🚂 Rail Safety Revolt
Good morning! Just as Christopher Columbus embarked on his historic journey to discover new trade routes, today's supply chain professionals continue to explore innovative strategies to meet the ever-evolving demands of global commerce. So, let's set sail into the world of supply chain exploration and discovery on this Columbus Day!
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Rail Unions Push for Safety Scrutiny of Remote Control Operations in Wake of Worker Fatality
Some railroad unions are calling for increased scrutiny of the safety of remote control operations used by major railroads for moving locomotives in rail yards. The recent death of a rail worker who was struck by a train has prompted concerns about the visibility and safety of remote control operators. Unions argue that railroads prioritize profits over-investing in technology to protect workers, highlighting the need for improved safety regulations in the industry.
The National Transportation Safety Board (NTSB) is currently investigating the incident, which occurred when a remote control operator could not see the approaching worker. While the operator was following federal and company rules, the NTSB is focusing on safety procedure training and awareness. Unions emphasize that remote control operators have relatively little training compared to traditional engineers, raising concerns about safety when using remote control trains both inside and outside of rail yards. Despite safety advisories, there has been limited progress in enacting stronger railroad safety regulations at the legislative level.
Check out today’s featured article from AP News to read about the concerns of railroad unions after this tragedy and what it could mean for regulators.
Featured Article
“Most of the reaction to the predawn death of a rail worker who mistakenly stepped in front of two CSX locomotives last month has focused on whether the 19-year veteran should have seen the train coming and not on the actions of a worker who could hardly see the front of the locomotives he or she was operating using a remote control.”
Politics & Trade
US Political Challenges Pose Threat to Logistics and Trade Talks
The ongoing political instability in the United States could potentially disrupt logistics and trade talks in the lead-up to Christmas, causing concerns for buyers. Recent events, including a narrowly averted government shutdown and the replacement of Speaker Kevin McCarthy, have created uncertainty, leaving critical spending agreements and trade discussions in limbo. Patrick McHenry, the new Speaker, has put the House in recess, raising questions about his authority. This situation has made it increasingly challenging to reach an agreement to prevent another potential government shutdown scheduled for November 17, which could impact trade negotiations.
Analysts suggest that this political turmoil could affect buyers in the run-up to Christmas, underscoring the importance of supply chain professionals taking control over aspects they can influence. The potential disruption could further delay the long-desired trade agreement between the UK and the US, affecting UK exporters and their logistics partners. The uncertainty also extends to issues such as government bills, customs administration, and trade monitoring, which could stall due to a shutdown. As a result, retailers and buyers are encouraged to proactively manage their logistics networks and engage in effective communication with carriers and consumers to navigate potential disruptions and manage customer expectations.
Peak Season & Deliveries
Tesla Slashes Model 3 and Model Y Prices in the U.S. Following Declining Car Deliveries
Tesla has reduced the prices of several Model 3 and Model Y variants in the United States after the company reported lower-than-expected third-quarter deliveries. The starting price for the Model 3 is now $38,990, down from $40,240, and the long-range Model 3 now costs $45,990, down from $47,240. Additionally, the Model 3 Performance is now priced at $50,990, reduced from $53,240, while the Model Y Performance starts at $52,490, down from $54,490. These price cuts come as Tesla aims to boost demand amid concerns about slowing consumer spending and increasing competition in the electric vehicle market.
Tesla frequently adjusts its car prices, particularly in key markets like the U.S. and China. The recent price reductions follow Tesla's third-quarter delivery figures of 435,059 vehicles, which fell short of analyst expectations and marked a decrease from the previous quarter. Tesla attributed the decline to factory upgrades that led to production site downtime. Despite these challenges, Tesla's CEO, Elon Musk, has expressed the company's goal of pursuing higher sales volume over larger profit margins, and this approach has contributed to Tesla's stock performance, which has seen shares rise by over 100% this year. Tesla aims to deliver 1.8 million vehicles by the end of this year.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
📉 US Trade Deficit Hits 3-Year Low in August. In August, the US trade deficit reached its lowest point since 2020, dropping by 9.9% to $58.3 billion due to reduced American demand for foreign goods and increased exports. This decline may be linked to rising borrowing costs, indicating weaker domestic demand for goods. While exports saw a boost, mainly in petroleum shipments, the strong US dollar could hinder this trend by making American products pricier for international buyers. This data is likely to impact economists' predictions for third-quarter GDP, as net exports had a relatively neutral effect on GDP in the previous quarter.
