There are many sayings that tout experiential learning as superior to learning from a book. Well I must agree. I can tell you that there are many stories about consequential supply chain disruptions that have made an impact on me. But none of these made an impact on me comparable to running out of baby formula, baby antacids, or one of the many other items required to keep my infant twins happy. The lungs on these kids can go from 0-to-60 in seconds if they don’t get that bottle, mixed properly, at the right temperature, at the right time. There is a demand sensing story there as well (is that stirring from gas or impending hunger cries), but I’ll leave that for another day… Now on to this week’s logistics news:
- IBM and Maersk Ready Blockchain Technology
- New autonomous trucking tech startup looking at taking drivers out of trucks
- Rise of Amazon leaves even more retailers in intensive care
- Oil imports lift U.S. trade deficit to near five-year high
- EU Court Reverses Block of UPS-TNT Merger
- Private equity groups (continue to) circle Singapore logistics company
Maersk and IBM are venturing together into the world of digital ledgers and cryptocurrency. The use of the technology is aimed at improving visibility and enhancing security and transparency. The technology achieves these goals through varying levels of permissions allowed to each participant in the supply chain transaction. The system is being designed to help reduce fraud and errors, and digitize the paper trail associated with millions of containers being shipped worldwide. IBM and Maersk plan to collaborate with a network of shippers, freight forwarders, carriers, and customs authorities on this new global trade digitization solution, which is expected to go into production later this year.
Starsky is the new kid on the block. Not Starsky from Starsky and Hutch, but Starsky Robotics, an autonomous trucking start-up from the San Francisco area. The company is developing a retrofit system that includes software, front and side-facing radar, and camera systems. The system is intended to allow the “driver” to remotely control the truck from an office. The company recently tested the system on a 140 mile trip with a driver in the cab of the truck, but it operated autonomously for 85 percent of the trip.
The rapid change in the retail landscape driven by e-commerce, and Amazon in particular, is a topic that we speak about often on LogisticsViewpoints.com. And I believe that it is justified given the impact it is having on retailers, employees, and supply chain partners. According to CNN Money, A Moody’s Investor Service report, the number of retailers with distressed corporate debt has tripled since the great recession. The report lists 19 retails and clothing companies including Sears Holdings, J. Crew, and a number of niche retailers, deep discount dollar stores, and more.
The US trade deficit was pushed front and center during the US Presidential election. I actually learned in economics that a trade deficit wasn’t necessarily a negative, or a positive for that matter. But it is often seen as an unsustainable negative by many people. Well, the US trade deficit jumped to what was nearly a five year high in January, propelled by an increase in oil imports, cell phones and automobiles. I do not think that the trade deficit is necessarily a negative, as it must be offset by a capital account surplus (did I remember that correctly?). Nevertheless, it will be interesting to hear what the political and business communities have to say about the trend.
The European General Court reversed the European Commission’s 2013 decision to block the merger of UPS and TNT, based on its analysis that the merger would hinder small package delivery competition in 15 EU states. UPS sued to annul the Commission’s decision and the court upheld that the commission failed to communicate relevant information to UPS regarding the economic analysis it utilized to arrive at its evaluation of the merger’s likely effect on competition. The commission was directed to pay UPS’ court fees. That’s negligible reimbursement, in my opinion, for a large scale failure in governance. But of course, FedEx gets the last laugh as it acquired TNT after UPS’ denial and prior to this court decision.
Global Logistics Properties (GLP), one of the world’s largest warehouse space owners, continues to be pursued as an acquisition candidate by a number of large private investment firms. Names of existing and potential suitors include BNP Paribas, Warburg-Pincus, Blackstone, and others. JP Morgan is reported to be GLP’s advisor in the process of evaluating its options. GLP is considered a valuable acquisition candidate partially due to its position to benefit from the growth of e-commerce in China. GLP owns and operates a $38 billion portfolio of properties consisting of 577 million square feet.
That’s all for this week. Have a great weekend!