Yellow Light, Green Shift ✋
Good morning, Supply Chain Enthusiasts! As we dive into today's news, just remember, supply chains are like puzzle pieces – sometimes they fit perfectly, and sometimes you've got to reshuffle the whole box. From freight delays to innovative logistics solutions, we're here to unpack it all and sprinkle a bit of wit along the way.
So grab your coffee and let's untangle the twists and turns of the supply chain world! 🌎
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Yellow Corp. Bankruptcy Triggers LTL Market Shift and Optimization Efforts by Carriers
The recent bankruptcy of Yellow Corp., a major US less-than-truckload (LTL) carrier, has caused a capacity shift in the LTL market. Carriers are using this opportunity to optimize their freight by taking on former Yellow customers and evaluating their existing volumes against the new influx of volume. Changes in pricing strategies and rules tariffs are being made to accommodate this shift and optimize their networks.
Rival LTL carrier Estes Express Lines is offering to help fund Yellow's wind-down efforts through bankruptcy proceedings. This event highlights the cyclical nature of the transportation industry and the impact of major disruptions on the market.
Check out today’s featured article from Fleet Owner to read about the ripple effect in the LTL sector after Yellow’s bankruptcy.
Featured Article
Yellow’s exit ‘reshuffling’ the LTL deck | Fleet Owner
In the wake of the third-largest U.S. less-than-truckload carrier folding its operations, the LTL market has undergone a radical capacity shift.
Loans & Bankruptcy
Citadel Affiliate Acquires $485M Yellow Corp. Debt Amid Bankruptcy Loan Reevaluation
An affiliate of Citadel, led by Ken Griffin, has acquired around $485 million in Yellow Corp. debt that was previously held by Apollo Global Management and other senior leaders of the bankrupt trucking firm. This move comes as Yellow is seeking a bankruptcy loan to support its liquidation process, and the acquisition by Citadel has prompted Apollo and other lenders to reconsider their proposed Chapter 11 loan.
Yellow is also exploring alternative bankruptcy loans from MFN Partners and Estes Express Lines, which could offer better terms and more time for the company to divest its assets.
Loans & Electric Vehicles
GM Leads $60 Million Financing Round for Mitra Chem's Affordable EV Battery Development
General Motors (GM) has taken the lead in a $60 million financing round for Mitra Chem, a California-based startup co-founded by Tesla and Toyota veterans. Mitra Chem is focused on creating more cost-effective batteries for electric vehicles (EVs) based on lithium iron phosphate (LFP) chemistry, which eliminates the need for costly minerals like cobalt and nickel. While LFP batteries are durable, their lower power density requires more cells for an equivalent range, and most currently available LFP cells are made by Chinese companies.
Mitra Chem aims to enhance LFP battery power density by introducing manganese into the cathodes, utilizing an AI-powered platform to expedite battery chemistry development. If successful, GM envisions integrating Mitra Chem's batteries into its vehicles within this decade.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
🇵🇦 Panama Canal Tightens Operations, Prompting Freight Vessel Waiting Times and Supply Chain Disruptions. Severe drought conditions in Panama have led to the Panama Canal tightening maritime operations and causing the longest waiting times for freight vessels since 2022. Delays of up to three weeks are being experienced, which could result in disruptions such as extended container lead times, shortages, increased costs for consumer goods, and potential shifts in trade patterns to the U.S. West Coast. The Panama Canal Authority has introduced new rules, including reducing booking slots for large vessels and lowering maximum draught restrictions, to address the unprecedented water scarcity challenges.
🌎 Reshoring and Nearshoring Gaining Momentum. AlixPartners' research report suggests that the combination of geopolitical considerations, disruptions caused by the pandemic, evolving trade policies, government subsidies, and automation is ushering in a new era of reshoring and nearshoring. Factors such as rising wages in China and reduced total cost gaps between Asian production and nearshoring have spurred companies to reevaluate their sourcing strategies. The report indicates that a potential "nearshoring revolution" is underway, reshaping global supply chains and leaving a lasting impact on various industries.
iLevel With You 🏡
More topics for the average American household to consider…
🇺🇸 Geopolitics Continues to Have an Impact on Global Supply Chains and the Role of AI. The pandemic highlighted the significance of global supply chains, which face ongoing threats and disruptions. Geopolitical tensions and issues like Russia's actions in Ukraine and China's human rights concerns affect supply chains. The US Congress' Uyghur Forced Labor Prevention Act (UFLPA) prompted questions about supply chain transparency, while McKinsey's survey revealed limited visibility into upstream supply chains. To mitigate risks, AI is essential for achieving comprehensive visibility, particularly as AI has demonstrated its value in securing supply chains. Balancing AI regulation to encourage responsible use without stifling innovation is crucial, especially as AI's role in securing supply chains is paramount for national security.
