskin facility was the first of two fulfillment centers opened in Central Florida; another in Lakeland opened in August 2015. The Lakeland facility, with 800 employees, handles large products such as diapers, toilet paper and televisions, Monnot said.
Amazon also has a "sortation center" in Davenport, where it sorts packages by ZIP code before delivery to the U.S. Postal Service. It opened in late 2014.
"People want their stuff quickly and they don't care why it's not delivered fast," said Nathan Hirsch, founder of Orlando e-commerce outsourcing company FreeeUp. "I think all the market places are starting to realize that and Amazon is been pushing the hardest."
Amazon's warehouse is filled with a combination of its own goods and those sold by partner "Fulfilled by Amazon" sellers.
Hirsch started selling as a Fulfilled by Amazon seller six years ago, a program where third-party companies market their products on Amazon.com and they are stocked in Amazon warehouses.
"I actually started out when I was 20 years old selling books from the dump, and then moved into textbooks," Hirsch said. "Now I sell baby toys and games."
Hirsch said working within Amazon's business structure is a fast-paced, high demand world. Customers now expect their product to arrive in one or two days.
Amazon's own membership Prime program promises free two-day shipping in many products. And last year Amazon launched one-day shipping on some products in the Orlando area for Prime members.
Winter Park's Ricardo Cuevas used Amazon to launch his product that helps teach small children Spanish. He now sells his Kid Start Spanish program through Fulfilled by Amazon. He's expanded to a few imported gadgets such as selfie sticks and Apple Watch bands.
Cuevas, who works full-time in the mobile communications industry, said he has to respond lightning-fast to customers. He hosts a local meet up for Fulfilled by Amazon sellers as well.
He said it is taking increasing work to keep up with demands from online customers.
"If someone has a complaint I almost always send them a new item, no matter whose fault it is," Cuevas said. "People's expectations are very high."

HAZMAT REGULATIONS FOR RETURNED GOODS

Hazmat Regulations Exception for Reverse Logistics Shipments Finalized

Friday, April 01, 2016

Sandler, Travis & Rosenberg Trade Report

The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has issued a final rule that, effective March 31, revised the Hazardous Materials Regulations applicable to return shipments of certain hazardous materials by highway transportation. This rule makes the following changes.
- codifies a definition for the “reverse logistics” of hazardous materials as “the process of offering for transport or transporting by motor vehicle goods from a retail store for return to their manufacturer, supplier or distribution facility for the purpose of capturing value (e.g., to receive
manufacturer’s credit), recall, replacement, recycling or similar reason”
- establishes a new section specifically for the shipment of hazmats in the reverse logistics supply chain
- defines the authorized packaging for reverse logistics shipments
- allows more flexibility in the transportation of lead-acid batteries by expanding an existing exception for reverse logistics shipments of used automobile batteries from a retail facility to a recycling center
- authorizes certain materials to be offered in accordance with the new reverse logistics requirements when transported by private carrier

M2 ADDS SERVICE FOR ASIA-USEC

NEWS FLASH: 2M Alliance to launch new Asia-USEC service

The 2M Alliance, comprised of ocean carriers Maersk Line and MSC, will also add a call in New York to another one of its loops between Asia and the U.S. East Coast.

By Chris Dupin |Thursday, March 31, 2016

The 2M Alliance, comprised of ocean carriers Maersk Line and Mediterranean Shipping Co. (MSC), will launch a new service between Asia and the United States Gulf and East Coast, according to a statement from MSC.
The new loop, which MSC calls the "Lone Star Express," will commence operations May 2 from Qingdao with an as-yet-unnamed ship. The loop will have a rotation of Qingdao, Ningbo, Shanghai, Xiamen, Yantian, Busan, Cristobal, Houston, Mobile, Miami, Balboa, Busan and Qingdao.
At the same time, MSC’s Everglades service between the Far East and the East Coast of North America, which also transits the Panama Canal, will be renamed the "Amberjack" and restructured to include a call to New York. This service, which is also consider a 2M Alliance service, currently has an average vessel capacity of 4,409 TEUs, according to ocean carrier schedule and capacity database BlueWater Reporting.
The Amberjack loop will have a rotation of Tianjin, Qingdao, Shanghai, Busan, Savannah, New York, Charleston, Jacksonville, Freeport and Tianjin. The first sailing of the newly launched Amberjack will be with the May 6 sailing of the Grasmere Maersk from Tianjin.
The Grasmere Maersk has a capacity of 4,658 TEUs, according to BlueWater Reporting. It is not clear whether the companies plan to increase the size of ships when the Panama Canal opens its expanded locks.
However, U.S. East Coast and Gulf ports in general are expected to get a boost in traffic when the new locks open in the Panama Canal later this summer.
MSC noted the 2M Alliance also has two trans-Suez services, which MSC calls America and Empire. These loops serve trade between the Far East and the U.S. East Coast, and both already call New York. The America has an average vessel capacity of 8,369 TEUs, while the Empire has an average vessel capacity of 8,635 TEUs, according to BlueWater Reporting.

