While coverage of COP26 has been all but scarce this past week, this week’s Friday Five has the supply chain angle to Glasgow’s buzzing talks, plus, a port congestion update and an innovation win for Walmart. Let’s begin, shall we?
This week the Clydebank Declaration for shipping corridors was signed by nations such as the U.S., UK, Germany, Netherlands, Japan and Australia at COP26, the major international climate summit. The declaration outlines a framework to create zero-emission ocean shipping corridors. A total of 19 signatories agreed to support the establishment of greener shipping corridors. This is done by incentivizing zero-emissions ships — eventually requiring only such ships to travel long-distance routes, highlighting major hubs and major trade routes in combination with land-based infrastructure.
President Joe Biden is set to finally sign a $550 billion infrastructure package dubbed “the Big Deal” after months of contention regarding its execution from both sides of the aisle. Infrastructure building stemming from the bill may last a decade and includes new spending on highways, bridges and other transport measures. Companies and groups within freight and the supply chain praised the House for passing the bill. “From farmers to truckers, the millions of hard-working people who make this country great won today,” said representatives from the American Trucking Association (ATA).
Despite the U.S. President’s best efforts to extend schedules and add pressure to sitting containers, the California backlog kept breaking new records this week with 111 container ships now clogging up America’s busiest ports. “The issue isn’t about a lack of desire to move boxes, but a lack of physical space,” Slync’s own Corey Bertsch said, commenting to Insider. Prior to the COVID-19 pandemic, the highest record was 17 ships.
Shippers look to air freight over congested U.S. ports as the holiday stretch closes in. Demand for air cargo rose 3% from pre-pandemic levels in October. With ocean freight rates over seven times higher than they were pre-pandemic, the gap to air transport has decreased — from 12.5 more expensive pre-pandemic to just three times more expensive in September. “...Air cargo benefits from speed, which helps meet peak season demand,” representatives from the International Air Transport Association (IATA) said.
Companies such as Colgate-Palmolive and Crocs have been willing to accept the higher price for air amid congestion and factory closures as a result of COVID-19. The momentum for air freight could be short-lived, however, as container spot rates also took a dent this week following an easing of premium fees on Asia exports.
At a distribution center in Bentonville, Arkansas, Walmart is showcasing some serious supply chain innovation with a pair of trucks regularly pulling up outside the center with orders from a warehouse seven miles away — without drivers.
Autonomous technology company Gatik, who operate the rigs, have opted to focus on specific routes like the Bentonville route which it drove for over two years before going fully autonomous. Walmart has acquired an undisclosed stake in Cruise LLC, the autonomous driving segment of General Motors Co., in addition to working with Gatik and robotic giants Nuro, Waymo as well as Argo AI, with continued testing and new commercial routes scheduled later this year and for 2022.
Thanks for stopping by! In case you missed it, be sure to check out last week’s logistics news roundup which had us crooning like Otis Redding while watching it rain cold, hard money in #logtech. Also, if you need a better way to navigate peak season, ask us about our award-winning Logistics Orchestration® platform.