The World Economic Forum (WEO) released its annual Global Competitiveness Report earlier this week. The 565 page PDF file is available for download here, if you dare to read it cover-to-cover. It evaluates the competitiveness of 144 economies across the globe. The index outlines 12 pillars of competitiveness, categorized into three stages of economic development. It came to my attention while viewing this framework, that it can be a useful tool for evaluating one’s own supply chain and logistics operations. I will write a blog post in the near future discussing the framework the WEO used in its index and explain how I see its relevance and usefulness in evaluating logistics operations.
But for now, on to this week’s news:
- Railroads Dash to Transport Surge in U.S. Oil
- Inside Google’s Secret Drone-Delivery Program
- Apple’s iWatch may be DELAYED over sapphire glass supply problems
- Omnitracs to Acquire XRS Corporation
- Fresh EU sanctions on Russia threaten Baltic shipping market
An article on Fox Business discusses the rise of crude-by-rail volumes in the US, resulting from the increase in US production driven by the shale oil boom. The report states that rail transportation of petroleum for the first 7 months of 2014 is up 9 percent from last year. The report also states that US production hit 8.5 million barrels per day in June, the highest level since 1986. The article delves into aspects of the boom in North Dakota. Here is a quote from the article:
Drillers in North Dakota, which trails only Texas in oil production, rely heavily on railroads to transport oil. According to the North Dakota Pipeline Authority, between 60% and 70% of the more than one million barrels per day produced in the state was shipped to refineries by rail throughout the first half of 2014.
However, there have been negative side effects from the increased demand for rail transportation of crude. The New York Times published an article last week on the backlog of grain shipments in North Dakota resulting from the rail capacity shortage due to oil shipment demand squeezing out capacity for agriculture transports. The farmers stated that the backlog is only going to get worse as a record crop of wheat and soybeans is being harvested in the region.
The Atlantic published a detailed article on Google’s drone program (Yes Google, not Amazon). The article discusses the development, key players in the process, and the recent test flights in Australia. The program is known as Project Wing and has been ongoing at Google X for the last couple years. The drone’s design is known as a “tail sitter,” a hybrid plane and helicopter that takes off vertically then rotates horizontally for flight. Here is a link to a brief video of a recent test flight.
An equity analyst named Ming-Chi Kuo who is following Apple is apparently predicting that Apple’s launch and distribution of its anticipated iwatch will likely be disrupted by a shortage of sapphire glass. Sapphire glass is substantially more scratch resistant than the current screen glass used in iPhones. However, sapphire glass is also reportedly planned for use in the iphone 6. GT Advanced Technologies is noted as Apple’s manufacturing partner for the special glass.
OmniTracs, acquired from Qualcomm at end of 2013 by private equity firm Vista Equity Partners, has announced its intent to purchase XRS Corporation. XRS Corporation, formerly known as Xata, is a fleet telematics provider. OmniTracs also recently acquired Roadnet Technologies, a provider of fleet management software. When Vista Equity acquired OmniTracs, I was curious about the company’s plans for the business unit, as its sales had been declining for a number of years. Given the recent acquisitions, it appears that the strategy for the new OmniTracs organization is one which delivers value from offering a broad footprint of solutions focused on the management of private fleets. It will be interesting to see what steps they take next in this journey.
The Journal of Commerce discusses a pending decision by the EU 28 on potential new measures to take against Russia for its intervention in the Ukranian conflict. The article notes that the EU measures are unlikely to target industries or trade that will directly affect Baltic shipping. However, the Russian response is likely to trigger a reduction in trade flows. The report notes a number of trade routes with declining volumes, including those of DFDS between the Baltics and Russia, and container traffic between Hamburg and Russia.
And with that have a great weekend! This week’s video, The Rock Island Line by Johnny Cash.