COPYING AND DISASTERS--NOT JUST FOR LEAN. FOR SUPPLY CHAIN MANAGEMENT ALSO.

The W. Edwards Deming Institute Blog

To Copy is to Invite Disaster

by John Hunter October 27, 2014 Dr. Deming explained the dangers of copying from other organizations: “To copy is to invite disaster.” (page 10 of The New Economics). The proper corse of action depends on the system.
This, like so much of Deming’s advice, relates to understanding the organization as a system. A Deming management view requires thinking about relationships, psychology, capabilities, culture and process when evaluating options. And a Deming organization always validates improvements; most often by using the PDSA cycle.
What these points mean is that the correct course of action at a specific point in time in an organization depend on the existing view of the organization as a system. While eliminating performance appraisals is a good management practice. That doesn’t mean doing it tomorrow in your organization is the wisest course of action.
While eliminating inspection for quality is a good management practice. That doesn’t mean doing it tomorrow in your organization is the wisest course of action. The knowledge that elimination inspection is wise means you need to build your management system and processes so that they perform without this costly way of doing business. But if your processes are incapable today, the proper action is to fix that, not to drop inspections. You have to build to the point where you can drop inspections for quality.
A critical part of transforming an organization to take advantage of Deming’s management system is to understand the culture and psychology that exists today. People will react to statement, changes and proposed practices based on their experiences (both in your organization and in their entire lives).
If your organization hasn’t given people a reason to trust the pure intentions of management they are not going to do so. In such a situation, which is most organizations to varying degrees, the change process needs to be viewed as a long term, incremental process.

How employees interpret management proposals and statement depends on logic and psychology. Fear and blame based cultures predispose people to think blame and take things as blame. Even when the words don’t say that people take it that way.
This is one of the many reasons why the management system is so important. Even the exact same statement is taken very differently by people. In a good management system the statement ‘breach of protocol” can be seen most employees as fine – an indication of yet again seeing a systemic issue and raising it to be dealt with. In a blame based management system it is taken as threatening and maybe even disrespectful.
Peter Drucker Discussing The Work of Juran, Deming and Himself

In this clip Drucker mentions Just-In-Time works well for Toyota but companies trying to copy it find it doesn’t work for them because they are trying to install it on top of a system that doesn’t support it.

AMAZON DOES IT AGAIN--WITH HOME SERVICES

Amazon moves beyond the box with Home Services

The e-retailer says it is converting more consumers shopping for goods that require assembly or installation now that it offers home services at the point of purchase.

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Allison Enright

Amazon.com Inc.’s stated goal is to have available every product a consumer could want, and a year ago it began moving beyond the box to offer shoppers services that go hand in hand with some products. Just added a garbage disposal to your cart? By checking a box a consumer can hire a local company to install it. Bought a treadmill? Here’s a local service that will put it together.
Dubbed Amazon Home Services, the service add-ons are now available for more than 1 million products sold on Amazon, No. 1 in Internet Retailer’s Top 500 Guide. Service providers are available in 30 metropolitan areas—up from four (New York City, Seattle, Chicago and Los Angeles) at launch last spring—covering more than 40,000 ZIP codes, Amazon says.
Here’s how it works: When a consumer in a covered area adds a product that may require services to his cart, he sees local providers that can provide the additional services, and their estimated prices. A consumer can browse the service providers in his area and their starting prices for different jobs within the Home Services area on Amazon, ranging from plumbers to landscapers. After selecting a provider, he selects three time slots he prefers.
Amazon then connects with the service provider and gets back to the customer, typically within 24 hours, about the booking, at which time the provider and customer can discuss any job requirements or pricing adjustments that may be necessary. For example, a vendor may list a rate for installing a TV mount. That price is for a standard installation on drywall. If a customer wants it mounted on a brick wall, the price is higher. The consumer and vendor have to sign off on any pricing adjustments, and all payments are made through Amazon, and are charged after the install is complete. Amazon takes a 10% to 20% cut of the final price, which is collected from the service provider.
If a consumer doesn’t select a service provider when buying a complex product, Amazon follows up with a post-purchase email alerting the shopper that additional services are available, says Erika Takeuchi, senior product marketing manager for Amazon Home Services.
“We’ve seen an uptick in the number of sales we have for home improvement and home goods—products where consumers may not have made or put off the purchase initially” because of the post-purchase service element required, she says. The number of consumers buying home services has grown 20% month over month, the company says.
Andy Baxley, owner of Already Assembled Inc., a provider of assembly services in the Baltimore area for more than 10 years and among the first vendors to join the home services program, says he hears similar comments from clients when he’s putting together a product they ordered on Amazon and hired him to put together. “I’ve been told a number of times by customers, ‘I wanted this desk but [didn’t buy it because] I knew I had to put it together, and I didn’t want to put it together,’” he says. Offering install services is what convinced them to buy, he says.
Baxley says about 75% of the jobs he’s been doing lately have come through customers hiring him through Amazon. The most popular jobs he’s hired for are to put together exercise equipment and furniture. While consumers can buy services a la carte through Amazon for goods purchased anywhere, Baxley says about 95% of the Amazon-referred jobs he gets are to put together products consumers purchased on the site.
Baxley says there are a few other vendors in his area that do similar work through Home Services. He says his wife coordinates most of his jobs and actively manages the prices Amazon displays for his services, sometimes lowering a rate by a penny or two to beat a competitor and ensure consumers select Already Assembled for the job.
Takeuchi says Amazon “maintains a very high bar” and thoroughly vets all local service vendors it allows to appear on the site. That process includes reference and criminal background checks and that the firm maintains all necessary insurance or trade licenses. Amazon also conducts ongoing performance checks. Consumers can rate vendors after a job is complete, and shoppers on Amazon.com see the star rating and can read comments from other customers.
Demographically, Amazon says Home Services nets greater interest from working families, people who have recently moved and empty nesters. The markets where consumers use Home Services the most are New York, Los Angeles and Washington, D.C.

