With more competition arising among the market, it has become extremely challenging for small and midsized businesses to efficiently manage their supply chains.
There were many new and exciting transportation updates in the shipping industry last month. Check out some of the top stories and transportation updates in November!
Transportation Updates: November 2019
Walmart Canada launches world’s largest blockchain application
The retail giant has recently announced its plan to set up a huge freight and payment network, powered by blockchain technology. Walmart Canada collaborated with DLT Labs to develop the application. The industry blockchain solution will process payments, store data, verify transactions, and track freight shipments. The final launch of a web portal that will also be available as the mobile application is planned on February 1, 2020. Read more here.
Amazon will open grocery stores without human cashiers
Amazon is extending its retail initiatives by preparing a network of supermarkets and grocery stores called Amazon Go. The retail mogul plans to make the stores cashiers and take out checkout lines. The project is currently being tested in the facility in the Seattle Capitol neighborhood. Amazon is also planning to sell the license after successfully launching the initiative. Read more here.
The consequences of a trade war could cost the U.S. economy $186 billion
The recent study on the implementation and impact of Trump’s import tariffs reveals the risks these changes can cost each state nationwide. Turns out, the two years of a trade war with China can threaten nearly 1.5 million US jobs and $186 billion of the country’s economic activity. Read more here.
UPS expects a record amount of returns during the holiday season
Every year the holiday season gets busier, and this year is expected to set the record for return goods, according to UPS estimates. Postal service expects returns to rise 26% up compared to last year, which will represent 1.9 million packages on January, 2. Before Christmas day, the carrier plans to handle 1.6 million returns per day. Read more here.
There were many new and exciting updates in the shipping industry last month. Check out some of the top stories and transportation updates in September!
Transportation updates in September 2019
Amazon to start a logistics business
The e-commerce mogul has announced it’s a plan to start a business in the logistics industry. Amazon wants to develop its own delivery fleet by renting aircrafts and launching an employee support program. The company is offering $10,000 to the workers so they can start their shipping business. “I think Amazon has stated that they’re now a competitor to the transport industry. FedEx has clearly viewed them as an increasing competitor following their recent moves,” – said Ken Hoexter, a research analyst at Bank of America. Read more here.
Holiday season begins: The U.S. ports admit record freight volumes
As the holiday season rolls out, the largest ports are seeing an increase in inbound freight since August. The Port of Oakland states a 3.1 percent increase for imports and 1 percent for export freight. The Port of Los Angeles Executive Director, Gene Seroka, commented, “The final months of 2018 ended with an extraordinary influx of imports to beat expected tariffs on China-origin goods. We don’t expect to see that kind of volume in the months ahead. We need a negotiated settlement of the U.S.-China trade war to restore global trade stability.” Read more here.
IMO 2020: Experts expect oil price volatility and an increase in freight costs
Effective January 1, 2020, the International Maritime Organization’s low-sulfur mandate will become valid. Logistics experts believe it can lead to significant disruptions in the industry, including freight cost increase and price volatility. “The industry is still in a financial tailspin since the financial crisis, but the technology is ready and mandates being enforced by each country will make this a reality,” said Jigar Shah, co-founder, and president of Generate Capital. Read more here.
There were many new and exciting updates in the shipping industry last month. Check out some of the top stories and transportation updates in August!
China & U.S. trade war: President Trump raises tariffs
On August 23, President Trump responded to Beijing’s retaliation with raising tariffs for China. Now, taxes on $250 billion of imports will rise from 25 percent to 30 percent starting October 1. Also, effective September 1, the duties for $300 billion in Chinese imports will increase to 15 percent instead of 10 percent. To read more about the tariffs, click here.
Truckers respond to the new HOS regulations
After the latest tweak in the hours-of-service rules, truckers are suggesting changes for more flexibility. Currently, truck drivers have a ten-hour period for rest with a suggested eight hours of rest and two hours of non-driving time. Also, they have a mandatory 30-minute break. In particular, many drivers wanted to split the 30-minute break into two smaller intervals, and be more flexible with the way they use their time off. To read more, click here.
Truck tonnage to increase by 25.6 percent by 2030
The new report by the American Trucking Association stated truck tonnage to increase by 25.6 percent over the next decade. Responsively, the revenue is expected to go 54 percent up and reach $1.6 trillion. Chris Spear, ATA President, spoke up on the importance of adjusting to market growth: “Freight Forecast clearly lays out why meeting challenges like infrastructure and workforce development are so critical to our industry’s success”. To read more, click here.
Truck wait times at border are increasing
Truck wait times at the United States – Mexico border are beginning to increase. Industry professionals say the longer wait times are a result of slow border inspection routines and truck drivers waiting to load and unload freight at docks and intermodal facilities. To read more about the border congestion, click here.
