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Dairy Container Costs "Going Crazy"
The skyrocketing cost of shipping containers is hitting the margins of Victorian pulse, grain, dairy and meat processors and exporters
30 Jul 2021
Andrew Miller
CONTAINER PAIN: Wimpak, Minyip, general manager James French says margins are being squeezed by the price of containers.
The skyrocketing cost of shipping containers is hitting the margins of Victorian pulse, grain, dairy and meat processors and exporters.
Thomas Elder Markets analyst Andrew Whitelaw said containers (boxes) were used to export pulses, grains, meat, and wool from Victoria.
"The box market has gone crazy this year," Mr. Whitelaw said.
Rates were at their highest since 2001, with the cost of hiring a 40-foot container to export products to India now sitting at $4000, (A$7700).
That compared with the first week in June 2019 when the rate was US$1300.
The top five agricultural containerized export destinations are China, Japan, the USA, Vietnam, and South Korea.
READ MORE: Rising port costs being passed back to the farmer
Port of Melbourne figures show wheat accounts for 10 percent of all agricultural exports, with hay, chaff and fodder coming in a close second.
Other cereals, barley, lentils, and chickpeas comprise nearly 20 percent of all exports.
Dried milk and processed dairy products make up more than 12pc of exports.
Huge demand
Mr. Whitelaw said part of the problem was the huge demand for containers, from Chinese manufacturers.
"Everyone seems to have much more disposable income, and most of the western world isn't able to spend that money on leisure or travel activities," Mr Whitelaw said.
"This has resulted in huge volumes and gadgets and gizmos shipped out of China."
Sea freight broker Anchor Logistics director Bob Brittles said a combination of factors had resulted in supply and demand pressures.
The blockage of the Suez Canal, when the Ever Given ran aground earlier this month, had a massive effect.
"When the Ever Given was freed, 350 ships followed her through and dumped about 350,000 containers in Europe and just after that there were unloading delays in China.
"Those delays held up 650,000 containers."
He said the Australian market was serviced by about 12 major shipping lines.
"They have been influenced by the coronavirus situation and closures of various ports, over the last year and a half."
That had resulted in congestion and delays in unloading in many south-east Asian ports, which was contributing to the container shortages.
"The containers are in the wrong place, the ships are in the wrong place," Mr Brittles said.
Rising prices
Grain cleaning and packing service Wimpak, Minyip, general manager James French said container prices to ship to most overseas ports had risen dramatically.
"The Bangladesh rates are very similar to India and the shipping lines are making a move (on prices) every four to six weeks," Mr. French said.
He said grower pricing might have to reflect the freight cost.
"Normally we are putting work on, six to eight weeks out, but we are struggling to do that, knowing what our freight rates are going to be," he said.
"It makes us more reluctant to buy more product when we don't know what the price will be at the other end."
READ MORE: Food-grade container shortages hitting Victorian exporters hard
Burra Foods exports most of its dairy products and chief executive Stewart Carson said there was a direct container cost, as well as timing and availability.
"You might have a vessel booked to leave on Friday, then you're told the vessel won't be available until Tuesday or Wednesday," Mr. Carson said.
"What do you do with that container? In some cases, you have to put it on power, which costs you money."
Mr. Carson said the company carried the cost or sought to recoup it from the market.
"Everyone is paying a competitive milk price, you can't say sorry I'll pay 10 cents less because the container price has gone up," Mr. Carson said.
Companies could not pass the cost back to the farmer, which was only right.
"I think that's great, it gives an assurance to the farmer," he said.
He said Burra was in the same position as all other processors.
Southern Grain Storage director Campbell Brumby said his company was fortunate that his company had finished its export program before the price increases hit.
"I was speaking to a colleague who was paying $1750 for a box to a particular destination, and was now looking at $4250 if they can get the container," he said.
He put the price increase down to the state government's lease of the Port of Melbourne.
"We've been doing containers for about 10 years and when we first started, charges were negligible," he said.
"Since the lease was sold to DP World, the rates have gone through the roof - we just have to pay them and the market absorbs the cost.
"As long as all our competitors and all the people we are trying to trade with are working on the same cost basis, the market tends to absorb it.
"Whether its pulses or cereals, the market will be the market."
