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This Week in Logistics News (May 28 – June 3)

By June 3, 2022Uncategorized

One of the issues with electric cars thus far has been the life of the battery. And this doesn’t just apply to how long can a vehicle go on a single charge; it also applies to the actual life of a battery, as a new battery can cost upwards of $25,000. Researchers at Tesla have developed a new design for electric vehicle batteries that could last up to 100 years before needing to be replaced. Existing technology for EV batteries can only create cells that last up to 20 years or around 200,000 miles before their capacity drops too low to power a vehicle. However, by creating a new nickel-based battery that can last five times as long, Tesla and the researchers working on the new project hope to make EVs even more lucrative compared to gas guzzlers. To put all of this in perspective, the new design could potentially last for 1,000,000 miles. This will certainly be an interesting area to watch, especially as electric vehicles become more commonplace and apply to the global supply chain.  And now on this week’s logistics news.

How Shanghai’s lockdown is dampening Port of Oakland volumes
Shipping companies added capacity, but now containers are stuck in port
US challenges Canada’s dairy policies
Robot orders surge again in Q1
Cargo losses escalate as thieves target cars, electronics
Legislation introduced to improve food safety and hold FDA accountable
The astronomical price of diesel is making everything more expensive
Unilever offers drone delivery for direct-to-consumer ice cream orders

The Port of Oakland reported cargo in April dropped 7 percent compared to the same period a year ago due to factory and port shutdowns in China. Shanghai’s lockdown has delayed US-bound shipments, causing a “ripple effect” on ocean carrier scheduling and are wreaking “havoc on ocean carrier scheduling,” according to a statement from the port. Volume from Asia has slowed, as have the number of vessels coming to the port, according to the release. “During the peak of port congestion in 2021, as many as 30 ships were waiting to enter an Oakland berth. Today containerships number from one to a few waiting to do business at the Port of Oakland.” With the reduction in cargo coming out of Shanghai, some carriers aren’t able to fully load a vessel. “They’re looking at it and they’re saying, is cargo available? If it is, I’ll load if not, then then I can’t load,” Nathan Strang, Flexport senior trade lane manager of ocean operations said.

Speaking of port issues, ship operators are trying to add millions of new containers to address a severe capacity crunch, but the boxes are stuck on liners and at ports as shipping moves into its busiest period. Shipping’s peak season usually starts at the end of June when importers begin ordering products for the back-to-school and holiday seasons. This year, orders went out in mid-May as companies tried to head off the product shortages that plagued them last year. The early start has added to the challenges of getting the supply chain unclogged. Ship brokers and consultants estimate about 12 percent of the world’s boxships are stuck outside congested ports for weeks longer than normal, and inland distribution—especially in the US—is still hampered by a lack of trains, truck drivers and limited warehousing space. Ship operators and brokers say that at the start of 2022, there were around 50.5 million available containers, eight million more than before the pandemic.

Under enforcement action in the United States-Mexico-Canada agreement, the US Trade Representative announced May 25 the United States for the second time is requesting dispute settlement consultations with Canada over the handling of its dairy tariff-rate quota allocation measures, which deny allocation access to eligible applicants, including retailers, food service operators, and other types of importers, and impose new conditions on the allocation and use of the TRQs. The dairy industry says USTR should be ready to continue with additional actions to hold Canada accountable to its USMCA obligations if the consultations fail. The United States is also challenging Canada’s failure to fully allocate its annual dairy TRQs; Canada is instead parceling out a few months’ quota at a time. Through these measures, Canada undermines the market access that it agreed to provide in the USMCA, USTR says in a statement.