There were many new and exciting updates in the shipping industry last month. Check out some of the top stories and transportation updates in July!
FMCSA Offers a New Rule on CDL Home State Requirement
The Federal Motor Carrier Safety Administration introduces a new rule that will allow truck drivers to get a commercial driver’s license (CDL) outside of their state of residence. The new proposal was created to reverse the current requirement to register in their birthplace state. This way, FMCSA tries to simplify the application procedure for drivers entering the market. Read more here.
New ATA Report: Driver Shortage is Going to Increase Over the Next Decade
A new report by the American Trucking Association shed light on the current state of truck driver workforce market and highlighted forecasts of shortage growth over the next ten years. The study indicates the industry will need 1.1 million truck drivers hired throughout the next decade, which equals 25 percent of new hires. Read more here.
eBay to Present New ‘Managed Delivery’ Service by 2020
The retail giant eBay announced its plan to launch a new delivery system for high-volume shippers. The main concept suggests that large sellers will be able to store, pack and deliver their products within the network of specifically located facilities and vendors. Managed Delivery is estimated to be live in 2020 and reduce delivery times all over the country. Read more here.
Tensions sharpen in Strait of Hormuz: Two British Ships Seized
Strait of Hormuz, an extremely important economical area between the Persian Gulf and Oman Gulf with $1.2 billion worth oil transported each day is in a tense situation. In particular, Iran is accused of seizing two British tankers and attacking a few more ships, as well as shutting down the U.S. drone. Read more here.
There were many new and exciting transportation updates the transportation and shipping industry last month. Check out some of the top stories that made headlines during April!
Amazon has bought Canvas robotic systems
Famous for the use of different robotic devices from Google, Toyota and Kiva systems, Amazon acquires Canvas systems. Founded just in 2015, Canvas has already demonstrated robust innovation with its focus on cart fulfillment devices. “We are inspired by Canvas Technology’s innovations, and share a common vision for a future where people work alongside robotics to further improve safety and the workplace experience,” the Amazon spokesperson said. To read more about Canvas systems acquisition, click here.
DOT assigned $900 billion for the transportation grant program
Recently, the United States Department of Transportation (DOT) has launched a Notice of Funding Opportunity (NOFO) for $900 million in elective grant capital through the BUILD program (Better Utilizing Investments to Leverage Development). “These BUILD Transportation grants will provide needed infrastructure investment to better connect rural and urban communities around our nation,” announced the U.S. Secretary of Transportation Elaine L. Chao. To read more about the DOT grant program, click here.
Walmart starts using more than 4,000 robots
In their efforts to give employees more time to serve customers live, Walmart expands
its robotic device network. The giant retailer has announced to add more than 4 thousands robots to handle the operations. Mostly, devices will be used to check product availability, correct pricing, and supplies location. To read more about Walmart’s new robots, click here.
Companies support Earth Day
On Monday, April 22, the world celebrated its largest environmental movement – Earth Day. Many logistics and retail companies have joined the initiative to push sustainable shipping and production trend forward. For example, Walmart partnered with HSBC to develop a supply chain sustainability program for the suppliers. To read more about the Walmart green initiative, click here.
March was packed full of logistics-related news and transportation updates. We’ve summed up the most important events and trends that took place during the month:
Sober Steering Aims to Add Sobriety Tests to Steering Wheels
A Canadian company, Sober Steering, makes alcohol-detecting devices attached to steering wheels. It is striving to expand usage to North American trucking companies. For now, the use of devices spreads on steering wheels of school buses in Canada. It has successfully saved the lives of many from drivers under the influence. Read more about Sober Steering technology.
FMCSA will review HOS regulations and ELD rules
The Federal Motor Carrier Safety Administration (FMCSA) head Ray Martinez stated that the organization will review HOS rules soon with possible future changes. The information was announced at the annual Truckload Carriers Association meeting. The changes will mainly touch on HOS compliance rigidity, including the 100 air-mile “short haul” exemption, the mandatory 30-minute rest break, and more. Click here to read more about the possible HOS rules changes.
Boeing to stop moving freight on 737 MAX 8 aircraft
The company paused the operation and production of more than 4,500 Boeing 737 MAX 8 planes. The main reason for a decision is the second lethal crash of this model since October. Experts estimate these actions will cost Boeing huge amounts of money, considering the needed space to park planes and pay airline companies for a disruption. Read more about the Boeing pause here.
Ocean carriers will need to increase surcharges by 35 – 40 percent to offset IMO 2020 costs
According to a recent study, ocean carriers will have to increase fuel surcharges in 2019 to maintain margins and deal with the low-sulfur regulations costs from the International Maritime Organization (IMO) in 2020. To stay financially stable, carriers on Asia-Europe ways would need to raise surcharges by 40%, while ones routing through Asia-Americas lanes would increase fees by 33%. Read more about ocean carriers surcharge growth here.
