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This Week in Logistics News (February 10 – 16)

Wednesday, February 14 was Valentine’s Day. And according to the National Retail Federation, the holiday returned to its romantic traditions, with total spending on significant others for the holiday expected to reach a record $14.2 billion (the actual numbers won’t be available for a few weeks). Over half of consumers (53 percent) plan to celebrate Valentine’s Day this year, on par with 52 percent last year. Overall, consumers plan to spend a total of $25.8 billion to celebrate Valentine’s Day, on par with last year’s spending and the third highest in the survey’s history. Sixty-two percent of consumers ages 25-34 plan to celebrate this year, more than any other age group. Consumers expect to spend $185.81 each on average, nearly $8 more than the average Valentine’s Day spending over the last five years. The top gifts include candy (57 percent), greeting cards (40 percent), flowers (39 percent), an evening out (32 percent), jewelry (22 percent), clothing (21 percent) and gift cards (19 percent). New spending records are expected for jewelry ($6.4 billion), flowers ($2.6 billion), clothing ($3 billion) and an evening out ($4.9 billion). And now on to this week’s logistics news.

Can the US break China’s grip on solar?
Supply chain operations are facing a workforce shortage
US expects to invest more than $5 billion in computer chips
NYC plans 6 new waterfront shipping hubs
Shipping bosses warn maritime security in the Red Sea is getting worse
Arizona bill would shield warehouse workers from “dangerous quotas”
Starship Technologies raises $90M as its sidewalk robots pass 6M deliveries

China has come to dominate every step of the long, complex manufacturing process for solar panels. Part of the reason for that dominance, built over two decades, is that the cost of everything from electricity to labor is much cheaper there than in places such as the U.S. or Europe. More recently, the massive scale of China’s solar-manufacturing operations has become an advantage, as it attracts talent, research money and ecosystems of suppliers. Now, as demand for renewable energy explodes, the U.S. is trying to build its own solar-manufacturing supply chain almost from scratch and supporting the effort with sizable subsidies. The primary building block for some 97 percent of the world’s solar panels is high-purity silicon, or polysilicon. In the U.S., that share is smaller because of the popularity of another type of panel made by spreading a thin film of chemicals on glass. Still, more than three-quarters of solar panels installed in the U.S. in 2022 were made from polysilicon. China’s cost savings extend throughout the production process. The U.S. is trying to close the gap with big production incentives tied to each major stage of that process.

The supply chain and workforce that make up the sector are constantly evolving. Labor shortages in transportation and warehousing are quick to make headlines, but job opportunities across the supply chain continue to go unfilled despite promising pay and benefits. A study of over 1,000 industry decision-makers found that 76 percent of today’s supply chain operations are experiencing notable workforce shortages, with 37 percent of respondents characterizing the resource shortage they face as high to extreme. Transportation and warehousing roles are hurting the most, with nearly 61% of leaders noting that transportation operations—labor-intensive roles that keep goods moving—are the areas suffering the most from the shortages. While the industry struggles to attract and retain talent, ZipRecruiter’s recently released 2024 Labor Market Outlook found that the transportation and warehousing sector has added the most jobs of any sector since the pandemic and over the past decade. And within the sector, the warehousing and storage category has added the most jobs.

Chipmakers are struggling to get enough Americans trained for the positions needed to keep pace with growing demand. The Biden administration announced its latest effort to help alleviate the problem. The White House said that the US expects to invest more than $5 billion in a public-private consortium aimed at supporting research and development in advanced computer chips. A key part of the mission of this National Semiconductor Technology Center (NSTC) would be to stand up a “Workforce Center of Excellence” funded with hundreds of millions of those dollars. The center plans to set up shop in different regions of the US to try and spur the training of more semiconductor engineers. It remains to be seen if the new effort will be enough to make a dent in labor market concerns that have emerged as a significant roadblock in the effort to bring more chipmaking to the US. Until this week’s announcement, much of the responsibility for training workers fell to state and local governments as well as the companies themselves. But observers repeatedly warned that those efforts wouldn’t be enough, with more dramatic policy solutions likely becoming inevitable.