Crisis Looming In Trucking And Shipping; Here Is What’s At Stake for Horticulture
Spear called on the Senate panel to advance a bipartisan surface transportation infrastructure bill this year, focused on roads and bridges, that’s responsibly funded with a modernized user-fee system
By American Trucking Associations
May 12, 2021
American Trucking Associations President and CEO Chris Spear told the Senate Commerce, Science & Transportation Committee this week that growing pressures on the U.S. supply chain are fast approaching crisis levels, and that immediate action from Congress is needed to ensure our economic recovery is not derailed by further disruptions.
In testimony before the Subcommittee on Surface Transportation, during a hearing titled “Freight Mobility: Strengthening America’s Supply Chains and Competitiveness,” Spear outlined the trucking industry’s key priorities on infrastructure, workforce, safety, and the environment, detailing specific legislative steps lawmakers must take to ensure the integrity and longevity of the nation’s supply lines as the economy climbs out of the COVID-19 crisis.
“Investments in our supply chain are desperately needed, including the roads and bridges that connect our ports, rail yards, and airports to the National Highway System. Do that, and you will witness measurable efficiencies, including gains in productivity and safety, job growth, and sustainable employment, and historic reductions in carbon emissions,” Spear told members of the committee in his opening remarks.
The trucking industry moves more than 72% of the nation’s freight tonnage, and over the next decade, trucks will be tasked with moving 2.4 billion more tons of freight than they do today. Breakdowns in surface transportation infrastructure, as well as a severe and widening truck driver and diesel technician shortage, threaten the industry’s ability to keep goods moving safely and on time.
Freight bottlenecks and congestion on the National Highway System already cost the trucking industry an annual 1.2 billion hours of lost productivity, which is equivalent to more than 425,000 drivers sitting idle for an entire year — adding $75 billion to the cost of freight transportation. In addition, the industry currently faces a shortfall of nearly 61,000 drivers and will need to hire roughly 1.1 million new drivers over the next decade to keep pace with the economy’s increased freight demands.
Spear called on the Senate panel to advance a bipartisan surface transportation infrastructure bill this year, focused on roads and bridges, that’s responsibly funded with a modernized user-fee system. He also called on lawmakers to pass the DRIVE-Safe Act, legislation to remedy the driver shortage by promoting opportunity and enhancing safety training for emerging members of the trucking workforce. The bipartisan bill is backed by more than 117 organizations representing all levels of the U.S. supply chain.
A transcript of his opening remarks is available here.
Nature Fresh Farms Advances In Sustainable Transportation Through The SmartWay Program
Nature Fresh Farms pledges to reduce freight transportation-related emissions by becoming a member of SmartWay
Leamington, ON (January 15, 2020) – Nature Fresh Farms pledges to reduce freight transportation-related emissions by becoming a member of SmartWay.
Over the past year, Nature Fresh Farms joined the SmartWay Transport Partnership to further its sustainable development and continue to lead in its environmental initiatives. SmartWay is administered in Canada by NRCan and is free to those interested in becoming members, aiming to help both shippers and carriers move goods efficiently, by maximizing load capacity and keeping fuel costs and environmental impact at a minimum.
SmartWay is an internationally recognized program that encourages its members to be more aware of their carbon footprint by helping them track fuel consumption and improve their overall performance. Through their membership, Nature Fresh Farms can use the program to measure the environmental impact of their freight supply and use recommendations from SmartWay to improve and modify their transportation and operation strategies. With Nature Fresh Farms’ commitment to reducing emissions, their goal is to have at least 80% of their carrier base SmartWay certified by 2023.
“It has always been important for Nature Fresh Farms to recognize and understand our carbon footprint in every area of our operations,” shared Leigh Ann Breault, Director of Logistics. “Making the necessary improvements to our freight supply chain, using the recommendations provided from SmartWay, will only help reinforce our position as an industry leader in sustainability.”
With environmental performance becoming increasingly important as a business metric, more companies are becoming aware of the benefits of being a part of programs such as this. Having over 3,600 North American companies signed on to the SmartWay partnership, Nature Fresh Farms membership demonstrates their continued environmental leadership and corporate responsibility.
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Continuously expanding, Nature Fresh Farms has become one of the largest independent, vertically integrated greenhouse vegetable farms in North America. As a year-round grower with farms in Leamington, ON, Delta, OH, and Mexico, and with their Distribution Centers established in Leamington, Delta, and Laredo, TX, Nature Fresh Farms prides itself on consistently delivering exceptional flavor and quality to key retailers throughout North America, while continuing to innovate and introduce more viable and sustainable growing and packaging solutions.