UK FOREIGN INVESTMENTS DEFICITS

March 31, 2016 2:34 pm

Current account deficit hits postwar high

Emily Cadman

The Edith Maersk, the largest ship ever on the Thames, at 397-metre-long, 56-metre-wide, with a draught of 16 metres and which can carry up to 15,500 standard containers, is unloaded whilst docked at the UKÕs new deepwater container port, DP World London Gateway, near Stanford le Hope Essex. PRESS ASSOCIATION Photo. Picture date: Sunday October 19, 2014. Photo credit should read: Sean Dempsey/PA Wire

©PA

Britain’s current account deficit has hit a new postwar high, underlining the country’s reliance on foreign capital.

In the final quarter of 2015, the UK borrowed £33bn — or 7 per cent of gross domestic product — from the rest of the world.

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Chancellor George Osborne said the latest figures showed the danger of economic uncertainty and that “now is precisely not the time to put our economic security at risk by leaving the EU.”

However, analysts are less worried than they might be because the worsening of the deficit was mostly caused by a drop in earnings on overseas investments.
The Office for National Statistics estimates that just under 80 per cent of the deterioration since 2011 has been caused by falling receipts from UK investments abroad and the majority of this was attributable to the UK’s largest 25 multinational companies.
Apart from during the 2008 financial crisis period, the UK has historically earned substantially more on its foreign investments than it has paid out. But since 2011, earnings have fallen dramatically.
While there is no consensus as to why this has happened, the ONS suggests two main reasons.
First, the UK’s biggest companies have invested heavily in oil and other commodities and returns have been hit by falls in prices.
Second, key destinations for UK investment, including many Eurozone economies, have been struggling to grow, and this has also depressed earnings.
The annual figures for the UK current account are also bleak, with the deficit rising to 5.3 per cent of GDP.
Both the annual and quarterly figures are the worst on record since comparable data began after the second world war.
The data overshadowed news that the UK’s economic recovery was a little stronger than thought, with GDP growing by 0.6 per cent in the fourth quarter.
Mark Carney, the Bank of England governor, has previously warned that Britain relies on the “kindness of strangers” to finance its current account and that the referendum on EU membership on June 23 was the biggest domestic risk to the economy.
Chris Hare, economist at Investec, said the deficit was “eye-watering” and Howard Archer, economist at IHS Global Insight, said the data were “truly horrible”.

The UK economy at a glance

The FT’s one-stop overview of the key UK economic data, including GDP, inflation, unemployment, the major business surveys, the public finances and twin deficits and of course house prices.

But Mr Hare added that he was relatively confident about the UK’s ability to attract investment from abroad.

Rupert Seggins, senior economist at the Royal Bank of Scotland, has said that the problem with the current account as an indicator of economic trouble in the UK is that “it is always crying wolf”.

