October 14th – 18th 2024 Supply Chain & Logistics News
Yesterday, I landed back in the States from my autumn getaway. While I was away, I visited Barcelona and enjoyed the beautiful architecture, temperate weather, delicious cuisine, and affordable wine. For today’s round-up introduction, I decided to investigate the reasons behind the cheap and tasty wine. Spain produces over 6 billion bottles of wine every year, and winemakers do not pay any duty for it. Successive governments have determined that applying zero duty on wine is the best strategy to help winemakers keep producing and selling. A duty is a form of taxation levied on certain goods, services, or transactions, particularly those that are imported or exported. It may seem like a small detail, but wine has multiple component costs that affect the total price—such as production, land, labor, and oak barrels. All of these factors can fluctuate from one year to the next. For example, in the UK, duty on a bottle of wine is currently £2.23, and on top of that, there’s a 20% VAT. The UK treasury collects over £6 billion annually from duty and VAT on wine. In contrast, Spain only charges a 21% VAT on wine and no duty. So, next time you’re browsing for a bottle of wine and comparing prices, raise a glass to the Spanish tax office to keep the good stuff more affordable than it is in other places.
Now let’s get to the Supply Chain News:
Descartes Acquires Sellercloud
Descartes Systems Group, a standout provider in logistics solutions, announced its acquisition of Sellercloud, a US-based provider of omnichannel e-commerce solutions. Sellercloud serves small to mid-sized retailers, wholesalers, and manufacturers with inventory and order management systems (IMS/OMS) that help manage and synchronize inventory across multiple sales channels, while also facilitating order fulfillment. Descartes believes this acquisition enhances its existing e-commerce offerings, providing a comprehensive solution for the entire lifecycle of domestic and cross-border e-commerce shipments. Descartes’ CEO Edward J. Ryan highlighted Sellercloud as a key complement to their existing e-commerce investments.
Boeing Cuts Production and Downsizes on Employees Amid Company Troubles
Boeing is cutting 17,000 jobs, delaying the first deliveries of its 777X jet to 2026, and recording $5 billion in third-quarter losses due to financial strain from a strike by 33,000 workers, which has halted production of key jets. CEO Kelly Ortberg said the downsizing aligns with the company’s financial reality. Boeing, which is facing $60 billion in debt and risks losing its investment-grade credit rating, may need to raise to $15 billion. The strike is causing significant disruptions, and Boeing is dealing with labor disputes, FAA scrutiny, and legal challenges, including a fraud case. Customers such as Ryanair will have to revise their passenger traffic estimates for next year because of expected aircraft delivery delays from Boeing. For example, Ryanair was supposed to get 20 deliveries before the end of December. They will probably come now in January and February. The Ryan Air CEO Michael O’Leary said in his 30 years in the industry he has never seen capacity constraints to the current extent.
Amazon Announces Small Modular Reactor Deals with Dominion, X-energy, Energy Northwest
Amazon is making significant investments in nuclear energy, focusing on Small Modular Reactors (SMRs) as part of its goal to achieve net-zero carbon emissions by 2040. Following recent clean energy initiatives by Google and Microsoft, Amazon has partnered with X-energy to bring over 5 GW of new nuclear power online by 2039. The company plans to deploy SMRs at multiple locations, including four 80-MW reactors at Columbia Generating Station and a potential 300-MW plant near Dominion Energy’s North Anna nuclear station. These efforts aim to support Amazon’s operations with clean energy while advancing nuclear technology. Amazon has signed three agreements to support the development and deployment of small modular reactors in the United States. Amazon entered into a deal with Energy Northwest, a consortium of 29 public utility districts and municipalities across Washington, to deploy four reactors developed by X-energy that will together generate approximately 320 MW of electricity beginning in the early 2030s.
Do You Think Fedex Ships Live Pandas?
This last week, FedEx furthered its commitment to the giant panada conversation, FedEx has completed its first-ever round trip transportation of six pandas between the US and China via two separate flights. FedEx recently transported two 27-year-old giant pandas, Lun Lun and Yang Yang, along with their twin offspring, Ya Lun and Xi Lun, from Zoo Atlanta to the Chengdu Research Base of Giant Panda Breeding in China. Having lived at Zoo Atlanta since 1999, the pandas’ relocation is part of a longstanding partnership between FedEx and Chinese authorities, which began with the first panda flight in 2000. FedEx also recently transported Bao Li and Qing Bao, two other pandas, to the Smithsonian’s National Zoo in Washington. FedEx covered the transportation costs, ensuring the pandas’ comfort with bamboo and expert care en route. This move continues the tradition of U.S.-China panda exchanges, which began in 1972. Although pandas were once endangered, they are now considered vulnerable by the World Wildlife Fund. Notably, other companies such as DHL, Air China, UPS, China Southern Airlines, and a few others have all assisted in the transportation of Pandas from various global locations.
Ocean Network Express’s Latest Sustainability Report Reveals Major Scope 1 Cut
ONE has made significant strides in reducing emissions, achieving a 62% reduction in scope one emissions intensity and a 21% decline in total emissions from 2018 to 2023. The company aims for net-zero emissions across all scopes by 2050. Among its decarbonization initiatives, ONE listed a wind propulsion trail launched in November 2023, and the installation of a bow windshield in January 2023. Its latest biofuel trial and the order of a dozen 13,000 teu methanol dual-fuel container ships in January 2024 with ships scheduled for delivery from 2027. Key initiatives include launching wind propulsion trials, installing aerodynamic features, conducting biofuel trials, and ordering methanol dual-fuel ships. ONE is also testing innovative wind assist devices on its vessels and utilizing onshore power supply to further reduce emissions. CEO Jeremy Nixon highlighted the urgent need for the maritime industry to address climate change, citing its impact on operations.
Song of the week:
