The Friday Five: Winter weather snarls U.S. logistics
Winter storms deal another blow to U.S. supply chains [Journal of Commerce]
It was cold just about everywhere in the United States this past week. Scratch that -- actually, it was freezing. Those low temperatures, paired with record-breaking winter storms wreaked havoc on both infrastructure and logistics operations across large portions of the US.
Winter storm Uri brought ice and snow as far south as Texas, leaving millions without power and causing Houston container terminals at Barbours Court and Bayport to halt operations, the JOC reports. Meanwhile, snow caused trucking bottlenecks at the US-Mexico border, FedEx and UPS issued service advisories, and Union Pacific Railroad went so far as to close its intermodal network for 72 hours starting on Feb. 16.
The slowdown comes at a challenging time for logistics, as major ports are still working through congestion related to a booming import business and ongoing COVID-19 precautions.
As businesses begin to dig out from the snow and restore operations, the JOC indicates they can expect a near-term increase in spot truckload rates and some ongoing delays across logistics networks.
E-commerce giant JD.com applies to spin-off supply chain arm [The Loadstar]
China’s largest online retailer is set to spin-off its logistics business in an upcoming stock offering on the Hong Kong Stock Exchange. The offering will see JD Logistics gain new access to capital as it continues to grow its operations as an independent company.
With more than 800 warehouses comprising over 20 million square feet under management, JD Logistics has built a considerable footprint in China, according to The Loadstar. Along with its 240,000 employees, JD Logistics also prides itself on the use of technology and robotics throughout its operations.
“Supply chain technology is the bedrock of our operations and differentiates us from our competitors,” the company said. South China Morning Post reports that JD Logistics plans to invest some of the new capital in technologies “such as 5G, AI, big data, cloud computing and Internet of Things.”
The stock listing is anticipated to raise as much as $5 billion for the logistics company and a valuation of as much as $40 billion.
Container shortage gives commodity prices extra boost [The Wall Street Journal]
What happens when moving a product becomes more expensive than the value of the product itself? The cost goes up for everything.
The Wall Street Journal reports that the ongoing shortage of 40-foot containers is taking a toll on commodities shippers as they try to keep up with demand for raw materials and everyday consumables like coffee and sugar. The resulting hike in cost and lead time is causing headaches for all involved.
Because margins for commodities are often so slim, the ability to move high volumes of material consistently and to the right markets is critical. The current crunch on container availability and capacity is likely to have a downstream effect on the end customer as well.
“We are paying quite a bit more to secure regular container space,” Mark Hansen, CEO of merchant commodity trader Concord Resources Ltd. “Ultimately, it’s an inflationary cost. You’re going to pass it along.”
Maersk boxship loses 260 containers overboard during blackout [The Maritime Executive]
Maybe containers wouldn’t be so scarce if there weren’t so many of them sitting on the ocean floor.
Caught in heavy weather off the coast of Japan, the 13,100 TEU Maersk Eindhoven ran into engine troubles and lost 260 containers after experiencing a severe roll, The Maritime Executive reports. All crew were safe and accounted for after the incident, but the Los Angeles-bound ship had to reverse course after the incident in search of repairs.
The Maersk Eindhoven is only the latest in a trend only the Little Mermaid could love. It’s the second incident in about a month for AP Moeller Maersk, which lost about 750 containers in January, and at least the sixth time ocean carriers have reported the loss of containers since last November. More containers have been lost at sea in the last five months than are typically lost in a whole year.
Catch Slync.io at TPM 21: Global logistics’ data dilemma [JOC Events]
By the time 2025 rolls around, some 463 exabytes of data will be created globally each and every day. Meanwhile, most enterprises are still struggling just to keep up with the data that’s being created in their own supply chains today.
It’s easy to get lost thinking about what digital technologies will become available down the road, but imperative to consider new ways to use supply chain data right now. If you’re one of the many logistics and IT leaders trying to figure out how to turn messy data into efficient processes and execution, be sure to attend Global Logistics’ Data Dilemma, Thursday, Feb. 25 during TPM. Registered attendees of the annual maritime shipping conference can gain new perspective on how to streamline workflows and improve employee efficiency in the session, which features Slync.io CEO Chris Kirchner.
And while you’re at the conference, make sure to visit the Slync.io virtual experience and register to win a round of golf with Olympic Gold Medalist, PGA & European Tour professional, Justin Rose.
Stay warm, stay safe, and have a happy Friday! Don’t forget to check out last week’s news and come back next week for the following Friday Five logistics news roundup!
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