🇨🇳 China's Heavy-Duty Truck Market's Path to 2030 and Beyond. Over the past decade, China's heavy-duty truck (HDT) market experienced significant growth but saw a decline in sales from 1.6 million vehicles in 2020 to 700,000 in 2022. However, the Chinese HDT industry is expected to rebound and remain prominent in the commercial market. The future of the industry in 2030 and beyond will be shaped by four key trends: premiumization, electrification, autonomous driving, and a shift toward solutions and services. These trends will focus on improving HDT reliability, incorporating electric vehicles, adopting autonomous driving technology, and leveraging data-driven solutions in the industry.
iLevel With You 🏡
More topics for the average American household to consider…
⛽️ Georgia Governor Kemp Extends Gas and Diesel Tax Suspension. Georgia Governor Brian Kemp has extended the suspension of state taxes on gasoline and diesel through at least November 11, a move originally introduced during his reelection campaign. This decision, which has bipartisan support, has led to an estimated $1.7 billion revenue loss from March 2022 to January 2023. Kemp argues that this tax relief helps Georgians deal with inflation, although some economists believe it may contribute to inflation. Despite the revenue loss, Georgia's strong financial position, including a substantial surplus and rainy day account, allows the state to cover the budget shortfall, providing drivers with lower gasoline prices, although federal taxes still apply.
🔋Auto Workers' Strike in the US: Beyond Wages - The Battle Over EVs and Ideological Conflict. The ongoing auto workers' strike in the United States goes beyond wage disputes and is rooted in concerns related to the 2009 Obama-era deal that removed cost-of-living adjustments, as well as resistance to President Biden's ambitious plans for Chinese battery-powered vehicles. While some support these plans, there is increasing unrest among those who are apprehensive about a hurried transition to electric vehicles (EVs), particularly due to concerns about China's role in battery production and supply chain issues. This clash over EV mandates, which impose electric car adoption, is evolving into a significant political issue, reflecting a broader ideological conflict between those advocating for comprehensive societal control and those emphasizing individual freedom. Amidst the push for EVs, there are growing concerns about the practicality and economic feasibility of this transition.
📦 Amazon Hit With Antitrust Lawsuit Over Fulfillment Practices and Rising Fees. Amazon is currently facing an antitrust lawsuit filed by the Federal Trade Commission (FTC) and 17 state attorneys general, accusing the company of engaging in anticompetitive practices that harm both sellers and consumers. The lawsuit specifically targets Amazon's fulfillment services, alleging that rising fulfillment fees have pressured sellers into using Amazon exclusively, stifling competition. One key allegation is that Amazon consistently increased fees, including fulfillment fees, by approximately 30% from 2020 to 2022, leading to higher prices for consumers on other online platforms.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🚛 Knight-Swift Explores Cummins Renewable Gas Engine in Innovative Testing. Major carriers in the United States, such as Knight-Swift and Werner Enterprises, are taking steps to reduce carbon dioxide emissions as the country shifts toward alternative energy sources. Knight-Swift aims to cut its carbon dioxide emissions by 50% by 2035, aligning with California's regulations and national emissions standards. The U.S. Environmental Protection Agency (EPA) regulations are also driving Original Equipment Manufacturers (OEMs) to adopt new environmental standards. Although there was a congressional effort to ban a new emissions reduction for heavy-duty trucks, it was vetoed by President Joe Biden in June.
🚗 Consumer Confidence in Fully Automated Self-Driving Vehicles Declines, Reports J.D. Power. Consumer confidence in fully automated self-driving vehicles has declined for a second year, with the readiness index score dropping to 37 out of 100, according to J.D. Power's 2023 U.S. Mobility Confidence Index (MCI) Study. The decline is attributed to factors such as low comfort levels with riding in fully automated vehicles and a lack of general knowledge about AV technology, exacerbated by media coverage of robotaxi and testing failures. However, consumer confidence is higher in regions with more exposure to AV testing and deployments, highlighting the importance of experience in promoting adoption.