SOURCE: Nature Fresh Farms | info@naturefresh.ca T: 519 326 1111 | www.naturefresh.ca
SINGAPORE: Port CEO Wants To Stop Food Rotting On Ships
The food industry accounts for almost a quarter of global carbon emissions. Yet 30% of production is wasted because it doesn’t arrive in an edible form — caused by “logistical failures” that can be addressed using information technology, said Tan Chong Meng, the chief executive officer of PSA International Group in Singapore
Port CEO Wants To Stop Food Rotting On Ships
October 28, 2020
One of the largest container port operators is calling on the shipping industry to tackle a growing yet often overlooked major environmental problem: spoiled food from hauling produce around the world.
The food industry accounts for almost a quarter of global carbon emissions. Yet 30% of production is wasted because it doesn’t arrive in an edible form — caused by “logistical failures” that can be addressed using information technology, said Tan Chong Meng, the chief executive officer of PSA International Group in Singapore.
Reducing that wastage through “digitalization” to move food more efficiently is “a huge opportunity” for the freight industry, which emits about 800 million tons of carbon dioxide, Tan told the Singapore International Energy Week conference.
The shipping companies that move 90% of the world’s goods including food have pledged to decarbonize in the next 30 years by curbing fossil-fuel emissions. That commitment focuses on the pollution caused by fuel, but doesn’t include the indirect emissions from food waste. About 1.3 billion tons of global food production is lost before reaching consumers’ plates every year, according to the Food and Agriculture Organization of the United Nations.
Supply disruptions caused by the coronavirus pandemic have put the spotlight on food security, prompting calls for reduced wastage to boost self-sufficiency. In August, China’s President Xi Jinping introduced a “Clean Plates Campaign” to tackle the “shocking and distressing” problem of food waste.
In Singapore, which relies on imports for more than 90% of its food and increased wastage by 20% over the past decade, President Halimah Yacob urged citizens to help overcome the problem.
Some 10% of developed nations’ greenhouse gas emissions are created by producing food that’s never eaten, according to the UN Environment Programme. About 14% of the world’s food is lost after harvesting and before reaching the retail level, and good infrastructure and efficient trade logistics are key to preventing food losses, according to the UN Food and Agriculture Organization.
Lead photo: Photo: Bloomberg
VIDEO: Wallenius Marine Develops World's Largest Wind-Powered Vessel To Slash Shipping Emissions
Developed in collaboration with Sweden's KTH Royal Institute of Technology and naval research institute SSPA, the Oceanbird project hopes to mitigate the environmental impact of maritime freight transport, which accounts for all but 10 percent of trade in the whole world
Swedish shipping company Wallenius Marine is developing a ship called Oceanbird, which could transport 7,000 cars and trucks across the Atlantic propelled only by the wind.
The concept, which is essentially an outsized sailboat, would be twice as high as the largest comparable vessel due to the five 80-meter-tall sails that protrude from its hull.
These purportedly would make it the world's largest wind-powered vessel, capable of traveling across the ocean to the US at a speed of 10 knots and with a total journey time of 12 days.
Wallenius Marine claims that Oceanbird will be the world's largest wind-powered vessel
According to Wallenius Marine, this is only four days longer than a carrier powered by fossil fuel while emitting 90 percent less CO2 in the process.
Developed in collaboration with Sweden's KTH Royal Institute of Technology and naval research institute SSPA, the Oceanbird project hopes to mitigate the environmental impact of maritime freight transport, which accounts for all but 10 percent of trade in the whole world.
In 2018 alone, the shipping industry emitted 937 million tonnes of CO2, which is more than all of Germany. If it were a country, the sector would be the sixth-largest emitter in the world, just behind Japan.
Related story
Rolls-Royce touts remote-controlled cargo ship as "future of the maritime industry"
"We only have one planet and it's important that we take responsibility and ensure that this planet will be a good place to live for future generations," said Wallenius Marine's COO Per Tunell.
"Shipping plays a very important role in today's society but it's also a large contributor to harmful emissions and that cannot continue, so we need to act."
In order to try and rival the speed of an engine-powered ship, the Oceanbird would make use of wingsails rather than traditional fabric sails. These resemble solid fins made of steel and various composites, much like the wings of an airplane.