He added that the average maturity of UK government debt is 16 years, meaning it has a cushion against any sharp rises in how much it has to pay to borrow and it has a good credit history.
So far, international investors have been happy to lend to the UK economy. The concern is that any loss of confidence — particularly because of worries about Brexit — would lead them to demand higher returns on money lent to the UK, which would be a drag on sterling and UK assets.
John Wraith, head of UK rates strategy at UBS, said that so far the mood in the capital markets is “pretty sanguine” and investors “do not seem to be showing any real signs of aversion”, having bought an average of £2bn a month in gilts over the past year.

But he said that the picture was notably different in the currency markets, where sterling has fallen sharply since the start of the year.

“There has been a clear drop in the willingness of overseas investors to keep diversifying into UK assets at the previous pace. We do think this is linked to Brexit, and we do think it is likely to continue right up to the vote itself,” he said.
If there was a vote to leave, he suggested that sterling could need to fall close to parity with the euro to move the current account deficit towards more “manageable” levels in an uncertain environment.

LOGISTICS HUB--THIS COULD PIT CUBA VS JAMAICA

Business

Logistics Executives See Shipping Hub Potential in Cuba

U.S. businesses touring freight sites find modern facilities along with decaying infrastructure and “endless” possibilities for American exports

ENLARGE

Cuba’s Port of Mariel has already drawn investment interest from port operators and developers around the world. Photo: Bloomberg News

Loretta Chao

The Wall Street Journal

CANCEL

March 29, 2016 2:51 p.m. ET

1 COMMENTS

U.S. logistics executives who toured Cuba’s shipping facilities say the island nation has potential to be a key shipping hub for the region, but that heavy bureaucracy and poor infrastructure pose significant hurdles.
Officials from 18 logistics companies completed a trip to Cuba last Friday—coinciding with President Barack Obama’s historic visit to the island—in which they watched operations at the Port of Mariel and met with prospective partners, including ProCuba, an organization promoting foreign trade and investment in the country.
They said Cuba may be an ideal location for cross-docking, or re-sorting and distributing, cargo from large “post-panamax” ships to smaller vessels headed for U.S. ports. That could include ships from Asia with cargo bound for East Coast ports that aren't equipped to handle the bigger ships, which can carry 14,000 or more twenty-foot-equivalent units, or TEUs, a standard measure for container cargo.
“Their location is absolutely perfect to be a hub…to push freight into northern Mexico, or all along the southern coast, and even up to our ports that don’t have that deep draft on the eastern side,” said Sue Spero, president of transportation brokerage firm Carrier Services of Tennessee Inc. Being able to get goods to market “a few days quicker is huge for us,” she said.

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The logistics companies, in a trip organized by the Transportation Intermediaries Association, or TIA, joined other U.S. businesses that met with Cuban officials as the president visited the island nation.
The Obama administration viewed Mr. Obama’s trip as a critical market in its moves to normalize trade relations with Cuba after a 50-year trade embargo. Although the White House and Havana have opened the door to more travel, tourism and some business dealings, important limitations on trade in goods and services remain in place and would have to be removed by the U.S. Congress.
Members of the logistics delegation, organized by the Transportation Intermediaries Association, or TIA, said agreements such as a multimillion-dollar deal under way for Starwood Hotels and Resorts Worldwide Inc. to manage hotels in Havana will start a flow of goods across the Straits of Florida for the hospitality business.

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American companies also are looking to export commodities, frozen foods and consumer goods to Cuba, said Robert Kemp, chief executive of Pennsylvania-based DRT Transportation LLC. “You’re talking about building a society for 12 million people that hasn’t been touched for 40 years,” he said. From construction materials to the consumer market, the possibilities are “endless,” Mr. Kemp said.
Mr. Kemp said it was clear from visits to cargo sites that Cuba needs big improvement in its transportation infrastructure. Local operators told the group that the easiest way to move freight 700 miles from one end of the island to the other is by sea, not truck or rail, he said. “The fact that it’s easier to put it on a boat tells all about the infrastructure that you need to know,” he said.
There are bureaucratic hurdles as well. Logistics companies must strike partnerships with local operators which are state-run, though a free-trade zone at the port allows investors to operate warehousing with 100% ownership, executives said.

‘They don’t want to see Starbucks in the barrios of Havana.’
—Sue Spero, Carrier Services of Tennessee.

Meanwhile, officials told the group they are keen on “preventing their cultural identity from being compromised,” said Ms. Spero, of Carrier Services. “They don’t want to see Starbucks in the barrios of Havana.”
Still, the group found the Mariel port to have modern facilities, including the ability to handle refrigerated shipments and weigh truck entering or leaving the container terminal.
The port, which is under development by Singapore-based terminal operator PSA International, has attracted additional investment from container ship operator CMA CGM SA, which said last year it would build a logistics hub including warehousing.
Write to Loretta Chao at loretta.chao@wsj.com