Maritime Merger Ahoy! 🚢
Good morning! Welcome to "The Workday Dash," your go-to source for the latest updates in the world of supply chain and logistics. On this National Maritime Day, we embark on a journey to explore the vital role played by our maritime industry in global trade and commerce. As we celebrate the legacy and contributions of seafarers and maritime professionals, we'll dive into the key developments, challenges, and innovations shaping the maritime sector.
So, grab your lifebuoy and join us as we set sail into the fascinating world of maritime logistics. ⚓️🛳
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Maritime Partners Expands Portfolio with Acquisition of U.S. Marine Management LLC from Maersk Line, Limited
Louisiana-based Maritime Partners, specializing in maritime financing solutions, announced that one of its managed funds successfully acquired U.S. Marine Management LLC (USMMI) from Maersk Line, Limited on September 20, 2023. USMMI, based in Norfolk, Virginia, operates U.S. flag vessels, including maritime support and tanker vessels, under charter agreements with the U.S. Navy's Military Sealift Command. USMMI also handles the operation and maintenance of U.S. government-owned vessels and recently secured an operating agreement for the U.S. Maritime Administration’s Tanker Security Program. As part of this agreement, USMMI plans to acquire an additional medium-range tanker in the fourth quarter of 2023. The company will continue its operations as USMMI with no significant changes to its management team.
This acquisition marks Maritime Partners' expansion into new business areas, adding USMMI's long-term contracts and strong customer base to its existing portfolio of maritime assets. Maersk Line, Limited's decision to sell USMMI came after recognizing that the current ownership structure limited USMMI's growth potential and competitiveness. The deal received regulatory approvals and Maersk Line, Limited will maintain ownership of 20 U.S. flag-registered containerships and three roll-on/roll-off vessels supporting government and humanitarian missions worldwide. This acquisition follows Maritime Partners' previous agreement to acquire American Tanker Holding Company, diversifying its focus from brown water assets to include ocean-going Jones Act tankers.
Check out today’s featured article from Marine Link to learn more about what the Louisiana-based company did to acquire USMMI from Maersk Line. Will this be an upper hand in the future of Maritime Partners?
Featured Article
Maritime Partners Acquires Maersk's USMMI | Marine Link
“Maritime Partners, a Louisiana-based provider of maritime financing solutions primarily focused on Jones Act vessels, announced that on September 20, 2023, one of its managed funds acquired Norfolk, Va.-based U.S. Marine Management LLC (USMMI) from Maersk Line, Limited.”
Safety & Transportation
FRA Allocates $1.4 Billion for Rail Improvements Across 35 States, Including Ohio
The Federal Railroad Administration (FRA) has allocated over $1.4 billion in funding from the Bipartisan Infrastructure Law to support 70 rail improvement projects across 35 states and Washington, D.C. Ohio is among the recipients, securing three awards, with the largest portion, over $16.2 million, dedicated to rehabilitating bridges and enhancing tracks along around 180 miles of the Kanawha River Railroad (KNWA). This initiative, part of the North Central Appalachia Rail Enhancement and Rail Corridor Preservation Project, aims to increase speed, safety, reliability, and capacity for the rail line in rural regions of West Virginia and Ohio, facilitating the transportation of essential goods, including chemicals and hazardous materials.
The decision to allocate these funds comes following a derailment incident in East Palestine, Ohio, on February 3, where toxic chemicals were spilled, resulting in environmental concerns and affecting local residents. President Joe Biden has ordered the Federal Emergency Management Agency (FEMA) to designate a federal disaster recovery coordinator to oversee long-term recovery efforts. To address rail safety concerns, Ohio's U.S. Senators and House of Representatives members have introduced separate legislation. This funding from the FRA is the largest ever awarded for rail safety and rail supply chain upgrades through the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program, with a focus on rural communities.
Space & Supply Chain
U.S. Space Force to Collaborate on Supply Chain Resilience Strategy with International Partners
U.S. Space Force officials are set to engage in discussions with industry leaders and international partners next month to establish a strategy for supply chain resiliency. Led by the Space Systems Command (SSC), the event, known as a reverse industry day, will involve representatives from the UK, Canada, Australia, New Zealand, France, Germany, and Japan. Participants will have the opportunity to share their insights regarding supply chain challenges and opportunities. The event, which takes place on October 25 and 26 in Chantilly, Virginia, aims to foster collaboration and tackle shared supply chain concerns among international partners.