The ship is propelled forwards by five wingsails
"Airplane wings are asymmetrical in profile because they should only produce a lift upwards," explained the ship's naval architect Carl-Johan Söder.
"But our wings are symmetrical because we should be able to produce lift regardless of if you have wind coming in from the port tack [left side] or the starboard tack [right side of the ship]. The wings can rotate 360 degrees so you can optimize the angle depending on the wind direction relative to the ship."
They are also telescopic, meaning they could be retracted to 60 meters in order to pass under bridges and mitigate turbulence caused by strong winds.
It could transport 7,000 vehicles
When the sails are at their tallest and propped up on the ship's hull, they would reach up to 105 meters above the waterline. In comparison, a regular sailboat reaches only up to 30 to 35 meters into the air.
"No part of our sail is lower than 30 metres so we are using a piece of the atmospheric boundary layer above the ocean, where basically people have not been before," said Jakob Kuttenkeuler, a professor in naval architecture at KTH.
"Airplanes are above and boats are below. So we've put quite a lot of effort into measuring the atmospheric boundary layer."
Wallenius Marine hopes to build a fully functioning Oceanbird by 2024
Wallenius Marine attached sensors to its existing vessels in order to measure how the wind direction and velocity changes at such heights, in order to optimize both the wingsails as well as the fins at the bottom of the hull.
These can be moved against the direction of the wind, in order to prevent the boat from drifting off course.
For emergencies and maneuvering in and out of ports, the ship would also be equipped with an auxiliary motor, which Wallenius Marine claim runs on clean energy.
Unlike the wings of an airplane, the wingsails are symmetrical
At the moment, the ship is still in the prototyping stage, with a seven-meter tall model set to be trialed in Stockholm's harbor to gather data and optimize its performance and aerodynamics.
But the company says it could be taking orders from 2021 with the aim to deliver the first, complete vessel by the end of 2024.
The sails reach up to 80 meters high
Ireland's B9 Shipping and French start-up Neoline have developed similar designs for cargo ships, which make use of tall fabric sails to harness wind power.
Neoline is already planning to establish a new shipping route between Saint-Nazaire in western France and the East Coast of the US by 2022 and has signed a development deal with Renault to look at using its ships to transport the manufacturer's cars.
Another Swedish company, X Shore, has recently released an electric boat for private passenger travel in the hopes of bringing emission-free maritime travel to a broader market.
Read more:
Design Sustainable design Transport New Boats Technology Ships
Global Food Exports Are Paralyzed by Problems at Ports
The port backups that have paralyzed food shipments around the world for weeks aren’t getting much better. In fact, in some places, they’re getting worse
April 14, 2020
The port backups that have paralyzed food shipments around the world for weeks aren’t getting much better. In fact, in some places, they’re getting worse.
In the Philippines, officials at a port that’s a key entry point for rice said last week the terminal was at risk of shutting as thousands of shipping containers pile up because lockdown measures are making them harder to clear. Meanwhile, curfews in Guatemala and Honduras, known for their specialty coffees, are limiting operating hours at ports and slowing shipments. And in parts of Africa, which is heavily dependent on food imports, there aren’t enough workers showing up to help unload cargoes.
The port choke-points are just the latest example of how the virus is snarling food production and distribution across the globe. Trucking bottlenecks, sick plant workers, export bans and panic buying have all contributed to why shoppers are seeing empty grocery store shelves, even amid ample supplies.
Food moves from farm to table through a complicated web of interactions. So problems for even just a few ports can ripple through to create troubling slowdowns. For example, wheat grown in Europe can be shipped off to India, where it’s processed into naan bread for eventual export into the American market. Disruptions along the way are causing heavy delays.
And there’s the threat that things could get much worse if port problems spread. Just a handful of countries, for instance, export the bulk of the world’s rice and wheat, staple sources of calories. Soybeans from South America help keep the planet’s livestock fed, and the vast majority of cocoa supplies are shipped out of a small section of West Africa.
Even countries like the U.S., a key food exporter, depend on imports for things like wine, spices, cheese, and out-of-season produce — that’s how you can make avocado toast year-round.
U.S. frozen-foods company Saffron Road relies on Indian shipments for naan and other products. A three-week lockdown on the nation’s 1.3 billion people has brought transportation of goods within its borders to a near halt, and the government sparked confusion when it told all major ports that the virus was a valid reason to halt some operations.
Saffron Road may be forced to look for other suppliers if disruptions continue much longer, said Chief Executive Officer Adnan Durrani. Durrani said that his Indian products are well-stocked, though, and he won’t seek alternative suppliers for those goods.
“It’s uncharted territory,” Durrani said.
Still, in some parts of the world earlier port disruptions have already improved.
China is past the worst of its problems. At the height of the nation’s outbreak, thousands of containers of frozen pork, chicken and beef were piling up at major ports after transport disruptions and labor shortages slowed operations. The logjam also created a dearth of containers elsewhere in the world, which was then compounded by the fact that vessels weren’t making trips out from the Asian nation with manufactured goods. Those issues have since cleared up as the country went back to work.
In Brazil, the world’s top exporter of soybeans, beef, coffee and sugar, shipments are now running at a normal pace amid a joint effort between the government and companies to keep shipping flowing.
A.P. Moller-Maersk A/S, the world’s largest handler of refrigerated containers, is bringing 1,800 empty units to the South American nation to counter a shortfall for Brazil’s meat shipments. Containers are scarce in Brazil after being used for refrigerated stockpiles amid congestion in China’s key ports during the Asian nation’s lockdown, Maersk said.
Brazil also managed to export record volumes of soybeans in March after the government intervened to stop a strike threatened by port workers who were worried about their safety.
“Brazil’s export volumes are so big that any minor issue must be solved very quickly. Otherwise, it may lead to logistic bottlenecks in all the world,” said Sergio Mendes, head of the nation’s grain export group known as Anec.
But with the disease spreading, container issues are popping up in other regions. The sturdy boxes, often made of steel and usually measuring somewhere between 20 feet (about 6 meters) to 50 feet in length, are constantly sent back and forth across the planet with goods. That flow has been heavily disrupted as the virus slows manufacturing and cripples demand for some products. The Port of Los Angeles, for example, saw a 31% drop in volume in March compared with a year ago as retailers scale backorders.
Food exporters are being forced to wait longer for incoming shipments to be able to empty and refill vessels with their goods. That’s the case in Europe, where operations are running more or less normally, but the container squeeze is causing delays, according to Philippe Binard, general delegate of Freshfel Europe, a produce association.
It’s also a problem in Canada after some shipping routes were canceled by carriers because of lower demand for manufactured goods.
“The outbound capacity is really starting to diminish,” said Mark Hemmes, president of the Edmonton, Alberta-based Quorum Corp., a company hired by the federal government to monitor Canada’s grain transportation system.
Across the globe in Nigeria, the problem is too many containers, which are piling up and clogging the ports. Workers who would normally be clearing the congestion are facing difficulties coming in as the nation’s lockdown shut public transportation. Banks near the ports are closing, making it harder to process receipts and clearing documents.
With food stuck in containers floating at the docks, it’s exacerbating shortages and driving up prices.
“The ports are jam-packed,” Tony Nwabunike, president of the Association of Nigerian Licensed Customs Agents, the union that represents workers who clear the ports. “The main reason is that there is no movement now. Even those of us that have been given orders to go to the ports as essential service providers, we are not accessing the ports because transportation remains skeletal,” and not all workers have the necessary paperwork to show they are essential employees, he said.
“Police are on the road, so people are scared. There is harassment everywhere.”
Even as some of these issues start to ease, there’s also concern over the possibility of port workers getting sick. Employees in close proximity will have to be quarantined if they are exposed, and there’s the threat of contagion. Hubs like Singapore and Shanghai have halted crew transfers to prevent the spread of the virus.
In Australia, two workers at Port Botany, one of the country’s biggest container ports, tested positive for COVID-19, it was confirmed this week. A further 17 workers went into self-isolation for 14 days.
The threat of sick workers is top of mind for Paul Aucoin, executive director of the Port of South Louisiana, the largest tonnage port district in the U.S. The virus has already forced some security personnel to self-isolate, and vessel crews are no longer allowed onshore in an effort to stem the spread, he said.
“I fear we’re going to lose some workers, and when you lose workers it gets harder to keep the same pace,” Aucoin said. “We are going to see a slowdown.”
Lead photo: Bloomberg
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We Mapped How Food Gets From Farms To Your Home
Our map is a comprehensive snapshot of all food flows between counties in the U.S. – grains, fruits and vegetables, animal feed, and processed food items
2019
My team at the University of Illinois just developed the first high-resolution map of the U.S. food supply chain.
