Recently the WSJ reported that Boeing is running out of space to store unfinished 737s as it waits for critical parts. Actually both Boeing and Airbus are experiencing production delays because of critical tier 1 suppliers that are just having a difficult time in dealing with the stress on their supply chains.
The story below by Paul Eisenstein describes the impacts to automakers about the much-reviewed changes being discussed and negotiated for NAFTA. The current view in protectionist circles about trade agreements generally are classic debates that are framed by too many as one about winners and losers. The temptation to do that is alluring but the interlocking issues and short-term and long-term results require far more complex analytics. As is the case with most complicated things, the debate is generally confused by ignoring basic facts and quite different assumptions and priorities.
It is obvious and becoming more obvious that too much facility or geographic concentration exposes global supply chains to massive risk - the kind of risk that simply cannot be ignored any longer. Surely, there are some technological and cost efficiency challenges to break-up some production hubs - but there are also huge insurance benefits to assure continuous and uninterrupted production for global market products. Combined with evolving trade agreement dynamics, there may be great opportunity for anew production investment in other areas including in Latin America North America and Europe, especially at and around well-connected logistics hubs.
In an article published on August 6th, William Cassidy from the JOC wrote an article: ELD Surprise: Costing Supply Chain Time, Not US Truckers, where he outlined some of the impacts from the newly enforced Electronic Logging Data (ELD) requirements that have been put on the trucking industry in the US. While to some this may be a reference to some arcane trucking regulation, these regulations create some fundamental changes to the internal logistics system of the largest economy in the world. For inland markets that are situated in locations that are just beyond the HoS limits for a one-day dray to the nearest load-center seaport like Albuquerque, Salt Lake City or Indianapolis, this will have important implications to competitiveness for international shipments. For international supply chains that rely on inbound or outbound cargo movements, they are faced with higher shipping trucking expenses. These dynamics may suggest that with proper intermodal access, alternatives via rail may even be more attractive.
GLDPartners will be in Toronto in October to participate at the Multimodal Americas/TIACA conference to lead two expert conference sessions that will explore the latest market trends and investment opportunities around inland ports and air cargo.
Last year Amazon was granted a patent for an on-demand apparel manufacturing system that is designed to produce apparel products after orders are placed and aggregated; in other words machines only start stitching once an order has been placed. This system means that the only inventory that the manufacturer holds is the fabric or raw material rather than higher-end finished products which will lower the value of the inventory. This frees-up cash and avoids the problem of "unfashionableness" that occurs so frequently in the apparel industry. It looks like Amazon is looking to disrupt the garment industry by aiming for a new standard- sell it, make it, ship it.
In the May 24th edition of Loadstar, Sam Whelan writes about the ways in which the e-commerce boom is creating operational challenges for the larger airlines. Everyone is aware that air cargo development in 2017 far exceeded the expectations for the industry and that E-commerce demand for air freight led that charge. E-commerce demand shows no signs of letting up, but just as e-commerce has brought disruption to the retail industry, it is also creating disruption in the air cargo industry. There is no doubt that e-commerce has been a boom to a struggling air cargo industry but with these opportunities have come challenges, challenges that some air carriers just don’t think makes good business sense.
GLDPartners is pleased to announce that Bob Gollnik has joined our team as a Senior Project Manager. Bob will work on complex transportation, supply chain and infrastructure development advisory and delivery projects. Bob will advise businesses and public agencies on strategic transportation planning and policy, implementation and operations issues. One of Bob’s primary roles will be the development of the Mid-California International Trade District which is a $3B quadrimodal investment complex on a 2000 acre property.
A common misconception in the United States is that the majority of semiconductor manufacturing is done overseas, as is the case with other electronics products. However, this is not true and the fact is that US semiconductor companies do the majority of their manufacturing in the United States and semiconductors are one of America’s top manufactured exports, behind only aircraft and automobiles.
It's interesting to watch in various settings around the world how unfolding automotive technologies are undergoing testing and market roll-out. In the two articles below, two electric road tests are explained, one in Europe and one in North America. These tests involve support for advanced propulsion technology, specifically electric drive technologies. In the Sweden example, government has created a test environment for a short-span electric roadway near Stockholm’s Arlanda Airport. The test links the Airport to a nearby logistics site. In the other example, Siemans and a major California electric utility company have joined to develop an electric roadway to test a heavy truck route at the largest seaport in North America, the Port of Los Angeles.