💸 Wage Wheels
Good morning! Welcome to the November 13th edition of our Supply Chain and Logistics Newsletter, where today, we celebrate World Kindness Day by shining a light on the compassionate and considerate side of our industry. While the world of supply chain and logistics may often be associated with efficiency, precision, and timeliness, it is also a realm where acts of kindness can make a profound impact.
Join us in recognizing and appreciating the heartwarming stories and initiatives that exemplify the spirit of kindness within our global supply chain community. 👍🏽❤️
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Significant Wage and Time Reduction Initiatives for Honda's U.S. Factory Workers in January
In January, Honda will implement an 11 percent wage hike for its U.S. factory workers as part of recent negotiations with the United Auto Workers (UAW) union and major automakers. Alongside this pay increase, Honda will shorten the time required for employees to reach the maximum wage rate from six years to three years, aligning with agreements made by Ford, General Motors (GM), and Stellantis. Honda emphasized its enduring commitment to offering competitive wage and benefit packages to its production associates in the United States.
This announcement follows the recent conclusion of the UAW strike against the three major U.S. car companies, resulting in a 25 percent general wage increase over the 4 1/2-year contract, along with cost-of-living adjustments and a three-year progression to the maximum wage rate. Toyota has also joined in by announcing plans to raise wages for hourly manufacturing workers in the U.S. by approximately 9 percent starting on January 1, while reducing the time required to reach the maximum wage rate to four years.
Check out today’s featured article from The Hill to learn more about why Honda increased their pay by 11% following the strike of the United Auto Workers. Will more car manufacturers start giving higher pay increases?
Featured Article:
Honda to increase pay for US autoworkers following UAW strike | The Hill
“Honda plans to increase wages for workers at U.S. factories by 11 percent in January after the United Auto Workers (UAW) union struck a deal for substantial pay raises and other benefits with three major automakers late last month.”
Air Travel & Money Matters
Airline Pricing Strategies Amid Record Seat Challenges
Airlines are grappling with the challenge of filling a historically high number of seats, totaling 260 million, in the current quarter. To entice passengers during off-peak times, carriers are rolling out remarkably low fares, often comparable in price to a pair of movie tickets. Southwest Airlines, for instance, recently offered one-way fares as low as $29 for off-peak flights, reflecting the industry's increased capacity in recent months. This shift in pricing strategies follows the return of leisure travelers to more traditional booking patterns after pandemic-related demand fluctuations, leaving airlines seeking ways to fill planes during non-holiday and less popular travel periods.
The decrease in pricing power during off-peak periods is prompting airlines to rethink their flight deployment strategies. Carriers like Southwest are planning to reduce flights on nonpeak days, focusing on efficient capacity deployment based on demand. While eye-catching, double-digit fares are available during the off-season, they are often limited and not applicable during peak holiday periods, where demand is expected to soar. Looking ahead to 2024, airlines are anticipated to stabilize fares, but the future of promotional fares remains uncertain and may be influenced by factors like inflation and hiring trends. Full-service carriers may adjust their fare offerings to align with demand, offering a range of options from basic economy to premium seats to optimize revenue across varying demand periods.
Energy & Island
Revolutionary 140-Year-Old Technology Promises Unlimited Clean Energy for Island Nations
Global OTEC, a UK-based startup, is aiming to revolutionize energy production for tropical island nations by utilizing a century-old technology known as Ocean Thermal Energy Conversion (OTEC). OTEC, conceived in 1881, captures heat from surface water, uses it to heat fluids with a low boiling point, and then utilizes the resulting steam to drive turbines, generating electricity. What sets OTEC apart is its ability to provide consistent and continuous electricity production, unlike many other renewable energy sources.
Despite its immense potential, OTEC has faced challenges such as technological barriers, insufficient funding, and competition from cheaper renewable alternatives. Currently, only two OTEC plants are operational globally, contributing a modest 100kW each to the grid. However, Global OTEC aims to address one of the major hurdles to large-scale adoption by designing its commercial-scale OTEC plant, called Dominique, to be modular and cost-effective with a floating barge design. This innovative approach reduces the need for expensive undersea pipes, making the technology more accessible and affordable.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
🇯🇵 Japan and South Korea Forge Alliance for Joint Hydrogen and Ammonia Supply Network. Japan and South Korea are poised to establish a collaborative supply network for carbon-neutral fuels, including hydrogen and ammonia, with the announcement of this framework to be made by Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol on November 17 during the Asia-Pacific Economic Cooperation (APEC) meeting in the United States, as reported by the Nikkei business daily.