Our map is a comprehensive snapshot of all food flows between counties in the U.S. – grains, fruits and vegetables, animal feed, and processed food items.
To build the map, we brought together information from eight databases, including the Freight Analysis Framework from Oak Ridge National Laboratory, which tracks where items are shipped around the country, and Port Trade data from the U.S. Census Bureau, which shows the international ports through which goods are traded.
We also released this information in a publicly available database.
This map shows how food flows between counties in the U.S. Each line represents the transportation of all food commodities, along transit routes, like roads or railways. Environmental Research Letters (2019), CC BY-SA
What does this map reveal?
1. Where your food comes from
Now, residents in each county can see how they are connected to all other counties in the country via food transfers. Overall, there are 9.5 million links between counties on our map.
All Americans, from urban to rural are connected through the food system. Consumers all rely on distant producers; agricultural processing plants; food storage like grain silos and grocery stores; and food transportation systems.
For example, the map shows how a shipment of corn starts at a farm in Illinois, travels to a grain elevator in Iowa before heading to a feedlot in Kansas, and then travels in animal products being sent to grocery stores in Chicago.
2. Where the food hubs are
At over 17 million tons of food, Los Angeles County received more food than any other county in 2012, our study year. It shipped out even more: 22 million tons.
California’s Fresno County and Stanislaus County are the next largest, respectively. In fact, many of the counties that shipped and received the most food were located in California. This is due to the several large urban centers, such as Los Angeles and San Francisco, as well as the productive Central Valley in California.
Who ships and receives the most food, kilograms per year
In 2012, Los Angeles County both shipped (outflows) and received (inflows) more kilograms of food than any other U.S. county. Other California counties ranked highly in both categories.
We also looked for the core counties – the places that are most central to the overall structure of the food supply network. A disruption to any of these counties may have ripple effects for the food supply chain of the entire country.
We did this by looking for counties with the largest number of connections to others, as well as those that score highly in a factor called “betweenness centrality,” a measurement of the places with the largest fraction of the shortest paths.
San Bernardino County led the list, followed again by a number of other California transit hubs. Also on the list are Maricopa County, Arizona; Shelby County, Tennessee; and Harris County, Texas.
Core counties for the US food supply
A study showed that these nine counties -- mostly in California -- are most central to the overall structure of the food supply network. A disruption to any of these counties may have ripple effects for the food supply chain of the entire country.
However, our estimates are for 2012, an extreme drought year in the Cornbelt. So, in another year, the network may look different. It’s possible that counties within the Cornbelt would show up as more critical in non-drought years. This is something that we hope to dig into in future work.
3. How food travels from place to place
We also looked at how much food is transported between one county and another.
Many of the largest food transport links were within California. This indicates that there is a lot of internal food movement within the state.
One of the largest links is from Niagara County to Erie County in New York. That’s due to the flow of food through an important international overland port with Canada.
Some of the other largest links were inside the counties themselves. This is because of moving food items around for manufacturing within a county – for example, milk gets off a truck at a large depot and is then shipped to a yogurt facility, then the yogurt is moved to a grocery distribution warehouse, all within the same county.
The food supply chain relies on a complex web of interconnected infrastructure. For example, a lot of grain produced throughout the Midwest is transported to the Port of New Orleans for export. This primarily occurs via the waterways of the Ohio and Mississippi Rivers.
The infrastructure along these waterways – such as locks 52 and 53 – are critical, but have not been overhauled since their construction in 1929. They represent a serious bottleneck, slowing down innumerable supply chains nationwide, including that of grain. If they were to fail entirely, then commodity transport and supply chains would be completely disrupted.
Railroads are also important for moving grain. Fresh produce, on the other hand, is often moved around the country by refrigerated truck. This is due to the need to keep fresh fruits and vegetables – relatively high-value agricultural products – cool until they reach the consumer.
In future work, we hope to evaluate the specific infrastructure that is critical to the U.S. food supply chain.
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Amazon Plans To Have 100,000 Electric Delivery Vans On The Road By 2030
Amazon CEO Jeff Bezos has revealed that his company has placed an order for 100,000 electric delivery vans from Michigan-based electric vehicle company Rivian
09.20.19
Amazon CEO Jeff Bezos has revealed that his company has placed an order for 100,000 electric delivery vans from Michigan-based electric vehicle company Rivian. Amazon says its order of 100,000 vehicles is the largest order ever of electric delivery vehicles. It is just one of the ways Amazon pledged on Thursday to help combat climate change.