Robots are continuing to become key components in the logistics space. Under pressure from a turbulent market for interest rates, inflation, and labor, North American companies started the year by purchasing the most robots ever in a single quarter, with 11,595 robots sold at a value of $646 million, a new report shows. Those first quarter statistics represent growth of 28 percent in units sold and 43 percent in revenue over the same quarter last year, according to the Association for Advancing Automation (A3). And, in comparison to the previous high-water marks, which were set just three months ago in the fourth quarter of 2021, they show growth of 7 percent and 25 percent respectively. The future robotics market looks strong worldwide as many sectors seek answers to labor shortages, the Interact Analysis report said. A strong uptake in collaborative robot usage within the medical, education, logistics, and catering fields will likely drive that market to grow to three times its 2021 size by 2026.

Cargo theft costs are rising in the US as higher-value goods such as vehicles and electronics are targeted, and as inflation pushes up the cost of goods. Companies can take steps to reduce the risk of theft, including installing tracking technology and hard-locking devices, using teams of drivers, and avoiding theft hotspots, experts say. The Memorial Day weekend typically sees an uptick in cargo theft, with an average from 2017 to 2021 of 29 events per year over the holiday weekend. Estimated cargo theft losses in the United States and Canada jumped to $19 million in the first quarter of this year, a 73 percent increase over the prior-year period even as the number of reported thefts remained unchanged at 319, according to the latest data from Jersey City, New Jersey-based Verisk Analytics Inc.’s CargoNet. The average loss value in the first quarter was $232,000, a 68 percent increase over the same period last year and more than double the average loss value reported in the first quarter of 2020, CargoNet said in an analysis released May 19.

A bill introduced in the US Senate is calling for stricter regulation of “Generally Recognized as Safe” substances and the creation of a new FDA office to assess the safety of chemicals in America’s food supply. Senator Edward J. Markey, D-MA, introduced the Ensuring Safe and Toxic-Free Foods Act, comprehensive legislation that would ensure the Department of Health and Human Services (HHS) fulfills its responsibility to promote the health and well-being of American families by directing the Food and Drug Administration to strengthen the Substances Generally Recognized as Safe (GRAS) Rule, which exempts companies from seeking pre-market approval for some food additives. Markey s legislation would also direct the HHS Secretary to create an Office of Food Chemical Safety Reassessment within the FDA’s Center for Food Safety and Applied Nutrition, which would be charged with reassessing whether existing substances such as bisphenols and PFAS are safe for American families to consume. Additional co-sponsors of the Ensuring Safe and Toxic-Free Foods Act include Senators Richard Blumenthal, D-CN, and Elizabeth Warren D-MA.

Diesel prices have skyrocketed faster than gasoline, which has itself hit record levels. They’re rising so fast because of the same factors that have sent oil prices up this year. The US’s ban on the import of Russian oil after the invasion of Ukraine has put a squeeze on diesel. The US also keeps lower inventories of diesel and has been exporting more of the fuel to Europe in recent months to help reduce the continent’s reliance on Russian fuel. Diesel’s spiraling price has also contributed to US inflation, which reached a 40-year high this year. After all, trucks move 70 percent of all freight in the US from transporting goods on land to those that come off a cargo ship or a train. Most trucking companies pass on increased fuel costs to their customers through fuel surcharges.

Last month, I wrote that Unilever is partnering with store-hailing app Robomart to trial a fleet of mobile ice cream shops powered by Robomart’s technology under Unilever’s virtual ice cream brand, The Ice Cream Shop. Now, Unilever is also now offering ice cream delivery via drone. The company is partnering with end-to-end drone delivery company Flytrex to make Ice Cream Shop drone deliveries across all of Flytrex’s US locations, including Holly Springs, Fayetteville, and Raeford, NC, as well as Granbury, TX. According to Unilever, drone orders from The Ice Cream Shop will be delivered to front and back yards of local residents with a promised flight time of less than three minutes. Customers can place orders for drone deliveries of ice cream using the Flytrex app. The app will provide customers with real-time updates along the delivery route until the package is lowered safely by wire into their yard.

That’s all for this week. Enjoy the weekend and the song of the week, Battery by Metallica.

The post This Week in Logistics News (May 28 – June 3) appeared first on Logistics Viewpoints.

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