🇰🇵 North Korea Shuts Down Embassies Globally Amidst Suspected Financial Crisis. North Korea continues to close down a significant number of its embassies globally, raising suspicions of a persistent financial crisis. The latest closure reported is the embassy in Nepal, making it the fifth country from which North Korea has withdrawn its diplomatic presence in recent months, ostensibly for diplomatic restructuring. South Korean experts suggest that these closures indicate a worsening financial situation in North Korea, with sanctions impacting the nation's ability to acquire foreign currency. North Korea, facing challenges in feeding its population, often relies on foreign contributions and illicit activities to sustain itself.
iLevel With You 🏡
More topics for the average American household to consider…
🚀 SpaceX's Starlink Expected to Go Public in 2027. Billionaire investor Ron Baron believes that SpaceX will take its Starlink satellite internet service public around 2027, projecting a valuation between $250 billion and $300 billion at that time. Baron's firm, Baron Capital, holds about $1.7 billion worth of SpaceX stock. While SpaceX has discussed the potential of a Starlink IPO once the business stabilizes, the precise timing remains uncertain, with Elon Musk previously hinting that it might not occur until 2025 or later. SpaceX's valuation has already reached approximately $150 billion, and Starlink is a significant driver of the company's growth.
🏨 AI Transformation to Impact Airbnb More Than Hotels in the Near Term. Airbnb CEO Brian Chesky has emphasized that the company will benefit more from artificial intelligence (AI) than hotels, particularly in the near term, citing the digital nature of Airbnb's platform that allows for faster adaptation to AI advancements. Chesky noted that hotels are unlikely to see significant AI-driven changes in the next five years, but Airbnb will undergo a transformation. He highlighted how AI can enhance customer service, addressing challenges related to the complexity of policies by enabling the system to understand reservation history and issue resolution.
🚂 BNSF Railway and coal exporter reach a settlement in a legal dispute. BNSF Railway and coal producer Navajo Transitional Energy Co. (NTEC) have informed the Surface Transportation Board (STB) of a settlement in NTEC's claims regarding the need for more service from BNSF to export coal. They have requested the STB to postpone further action on the dispute until January 8, 2024, when they expect the settlement to be concluded. The specific terms of the settlement were not disclosed. NTEC had previously sought an emergency service order against BNSF, alleging that the railroad was not fulfilling its commitment to transport the desired volumes of coal from NTEC's Spring Creek mine in Montana to Westshore Terminal in British Columbia, posing challenges for ocean transport arrangements.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
💨 Ohio Steel Company Achieves Impressive 30% Reduction in Greenhouse Gas Emissions. Cleveland-Cliffs, an Ohio-based steel company, has achieved recognition from the Department of Energy for successfully surpassing its greenhouse gas emissions reduction goals for U.S. iron and steel operations. The reduction, which amounted to nearly one-third of emissions from a 2017 baseline by the end of last year, reflects a broader industry trend to combat pollution contributing to climate change. The steel industry, responsible for about 7% of global carbon dioxide emissions as of 2020, faces challenges in decarbonization due to its high heat and continuous operations. However, Cliffs' progress stands out, thanks in part to the opening of its direct reduction plant in Toledo in 2020, which uses a lower-carbon process for iron ore.
💰Concerns Arise About TQL's 'Offsetting' Practices Impacting Carrier Payments. Several carriers have come forward with complaints about Total Quality Logistics (TQL) withholding payments for loads without clear reasons. The issue stems from language in TQL's carrier contract that allows them to "offset" cargo claims, effectively giving them the power to withhold payment indefinitely. Carriers are now speaking out against this practice, with some considering a class-action lawsuit. This situation highlights ongoing challenges in the freight brokerage industry, where carriers often face complex contracts and disputes over payments.
😬 UAW Workers at GM's Flint Plant Narrowly Reject New Labor Agreement. Members of the United Auto Workers (UAW) union at General Motors' Flint assembly plant in Michigan have narrowly rejected a proposed contract with the automaker, with 51.8% of the votes cast against the deal. This vote indicates that the approval of the contract, which would significantly raise costs for GM, is not guaranteed. Workers at GM's other plants are expected to vote on the agreement in the coming weeks, and so far, about 58% of workers across the company's various facilities have voted in favor of the deal. This vote comes after the UAW reached tentative agreements with the Detroit Three automakers to end a costly strike. The proposed UAW agreement with GM includes a 25% increase in the base wage through April 2028 and cumulative raises in the top wage.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 22, 2024, from iLevel Logistics Inc.