New York City officials plan to turn six waterfront locations into maritime shipping hubs as a way to handle the booming number of e-commerce deliveries across the five boroughs. Details of the initiative were published on Friday through a request for proposals by the city Economic Development Corporation. It marks the latest step in Mayor Eric Adams’ “Blue Highways” plan to shift more of the city’s freight off the streets and onto the rivers and harbors. The request seeks an engineering firm to design barge landings and access points where e-bikes and small delivery vehicles can transport cargo for the “last mile” of its journey. The locations include:

McGinnis Cement Terminal in the the Bronx’s Hunts Point neighborhood
Stuyvesant Cove adjacent to StuyTown
Pier 36 on the Lower East Side
Downtown Manhattan Heliport in the Financial District
The 23rd Street basin and 29th Street apron on Brooklyn’s Gowanus Bay

The EDC in its request estimates the plan would take 6,240 short-haul trucks off the streets, and states the city’s “overreliance on trucks negatively impacts air quality, traffic, quality of life and safety.” The plan would save more than 92 million miles of truck travel and 8.3 million gallons of fuel every year, according to the request.

Major shipping companies are warning that the security situation in the Red Sea is continuing to deteriorate, despite efforts by the west to limit attacks by Yemen’s Houthi rebels. The bosses of A.P. Moller-Maersk A/S and D/S Norden A/S said on Thursday that they felt the threat level was continuing to escalate in the region. It comes after Japanese shipping giant Mitsui OSK Lines Ltd. said the disruption on the route could last for a year. Swaths of the merchant fleet have been avoiding the waterway since attacks by the Houthis began in mid-November. The area grew even more volatile after the US and UK launched airstrikes in the middle of last month, prompting major owners in all sectors to avoid the region. The shipping companies’ perceptions of risk matter because they are what will dictate when vessels return to the region. All of the owners said they will continue to re-route their ships until it is safe to travel the Red Sea. In addition to the airstrikes launched by the US and UK, there’s also a defensive force operating in the Red Sea known as Operation Prosperity Guardian.

An Arizona bill that would shield warehouse workers in the state from “dangerous quotas” has gained the support of the Teamsters Union, even as several other states have already passed similar legislation. Specifically, Arizona House Bill 2682 would create transparency around dangerous quotas in warehouses and ensure unrealistic work conditions do not interfere with legally protected breaks for workers, the Teamsters said. The bill has currently been assigned to the Arizona House Rules Committee and awaits a hearing. Similar warehouse worker protection bills have already been passed in California, Minnesota, New York, and Washington. While the bill would apply to warehouse workers regardless of their employer, the Teamsters are specifically pushing back on the e-commerce giant Amazon, which operates 17 fulfillment and sortation centers and 13 delivery stations in Arizona, employing some 33,000 full- and part-time employees, according to published reports. Amazon has also come under scrutiny in recent weeks from regulators in France, who fined the company for using “excessively intrusive” warehouse labor software. Amazon has disputed that ruling, calling it factually incorrect and saying that warehouse management systems are industry standard.

Sidewalk delivery robot services appear to be stalling left and right, but a pioneer in the concept says it is profitable and has now raised a round of funding to scale up to meet market demand. Starship Technologies, a startup out of Estonia that was an early mover in the delivery robotics space, has picked up $90 million in funding as it works to cement its position at the top of its category. This latest investment round is being co-led by two previous backers: Plural, the VC with roots in Estonia and London that announced a new $430 million fund last month; and Iconical, the London-based investor backed by Janus Friis, the serial entrepreneur who was a co-founder of Skype, and who is also a co-founder of Starship itself. It brings the total raised by Starship to $230 million, with previous backers including the Finnish-Japanese firm NordicNinja, the European Investment Bank, Morpheus Ventures and TDC.

That’s all for this week. Enjoy the weekend and the song of the week, Valentine by the Replacements.

The post This Week in Logistics News (February 10 – 16) appeared first on Logistics Viewpoints.

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