Our fleet is Electrifying! Thrilled to announce the order of 100,000 electric delivery vehicles – the largest order of electric delivery vehicles ever. Look out for the new vans starting in 2021.
Amazon says that the goal with the vans is to have all 100,000 of them on the road by 2030. Yes, that’s a decade away, but the company will begin the Rivian van rollout much earlier—in 2021. By 2022, Amazon says it hopes to have 10,000 of the vehicles on the road. And once all 100,000 hit the roads by 2030, Amazon says it will save 4 million metric tons of carbon per year.
The announcement was made as part of Amazon’s Climate Pledge, which sets the goal of meeting the historic Paris Agreement 10 years early—by the year 2040. Bezos says that by 2030 it wants Amazon running on 100% renewable energy, and by 2040 it wants the company to be a net-zero carbon producer. The Paris Agreement’s goal is for companies and countries to hit these metrics by 2050.
Announcing its new set of climate action plans, Bezos said:
We’re done being in the middle of the herd on this issue—we’ve decided to use our size and scale to make a difference. If a company with as much physical infrastructure as Amazon—which delivers more than 10 billion items a year—can meet the Paris Agreement 10 years early, then any company can. I’ve been talking with other CEOs of global companies, and I’m finding a lot of interest in joining the pledge. Large companies signing The Climate Pledge will send an important signal to the market that it’s time to invest in the products and services the signatories will need to meet their commitments.
U.S. Truck Driver Shortage Is On Course To Double In A Decade
The driver deficit swelled by more than 10,000 to 60,800 in 2018 from a year earlier, according to a study by the American Trucking Associations
By Thomas Black
July 23, 2019
The U.S. trucker shortage is expected to more than double over the next decade as the industry struggles to replace aging drivers and recruit more women.
The driver deficit swelled by more than 10,000 to 60,800 in 2018 from a year earlier, according to a study by the American Trucking Associations. The shortage is expected to ease slightly this year as U.S.-China trade friction slows freight demand and after trucking companies boosted pay to attract recruits.
The relief won’t last as replacing an aging pool of drivers gets harder in a tight labor market, said Bob Costello, chief economist for the trade group. The shortage is most acute for long-haul drivers, where the average age is 46, and workers are on the road for weeks at a time.
The ATA estimates that 160,000 driver positions will go unfilled in a decade.
“If things do not change, that’s where we will end up,” he said. “At some point, you go from being an operational pain-in-the-neck for the supply chain to real issues for all of us as consumers.”
In addition to increasing pay, trucking companies are trying to recruit more women, young people and former military personnel. Women make up less than 7% of drivers, and the industry is pushing to entice more with technology that makes trucks easier to drive and more comfortable.
The Arlington, Virginia-based ATA also wants regulators to lower the age for commercial drivers who can cross state lines by three years to 18. Its proposal would increase training and supervision. Cutting the age increases the recruiting pool and enables people to drive straight out of high school instead of choosing another industry, such as construction, Costello said.
Lead photo: An instructor, right, speaks with a student after practicing parallel parking with a truck at Iowa Central Community College in Fort Dodge.
Photographer: Sergio Flores/Bloomberg
This Futuristic Vehicle Could Solve Logistic Problems of Amazon, Walmart And Target
A new car, called Lotte, has been presented. It is a robotic courier. It autonomously transports packages to homes and businesses and uses a robotic arm to place the packages in a pickup locker.
A car named 'Lotte'
The company that came up with Walmart's pickup towers has now developed a self-driving car that could really result in a dramatic shift in the last-mile delivery industry.
A new car, called Lotte, has been presented. It is a robotic courier. It autonomously transports packages to homes and businesses and uses a robotic arm to place the packages in a pickup locker. Eventually, it will be able to deliver packages to mailboxes and pickup towers as well.
The Lotte, designed by Estonia-based technology firm Cleveron, is among the only self-driving delivery vehicles that can complete deliveries without any human intervention.
"Since the robot courier will replace human labor, which makes the last mile delivery cheaper," said Cleveron CEO Arno Kutt. "This in turn helps e-commerce grow even more. It will be less expensive and extremely convenient. The parcels are waiting for you safely in your own parcel locker."
