The Friday Report: August 9th, 2019

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

Autonomous Trucks Carry Human Drivers in First Step Towards Fully Autonomous Trucking

Texas-based startup, Kodiak Robotics has started hauling freight commercially using autonomous trucks.  Focused on “the middle mile”, the movement of freight from the on-ramp to the off-ramp of the highway or interstate.  Kodiak Robotics has eight trucks in its fleet which use an autonomous system to control the vehicle while on the highway and a human driver off the highway or interstate.   Loads are retrieved from a distribution center with a human driver in control for the first and last segments of transit.  The plan is to eliminate human drivers entirely once the technology has matured and has a proven track record.

Eliminating truck drivers means that autonomous trucking companies will be able to transport freight faster as they will not be compelled to follow the US Hours of Service rules which limit the number of hours that a human driver can control the truck.

New Storage Technologies Fuel Changes in Energy Storage

The promise of energy independence for residential and businesses has been challenging to fulfill largely due to the need to store energy affordably.  Storage technologies have been evolving, however, as battery storage technologies is nearly reaching a tipping point, similar to that experienced by the enormous adoption of solar power in previous years.

The mainstream adoption of electric vehicles is the next phase in the evolution of the global energy sector.  With the initial expansion of lower cost renewal energy and innovation of battery technologies, the stage is now set for the next step in the transformation of energy.  Industry experts from Bloomberg have estimated that nearly half the world’s electricity will be provided by solar and wind by 2050.

Auto manufacturers across the globe have been working on the challenges and are becoming incorporated into the electricity ecosystem.  Some automakers are developing and producing energy-storage products, while others are working to supply homes with renewable energy via a retail power subsidiary.

Others in the energy sector are preparing for the upcoming energy transformation.  Oil producers are investing in storage and are interested in becoming electrical power companies.  Energy companies are investing in mass battery storage systems.

Fear of New Tariffs Increase Warehouse Inventory Levels

Continued fears of more tariffs has continued to cause a flood of imported goods to flow into the United States, filling warehouses. Shipping goods from China ahead of the imposition of tariffs, goods are warehoused for weeks or months until they need to be rushed through customs to save money on imports.  The next deadline for the imposition of tariffs is September 1st, an additional 10 percent on nearly $300 billion of Chinese imports which previously have not been included.

Combined with the persistent expansion of e-commerce sales, this has fueled warehouse capacity constraints well inland of ports.  Industry reports that sellers have been accumulating inventory at the highest rate in six years, 7.9 percent annually. 

Warehouses need to clear the facilities to take on newly arriving goods.  Now in the American back-to-school buying season,  the Chinese have imposed tariffs on $110 billion of U.S. goods and is considering qualitative measures  that would impact American businesses that are operating in China.

The supply chain is showing signs of trouble, with empty shipping containers awaiting cargo to transport back to Asia, extensive wait times for containers to arrive at railways and trucks from the shore.  The decrease in shipping arrivals from China and rising number of ships arriving from Vietnam demonstrate the impact of U.S. tariffs.

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