🍎 Northeast Regional Shipments Plummet 27% in Q2, Amidst Decline in Housing Starts and Consumption. A U.S. Bank index revealed a steep 27% year-over-year drop in Northeast regional shipments during Q2, surpassing the 25% decline observed in Q2 2020 at the onset of the pandemic. This decline was attributed to decreased housing starts, reduced household consumption, and overcapacity. While other regions also experienced decreases, the Southwest stood out with a 15% increase in shipments, driven by robust cross-border truck traffic with Mexico.
🚦 Carmel, Indiana's Roundabout Success Proves Safer and Efficient Traffic Management. While roundabouts have only recently gained popularity in the US, Carmel, Indiana, stands out as a city that has embraced them wholeheartedly. Mayor Jim Brainard, inspired by his experiences in the UK, has integrated around 150 roundabouts into the city's traffic infrastructure, greatly reducing accidents, congestion, and environmental impact. Despite some criticism about handling high traffic volumes and potential harm to bicyclists, the success of Carmel's roundabouts has contributed to the city's positive reputation and transformed its transportation network.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
☀️ Corporate Responses to Climate Change and the Supply Chain Challenge. Companies worldwide are increasingly embracing sustainability to counteract climate change's effects, altering their practices and policies. Human activities, notably the burning of fossil fuels, are driving climate change, leading to greenhouse gas emissions. The US Inflation Reduction Act (IRA) and the EU's emission-cutting tax framework illustrate policy initiatives. While efforts to mitigate climate change are commendable, the impact is evident in disrupted global supply chains due to rising sea levels, extreme weather events, and other factors, necessitating a comprehensive response beyond policy changes.
💨 Decarbonizing Supply Chains is a Complex Financial and Sustainability Balancing Act. To achieve global decarbonization, urgent supply chain decarbonization is necessary, with 75% of greenhouse gas emissions falling under Scope 3 emissions. However, addressing these emissions requires substantial technology, infrastructure, operational changes, and finances. The transition to net zero emissions could cost an additional $3.5 trillion annually, and companies are grappling with whether buyers or suppliers should bear the financial burden. The challenges of balancing cost control and carbon reduction, particularly in Scope 3 emissions, present complex dynamics that involve financing programs, supplier incentives, and evolving environmental requirements.
♻️ Hydrogen's Hidden Challenge is Midstream Infrastructure and its Impact on Emission Reduction Efforts. Logistics and transportation companies have focused on hydrogen fuel cells for emissions reduction, but a study by IDTechEx reveals that the "midstream infrastructure" for hydrogen storage and transportation has been overlooked. While efforts have concentrated on hydrogen production and fuel cell technology advancements, the study emphasizes the need for better transportation and storage solutions to fully leverage hydrogen's potential. Challenges include the need for efficient compression and the limited availability of hydrogen pipelines. Despite hurdles, as hydrogen applications grow, research into storage and distribution technologies is expected to increase, with the global low-carbon hydrogen production market projected to reach $130 billion by 2033.
🛑 Amazon Enforces Emissions Reporting for Suppliers in Pursuit of 2040 Net Zero Goal. Amazon is taking significant steps towards sustainability, requiring emissions reporting and goal-setting from its suppliers to support its net zero emissions goal by 2040. The company's 2022 sustainability report outlines the change in its Supply Chain Standards, mandating CO2 emissions reporting from next year. Amazon aims to provide suppliers with tools to reduce emissions, transition to renewable energy, and access sustainable materials. The move aligns with Amazon's commitment to power its operations with 100% renewable energy by 2025. The company is also working on reducing waste, and supply chain emissions, and offering sustainable product choices.
🍌 Addressing Work-Related Emissions and Educating Employees in Food & Beverage Sector. Sustainability is paramount in the food and beverage industry, with supply chain and logistics practices holding sway over environmental impact. Work-related emissions constitute a significant portion of individual carbon footprints, urging employers to adopt education and training initiatives. Recognizing their role as change agents, companies can foster a culture of sustainability, promoting practices such as reducing red meat consumption and embracing sustainable transportation options. Collaboration, adaptable education programs, and sharing best practices are pivotal in reducing work-related emissions and driving a greener future.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 25, 2024, from iLevel Logistics Inc.