A 2016 McKinsey study estimated that autonomous vehicles, including drones, would account for about 80% of all consumer parcel deliveries during the next 10 years. And according to a new study from consulting firm KPMG, approximately one million autonomous delivery robots could be on the streets by 2040.
Autonomous delivery could be a boon for retailers, which have seen shipping costs balloon in recent years. Amazon, for example, saw its shipping costs double between 2015 and 2017 to $21.7 billion.
Businessinsider.com reports how Ford and Walmart recently partnered to begin testing the delivery of goods using autonomous vehicles in Florida.
Publication date : 12/13/2018
Amid Trucking Shortage, Walmart Doubles Spending On Drivers
With shipping costs rising and freight volumes outpacing the supply of available trucks, food distributors are scrambling to find a solution to slow the financial burden on their overall earnings.
AUTHOR Jessi Devenyns
Sept. 11, 2018
Dive Brief:
Walmart, who has historically had low trucker turnover, is being pinched by the worsening shortage of drivers across the U.S. The retailer plans to double its spending on enticing and retaining truckers by the end of the year, according to Bloomberg Business.
In an effort to attract more drivers amid the tight market, Walmart will offer referral bonuses of up to $1,500, reduce the onboarding process by more than a month and broadcast its first national TV ad to drum up recruits.
“To be candid, right now I could hire a few hundred drivers,” Tracy Rosser, Walmart’s senior vice president of transportation, told Bloomberg. “It is getting tougher and tougher to find qualified drivers. It’s a really serious situation right now.”
Dive Insight:
Transportation is an issue in the grocery industry. With wage hikes, rising diesel-fuel prices and higher freight demand, June saw the biggest monthly uptick in long-distance trucking costs in nearly a decade.
On top of the rising costs, driver vacancies reached a record 296,311 in the second quarter, according to researcher FTR Transportation Intelligence. Just one truck was available for every 12 loads needing to be shipped at the start of 2018, which is the lowest ratio since 2005, according to an industry analysis by DAT Solutions.
The average age of a Walmart driver is 55, so the company is losing many to retirement, and the industry turnover rate hovers around 90 percent for long-haul truckers, according to the American Trucking Associations. In an effort to fill the gaps left by truckers rotating and retiring, Walmart is vigorously increasing incentives. New hires earn about $86,000 a year and get up to three weeks vacation, and now Walmart is working to reduce the onboarding process from 70 to 30 days and offering referral bonuses to new drivers.
Walmart’s profit margins have taken a hit for three straight quarters due to the trucker shortage. But the company is not alone. Bloomberg reports that cutthroat competition has caused some other carriers to raise wages as many as three times over the past year and dish out signing bonuses of as much as $10,000. Everyone is feeling the strain.
With shipping costs rising and freight volumes outpacing the supply of available trucks, food distributors are scrambling to find a solution to slow the financial burden on their overall earnings. Many manufacturers — including Dean Foods, Tyson, Del Monte, Kellogg and US Foods — said higher transportation and logistics costs weighed on earnings in the most recent quarter.
Trucks are vital to the retail supply chain. They carry more than 70% of the goods consumed in this country, according to the American Trucking Association, and under normal circumstances, grocers lose $75 billion a year in sales — 10% of the industry total — due to out-of-stocks and unsalable goods, often the result of late deliveries, according to the Food Marketing Institute. With the industry anticipating a need for 898,000 new drivers or an average of nearly 90,000 per year for the next decade, if fleets can’t find new drivers, grocers could expect losses to increase. As it stands, it wouldn’t be surprising to see retailers and manufacturers pass the cost of those losses on to consumers.
But to contrast that, diesel prices are expected to drop after reaching a three-year high. Although lower gas prices alone won’t be enough to overcome the worker shortage, it could help financially. The demands of the job are steep, even with recent regulations limiting time on the road, and keep many otherwise qualified drivers from applying. The hours are long and don’t allow for much of a home life. In addition, it’s a largely male field, with only 6% women in its workforce.
Still, Walmart hopes that by doubling its recruiting spend for non-traditional truckers that it can operate its private fleet of 6,500 trucks at full capacity and keep fulfilling orders. However, the pressures associated with freight show no signs of letting up, and as the perfect storm of higher consumer demand and lower trucking supply continues to rage, it will keep having a significant impact on profit margins for retailers and suppliers.