Logistics Lowdown - September 2016

 

Logistics Lowdown

Brought to you by AGWorld.

 

We give you the skinny in the big bad world of logistics. Read this curated collection of articles every month to learn about the latest developments and most pressing problems facing our fast-changing industry.

 

1.

THE COLLAPSE HEARD ‘ROUND THE WORLD

There was a lot of chaos on the seas this month. The seventh largest container line, Hanjin Shipping, decided to file for bankruptcy after being turned down for additional funding from its main creditor. Ports around the world started to refuse Hanjin ships because they were not sure the shipping line could pay; authorities seized several at the request of creditors. As Hanjin and its parent company scrambled to come up with the funds to get their ships docked and unloaded, $14 billion worth of cargo was left in limbo, including $38 million from Samsung alone. (Not a great month for Samsung!) Read the article on the AGWorld blog.

 

2.

HANJIN’S DEMISE: THE OMENS

The Korean shipping line’s bankruptcy is not a shock for industry watchers. There have been signs pointing the way for years. Omen #1: The container shipping industry lost $15 billion during the global financial crisis and has never truly recovered from the loss. Omen #2: China’s economy has slowed and shows no sign of recuperating back to previous levels of double-digit growth. Omen #3: Global ship orders rose 100% in 2015 despite overcapacity in the market. What was the final nail in the coffin for Hanjin? View the timeline.

 

3.

MAERSK SPLITS UNDER MARKET PRESSURES

Amid record low freight rates and oil prices, Danish company A.P. Møller-Maersk has been forced to split into two separate divisions focused on transport and logistics (which will include Maersk Line) and energy. With profits slipping due to the lagging growth of global trade and overcapacity in the shipping industry, the reorganization will free up capital for Maersk Line to grow market share by making acquisitions."There is a wave of consolidation in container shipping," said CEO Soren Skou. "This is an inflection point in the industry.” Read the article.

 

4.

ELECTRONIC LOGGING DEVICES: UNCONSTITUTIONAL?

By 2017, the federal government will require all truck drivers to log their hours using an electronic logging device, which is meant to ensure that drivers are not on the road for so long that it becomes dangerous. Truckers are very divided over the issue. It’s supported by the American Trucking Association but strongly opposed by the Owner Operator Independent Driver Association, which is now suing the government. Are ELDs a form of illegal search and seizure and a violation of drivers’ fourth amendment rights? Read the article.

 

5.

THE WAREHOUSE WORKERS OF THE NEAR FUTURE

When a new generation of workers is no longer interested in warehouse work, robots may be a better, cheaper, and cooler alternative. Not too long ago, it was beyond the capacities of a robot to do even simple tasks such as picking products off a shelf and assembling odd-shaped containers on a pallet. Today, one reclusive billionaire has sold Target on fully autonomous robots that can pick and stack goods untethered at up to 25 miles an hour using sensors and a wireless network. Hello, brave new world. Read the article.

 

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