Discover new innovations that will dramatically change and impact supply chain and logistics in the nearest future!
The discussion of the North American Free Trade Agreement (NAFTA) has been popular the month of January with officials from the US, Mexico, and Canada ending round 6 talks in Montreal, Quebec on the 29th. Ever since President Trump made the announcement that NAFTA was the “worst trade deal the US has ever signed” during his 2016 election race, tensions have been high in North America because of uncertainty.
It was early 2018 when the Trump administration began to insist how trade relations with Canada and Mexico are going to be re-calibrated to favor the US’s interests. Since then, we have heard discussions of making changes, and discussions threatening to withdraw from NAFTA if Trump doesn’t get the results he wants.
Last month was one of the most important talks to date for the health of NAFTA. The round was a week-long discussion that came to an end on the 29th. The three countries each had their own vision of the trade agreement, and each was optimistic about the outcome. Chrystia Freeland, the Canadian Foreign Minister, believes that the three countries can come out with a “win-win-win” after a revamped NAFTA.
One of the most controversial topics during the meetings has been the automotive industry, with Ford and GM with facilities in the US, Mexico, and Canada. The US is demanding to have a higher proportion of parts made in the US to fall under NAFTA’s tariff-free rules, with 50% US content of North American-built cars traded under NAFTA. The initial proposal was denied by Freeland during the meeting. Canada, in return, made a few proposals including changing the method of how a car’s value is calculated, autonomous vehicle development, and the use of North American Steel to be used in manufacturing. And likewise, the US Trade Representative Robert Lighthizer denied those efforts which could have made a breakthrough for the automotive topic.
An additional concern brought up by the US. is that the automakers are taking jobs away from the US. According to Ford, their company only uses outside plants for smaller production vehicles and continue to use their plants in the US while maintaining jobs instead of taking them away. So, following the original goal of NAFTA to bring jobs and trade benefits to all three countries, Ford and GM with plants across North America, are only helping to maintain jobs. However, Lighthizer said that the officials are only just beginning to discuss these key areas along with others, and they are moving at a slow pace. They hope to further analyze the impacts automakers have on NAFTA in further meetings.
Additional meetings are planned to continue into 2018 with the next meeting scheduled in Mexico City this month. Mexico’s Economy Minister Ildefonso Guajardo is predicting that topics revolving around telecoms and digital commerce will come to an agreement during this meeting. But time is limited as there is still a lot of progress to be made and Mexico is holding a presidential election in the summer. If talks continue past March, there is a possibility that the talks could be delayed until after the elections and after their new president takes office… meaning no progress until after December 2018.
There is hope that NAFTA makes it through 2018 without a scratch, but Trump was hoping to have things wrapped up by the end of 2017. Now sights are set for the end of 2018 with some predictions of the talks moving into 2019. Both officials from Mexico and Canada are optimistic that NAFTA talks will come to a sound agreement this year either way. Once the talks are concluded in Mexico City, Washington will be the next destination where the US hopes to finalize the agreement with Mexico and Canada.
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Earlier last month, President Trump announced that he was going to unveil his long-awaited infrastructure plan for the nation sometime this January. The proposal is a 70-page memo, that is on track to be submitted to Congress next month, will be the stepping stone for the creation of the legislation. During his 2016 election campaign, Trump vowed to invest $1 trillion to rebuild America’s crumbling infrastructure. This could mean major changes within the expanding transportation industry.
Just this Monday, Trump jumpstarted the plan and met with leaders within the transportation industry. The meeting was originally planned to occur sometime toward the beginning of January. Among the meeting was Elaine Chao, Transportation Secretary, and Bill Shuster, House Transportation and Infrastructure Committee Chairman. This meeting signifies Trump’s seriousness about the plan to rebuild the nation’s infrastructure. Shuster is the chair for the committee that oversees the legislation for infrastructure, so their talks would mean a possible act come January.
“The president had a productive meeting with Rep. Shuster, during which they discussed the president’s bold plan for rebuilding America’s infrastructure, which has fallen into an unacceptable condition due to decades of misguided policies,” from a statement by the White House: “He looks forward to working with Rep. Shuster and his colleagues in Congress to turn this vision into legislation next year.” (Washington Examiner, 2018)
What could this infrastructure plan mean for the nation? It would focus on rebuilding the country’s roads and bridges which need attention to help the expansion of transportation capacity. It would also assist with the redevelopment of tunnels, airports and railways. This plan would not only help the growth and movement of the country, but it would also assist with job growth, another of Trump’s vows during his campaign time.
Once the GOP passes their tax reform bill, the White House said they expect to pursue the infrastructure plan shortly afterwards. Republicans are to have the bill completed on turned over to the president by Christmas.
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