Above the Fold: Supply Chain Logistics News (May 10, 2024)

I was a baby once, a long time ago. 

I was born with my umbilical cord wrapped around my neck, making it hard for me to take my first breath, but when I finally inhaled and let out a cry, I was given to my mother to comfort me.

I don’t remember that day, but I do remember another time, maybe a year or two later. I’m wearing a diaper and nothing else, sitting atop the small round kitchen table in our cramped 1970s apartment. My mom is helping me sit up while I colored, crayon clutched in my little hand, on a piece of paper.

It’s my earliest memory.

I took another big breath before I called my mother this past January to tell her I was diagnosed with thyroid cancer. “You’re going to be okay, it’s fine, don’t worry too much, I hear it’s very treatable, oh, you know who else had thyroid cancer, Sofia Vergara, you know who she is, that pretty actress on that TV show, and look at her, she’s been fine for years, and…”

She went on like that for a minute or more, one long run on sentence, not taking a breath, until I finally interrupted her: “Mami, it’s okay, I’m okay, I’m not too worried about it.”

I comforted her, she comforted me. 

I now have a scar where my umbilical cord was wrapped around

once, a long time ago, when I was a baby

before I took my first breath, before I take my last one

I don’t remember.

Wishing my mom, wife, sister, and all the great moms a wonderful Mother’s Day this coming Sunday.

Moving on, here’s the supply chain and logistics news that caught my attention this week:

Electric Trucks: Reality Bites

There’s hype and then there’s reality. And when it comes to battery-powered electric trucks, reality bites.

This week Ryder released “a quantitative analysis of the potential economic impacts of converting commercial diesel vehicles to electric vehicles (EV) in today’s market.” Here’s an excerpt from the press release:

Based on representative network loads and routes from Ryder’s dedicated fleet operations in today’s market and other factors, the data shows the annual total cost to transport (TCT) by EV versus diesel is estimated to increase across the board – ranging from up to 5% for a light-duty transit van to as much as 114% for a heavy-duty tractor (depending on the geographic area) [emphasis mine]. And, for a mixed fleet of 25 light-, medium- and heavy-duty vehicles, the analysis shows an increased TCT of up to 67% for an all-electric fleet.

“While Ryder is actively deploying EVs and charging infrastructure where it makes sense for customers today, we are not seeing significant adoption of this technology,” says Robert Sanchez, chairman and CEO of Ryder. “For many of our customers, the business case for converting to EV technology just isn’t there yet, given the limitations of the technology and lack of sufficient charging infrastructure. With regulations continuing to evolve, we wanted to better understand the potential impacts to businesses and consumers if companies were required to transition to EV in today’s market.”

In a Wall Street Journal article reporting on these findings, Paul Berger writes:

Battery-electric trucks cost about three times as much to purchase as a diesel rig. There are federal and state programs to help offset the purchase costs, but operating costs and other issues present big hurdles. 

Truckers say battery-electric truck operations are too difficult to set up and too expensive and inefficient to run. It can take years to install on-site charging facilities for trucks that can travel less than half as far as diesel rigs between refueling and that require at least several hours to recharge. 

“Quite frankly, demand [for battery-powered electric trucks] has not been as strong as what we would like,” said Rakesh Aneja, head of eMobility at Daimler Truck North America, which released its Freightliner eCascadia battery-electric semi truck in 2022.

None of this should be surprising. Industry leaders have been talking about these challenges for years, yet politicians continue to force the issue (see California’s electric truck mandates). 

The same is true on the consumer side. Lots of folks support sustainability efforts, until they have to pay for it. In another Wall Street Journal article this week titled, “Households Wince at the Rising Price of Going Green,” the authors write:

Consumers are starting to pay for the energy transition, and they aren’t happy about it.

Governments that were among the earliest in the world to adopt climate legislation tried to take the sting out of the transition by motivating consumers with subsidies. Now, however, the same capitals are cash-strapped and many are passing the bill to the consumer. Subsidies are being scaled back, taxes tied to carbon emissions are being phased in, and rules requiring expensive renovations are starting to bite.  

Many consumers, including those who broadly support the energy transition, are unwilling to pay up.

Just like free delivery ain’t really free, neither is going green. One way or another, we’re all stuck with the bill.

(For more commentary on electric trucks, see “Electric Freight Trucks: Not Happening Anytime Soon for Long-Haul Moves” and “A Strategy for Charging Electric Freight Trucks.”)

And with that, have a meaningful weekend! 

Song of the Week: “Say Something” by James