Even though a few soccer and rugby matched have already taken place, the 2024 Summer Olympics officially kick off today, as Snoop Dogg carries the Olympic torch through the streets of Saint-Denis. With 10,500 athletes representing 205 National Olympic Committees, there are a few athletes and storylines that I will be keeping a close eye on. Simone Biles, who has won every all-around competition she has entered in more than a decade, is back on the Olympic stage after taking a two-year break after the Tokyo Olympics. From all reports, she is better than ever, and has added a new skill to her repertoire: the Yurchenko double pike (YDP), the most difficult vault in women’s gymnastics. Moving on to swimming, Katie Ledecky is already a 10-time Olympic medalist, with seven golds to her name. Slated to compete in four events in Paris, Ledecky has a chance to surpass Jenny Thompson, Natalie Coughlin and Dara Torres (all with 12 medals) as the most decorated female American Olympian in history — and could potentially pass Thompson (eight) to take over the record for the most gold medals by a woman in the sport. And finally, the US Men’s Basketball team is seeking a fifth straight gold medal. The lead-up to the Olympics has been an up-and-down ride, with the Americans squeaking out a few close games. It will be interesting to see if the team is able to dominate when the stakes matter. And now on to this week’s logistics news.
Microsoft, CrowdStrike IT outage hits global supply chain
UPS to buy Mexican delivery company Estafeta
Boeing faces parts shortage
America’s freight recession is nearing its end
Suez Canal revenue dropped $2B last year due to Red Sea security crisis
Younger workers injured more often than those nearing retirement
Royal Mail launches drone delivery trial in Scotland’s remote islands
Port of Long Beach breaks ground on $1.6 billion ‘Green Gateway’ rail expansion
The CrowdStrike software bug that crashed Microsoft operating systems and caused the largest IT outage in history caused disruptions at U.S. and global ports, with highly complex air freight systems suffering the heaviest hit, as global airlines grounded flights. Thousands of flights were grounded or delayed at the world’s largest air freight hubs in Europe, Asia and North America. The new issue for the global supply chain comes amid a rise in global demand, with shipments up 13% year-over-year in June. Air freight supply has increased, but only by 3% year-on-year, already causing higher costs for shippers due to the limited capacity. Pete Buttigieg, U.S. Secretary of Transportation, told CNBC on Friday morning that what the government is watching for over the course of the day, as the issue has been identified, is “the kind of ripple or cascade effects as they get everything back in their networks back to normal.”
UPS agreed to acquire Mexican express delivery company Estafeta, in a deal aimed at expanding the U.S.-based carrier’s role in Mexico as nearshoring manufacturing trends drive more cross-border trade. Based in Mexico City, Estafeta handles both packages and larger freight shipments and delivers domestically in Mexico and across the border with the U.S. “Global supply chains are shifting, Mexico’s role in global trade is growing, and Mexican small and medium enterprises and manufacturing sectors are looking for reliable access to the U.S. market,” UPS Chief Executive Carol Tomé said in announcing the agreement Monday. The price of the acquisition, which is expected to close by the end of the year, was not disclosed.
About 200 fully or mostly finished Boeing jets are idled while they await interiors, engines and other attention. Parts shortages and other issues have left the jet maker with about 200 fully or mostly finished airplanes sitting in airfields, outside plants and—in one location—an employee parking lot. Some of the planes are awaiting interiors; others need engines. Dozens more are awaiting delivery to China. Unable to fly, the planes aren’t delivering much-needed cash as the jet maker burns through more than $1 billion a month. And they present a host of logistical challenges. Planes sitting around too long may need software or other updates. Moving unfinished jets is tricky, especially if the part they are missing is the engine, as is the case with a handful of 777 freighters.
The trucking industry is turning a corner after a prolonged freight recession that succeeded the Covid boom in transportation rate and services, according to logistics executives. Data from Motive, which tracks trucking visits to North American distribution facilities for the top five retailers, shows volume up 30% year-over-year in June. Peak season, the time of year when suppliers bring in their back-to-school and holiday items, started a month early in June versus July due to the Red Sea diversions and the threat of a longshoreman strike at the East Coast and Gulf ports on October 1. Data across the retail sector shows year-over-year order increases through June, including at department stores, electronics, and apparel retailers with bricks-and-mortar locations (32.9%), home improvement (24.4%), grocery & superstores (22.1%), and discount retailers & wholesalers (13%). The latest retail sales report for June came in better than expected. Excluding autos, sales rose 0.4%, a larger gain than the 0.1% consensus forecast.
The Suez Canal Authority saw its revenue drop by about $2 billion year-over-year because of the traffic impact of Houthi attacks in the Red Sea. In FY 2023/24, the SCA’s revenue fell to $7.2 billion from $9.4 billion the prior year, a drop of about 23 percent. The total tonnage passing through the canal fell by a third, and the number of transits declined by about 22 percent year-over-year. As the Houthi attacks only began in earnest in November 2023, after half of the SCA’s fiscal year had passed, the numbers partially reflect business-as-usual performance last summer and fall. Current traffic levels are less encouraging, and suggest that FY 2024/25 numbers will be even lower unless the security situation improves. The canal is a key source of revenue for the government of Egypt, and it is one of the country’s top earners of foreign currency.
The proportion of work-related injuries among newly hired workers increased from 2017 to 2022, with workers under 25 reporting more frequent injuries than those 55 and older, according to a report released by the Workers Compensation Research Institute. The report, which analyzed 8.4 million non-COVID-19 claims across 31 states, found that work injuries among workers with shorter tenure increased from 18% to 23% during the study period, the report states. Five industries accounted for nearly three out of every four work injuries between 2017 and 2022, and 21% of all workplace injuries were for workers at or nearing retirement age, according to a report released Thursday by the Workers Compensation Researcher Institute. Those five industries are wholesale and retail trade, manufacturing, services, health care and social assistance, and transportation, warehousing and utilities.
Royal Mail has launched a new trial that will see uncrewed aerial vehicles (UAVs), or drones, deliver mail between the remote Scottish islands of Islay and Jura. The trial, conducted in collaboration with drone developer Skyports and Argyll and Bute Council, was partially funded by a £250,000 grant from the Department for Science, Innovation and Technology to demonstrate the potential of drones in enhancing public services. This initiative marked the first instance where postal workers actively loaded and unloaded drones. The multirotor drone, which is reportedly capable of carrying up to six kilograms, had been previously used in Orkney trials. The drone will operate under Extended Visual Line of Sight (EVLOS) flying, allowing it to travel beyond the standard visual range with the assistance of trained observers ensuring safe operation. The trial was established to address the logistical challenges posed by the Inner Hebrides’ weather and geography, which often disrupted traditional ferry-based mail transport.
With a turn of ceremonial dirt, Long Beach Mayor Rex Richardson, Congressman Robert Garcia and U.S. Secretary of Transportation Pete Buttigieg broke ground on a $1.6 billion project that has been years in the making: a massive expansion of the Port of Long Beach’s railyard. The project will double the yard’s acreage and triple its annual cargo volume to five million shipping containers a year, all while reducing the need for smog-spewing cargo trucks that inundate the local freeways with pollution and traffic. Construction will be broken up into 10 individual projects, with the first to be completed by 2027 and the last by 2032. Once finished, the port’s new railyard site — dubbed by engineers as the Pier B On-Dock Rail Support Facility, by politicians as the “Green Gateway” — will handle up to 17 trains a day, with room to assemble and strip down a chain of rail cars up to 10,000 feet long.
That’s all for this week. Enjoy the weekend and the song of the week Winner Takes It All by Sammy Hagar.
The post This Week in Logistics News (July 20 – 26) appeared first on Logistics Viewpoints.