Sorry for the delay in receiving this post today. I went for a bike ride this morning with my oldest son, who is going back to college tomorrow.
Sometimes you have to hit the pause button on work and enjoy life.
Without further delay, here is the supply chain and logistics news that caught my attention this week:
- China’s worst heatwave in 60 years is forcing factories to close (CNN)
- Clogged Ports Put Fall, Holiday Shipments in Doubt (WSJ – sub. req’d)
- U.S. Shipping Backups Shift to East Coast and Gulf Coast Ports (WSJ – sub. req’d)
- The U.S. supply chain is now facing two trade hurdles (CNBC)
- Amazon is raising seller fees for the holidays to manage through surging inflation (CNBC)
- Walmart’s last-mile delivery service, Walmart GoLocal, tops 1M deliveries in year one (TechCrunch)
- Freight Demand Is Moderating Heading Toward the Fourth Quarter (WSJ – sub. req’d)
- Railroads back deal calling for 24% raises but workers wary (AP)
- Transporeon acquires Tracks, expanding its leadership role for sustainability in freight technology
- Kinaxis Acquires MPO to Connect Supply Chain Planning and Real-Time Execution for Perfect Orders
- E2open’s Quarterly Technology Release Helps Companies Improve Performance in an Unpredictable Global Economy
- GEODIS to acquire Need It Now Delivers to significantly strengthen its U.S. offerings
- Tesla and Nikola Big Rigs Race for Up to $40,000 US Incentives (Bloomberg)
- Cass Transportation Index Report July 2022
- Cost of trucking grows to record high (The Trucker)
- P&G faces reckoning over Charmin, Bounty supply chain (Reuters)
- Coronavirus lockdown at China’s export showroom Yiwu clouds Christmas order outlook (South China Morning Post)
Imports & Exports: More of the Same
When it comes to ocean shipments, it’s more of the same: clogged ports around the world continue to create risk and uncertainty. As Costas Paris reports in the Wall Street Journal this week, “Port congestion continues to haunt global trade, spreading fresh fears among exporters and importers over whether massive amounts of cargo will be delivered on time for the busy, year-end shopping season.”
The threat of labor strikes in Germany and the UK are part of the problem. As quoted in a CNBC article, Andreas Braun, Europe, Middle East, and Africa ocean product director of Crane Worldwide Logistics, states:
“If no compromise will be made [between the trade union verdi and the Central Association of German Seaport Operators], we can expect further strikes which will, even more, worsen the already stressed situation in the Northern Ports. Congestion, vessel schedule, and intermodal operations are already a mess and further strikes will just contribute to it. We will not see a change back to a normal situation before Q1 2023.”
In the UK, as I highlighted last week and Lori Ann LaRocco points out in her CNBC article, “beginning on August 21st, 1,900 dock workers at the Port of Felixstowe, the U.K.’s largest container port, are planning to strike after talks failed on their ongoing pay dispute. The strike would last until August 29th. Approximately 40 percent of all containers that arrive and depart from the United Kingdom are processed at Felixstowe.”
And if Covid isn’t shutting down factories in China, it’s the heat. “China’s Sichuan province has ordered all factories to shut down for six days to ease a power shortage in the region as a scorching heat wave sweeps across the country,” reports Laura He in CNN. “Sichuan is a key manufacturing location for the semiconductor and solar panel industries and the power rationing will hit factories belonging to some of the world’s biggest electronics companies, including Apple supplier Foxconn and Intel.”
In short, it was just another normal week in global trade news.
Transporeon & Kinaxis Make Acquisitions
Back in August 2019, when we asked members of our Indago supply chain research community if sustainability was a defined and measured objective within their supply chain organizations, almost 60% of the respondents said Yes. That percentage will likely increase in the years ahead, especially if (when) it becomes mandatory due to new laws or regulations.
In the United States, for example, the Securities and Exchange Commission (SEC) proposed new rules in March 2022 that would require “a registrant to disclose information about its direct greenhouse gas (GHG) emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2). In addition, a registrant would be required to disclose GHG emissions from upstream and downstream activities in its value chain (Scope 3), if material or if the registrant has set a GHG emissions target or goal that includes Scope 3 emissions.”
Of course, global companies, especially those with operations in Europe, already face similar disclosure and reporting requirements (see “US Follows EU’s Lead on ESG Reporting Standards” by Eric J. Belfi et al. from the law firm Labaton Sucharow).
Therefore, it’s not surprising that supply chain and logistics technology companies have been adding sustainability-related capabilities in recent years. Transporeon (a Talking Logistics sponsor) is a good example. In 2021, the company established a partnership with EcoTransIT, “a long-standing expert in the calculation of greenhouse gas emissions.” Earlier this year, Transporeon launched its Carbon Visibility Solution for companies to measure and report on CO2 emissions. And this week, the company announced its acquisition of Tracks, “a Berlin-based start-up with the mission to decarbonise the transport industry.” Here are some excerpts from the press release:
Founded in 2018, Tracks is a carbon visibility tool providing data solutions to monitor and manage carbon emissions across all transport modes. To do this, the company uses AI-based analytics and prediction tools to enable shippers, carriers and logistics service providers to collect and optimize emissions data at source.
With Transporeon’s acquisition of Tracks coupled with its existing partnership with EcoTransIT, its customers will benefit from an enhanced offering that allows them to set realistic CO2 reduction targets, for themselves as well as their suppliers and customers, and define improvements against those targets.
We will certainly see more innovation and M&A in this segment of the market in the years ahead.
The other big acquisition this week was Kinaxis acquiring MPO (a Talking Logistics sponsor) for about $45 million, “consisting of approximately 75 percent cash and 25 percent equity consideration.” Here are some details from the press release:
The combination of Kinaxis Rapid Response® planning and MPO’s Multi Party Orchestration execution will uniquely deliver a complete real-time picture of every order across the lifecycle – from planned commitment through ultimate delivery. Instead of treating these areas as separated teams, planners will be able to react to disruptions in transportation and dynamically respond, and logistics teams will be able to incorporate the strategic impacts of their execution activities.
“MPO is to supply chain execution what Kinaxis is to supply chain planning – revolutionizing the space by concurrently combining control and visibility of supply chain execution steps across business networks, into a unified cloud platform with one codebase, single user-interface and real-time optimization in a way no other vendor in the market does,” said Martin Verwijmeren CEO, who co-founded MPO with Paul van Dongen, CTO.
I haven’t been briefed yet on their go-forward plans and strategy, but based on the press release comments, a big part of the value proposition is breaking down the silos between supply chain planning and execution. Achieving it from a technology standpoint is one thing, and you can make the case that it’s a more realistic and achievable goal today than in the past thanks to the cloud, APIs, and other tech innovations. Breaking down the functional silos from a people, process, and metrics perspective, however, is still a big challenge.
And with that, have a happy weekend!
Song of the Week: “Space Man” by Sam Ryder