The reverse industry day approach emphasizes gathering feedback from stakeholders before setting requirements, and SSC has been employing this format since early last year. The event will feature presentations and discussions at the unclassified level, including a "secret" intelligence briefing on global supply chain threats. The COVID-19 pandemic heightened concerns about vulnerabilities in the global supply chain, prompting a need for greater collaboration and investment in the space sector's supply base. A 2022 report called for enhanced clarity on the supply chain's health, strengths, and vulnerabilities and recommended increased collaboration with international partners to enhance collective capability and interoperability.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
🇲🇽 Mexico's Ambitious Plan Focuses on US Energy Exports and a Chip Supply Chain Role. Sonora, a state in northern Mexico, aims to export clean energy to California and Arizona from a massive solar farm project, while also seeking a role in the chip supply chain due to TSMC's $40 billion investment in Arizona. The "Plan Sonora" solar energy project, which began with the inauguration of the Puerto Penasco solar plant in February, intends to improve domestic connectivity to Mexico's national grid and export clean energy to the United States, particularly for semiconductor and electric vehicle industries. Sonora Governor Alfonso Durazo expressed interest in meeting with Foxconn, an Apple supplier, to discuss possible semiconductor plant investments in the state. Additionally, he highlighted the potential for a TSMC chip plant in Sonora, emphasizing the area's strategic advantage in attracting investment.
📦 Alibaba's Logistics Unit, Cainiao, Plans Hong Kong IPO Amid Corporate Restructuring. Alibaba plans to list its logistics unit, Cainiao, on the Hong Kong Stock Exchange as part of a significant corporate restructuring. This move is part of Alibaba's broader strategy to split into six business units, allowing most of them to raise external funds and go public. Cainiao is the first to officially file for an IPO under this new structure. Although the listing has been approved by the Hong Kong Stock Exchange, Alibaba noted that there is no guarantee it will proceed. Cainiao, founded in 2013, is a logistics network that facilitates deliveries for Alibaba's e-commerce platforms in China and abroad, with a focus on fast delivery times.
🇨🇦 Canadian Trucker Convicted of Attempting to Smuggle Over 50 Kilograms of Cocaine into the U.S. A Canadian trucker, Subeg Singh, was convicted by a federal jury on charges of possessing with the intent to distribute over 50 kilograms of cocaine. Singh's conviction followed a three-day trial held in Detroit. Evidence presented during the trial revealed that Singh attempted to transport more than 50 kilograms of cocaine across the US-Canadian border in a commercial truck in September 2021. Customs and Border Protection Officers stopped him at the Ambassador Bridge and discovered the drugs in the trailer. Singh has been in custody since his arrest in September 2021. He faces a mandatory 10-year prison sentence, with a maximum possible sentence of life imprisonment, and his sentencing is scheduled for January 9, 2024.
iLevel With You 🏡
More topics for the average American household to consider…
✈️ U.S. Regional Airlines Face Challenges in Pilot Hiring and Retention. U.S. regional airlines, including SkyWest Airlines, are struggling with a severe shortage of pilots, particularly captains. SkyWest Airlines, one of the largest regional operators, is currently short by approximately 1,200 pilots. The airline, which has around 4,300 pilots today, has faced challenges in maintaining its pilot workforce since the pandemic disrupted the industry. Demand for air service in smaller cities has grown as people moved from larger cities during the pandemic, exacerbating the pilot shortage issue for regional carriers. This shortage of captains is a widespread problem among U.S. regional airlines, with major airlines recruiting heavily from the regionals to fill their own pilot gaps. The shortage also extends beyond pilots to include air traffic controllers and support personnel. Regional airlines are working to address these challenges and create strategies to train and retain pilots and other essential personnel.
👩🏽💻 Apple’s Supply Chain Faces Climate Change Challenges. Apple, known for its commitment to environmental sustainability, is facing a significant challenge as its vast supply chain is located in regions highly vulnerable to the damaging effects of climate change. An analysis of Apple's publicly released supplier reports by Bloomberg Opinion reveals that many of its manufacturing facilities are located in areas where natural disasters are expected to intensify rapidly due to global warming. These areas are primarily in Asia, including countries like India, Indonesia, the Philippines, Malaysia, and Cambodia, which could face a drop in GDP due to climate change impacts. Floods, heatwaves, cyclones, and power cuts in these regions pose risks to Apple's supply chain, affecting production and increasing operational costs. Additionally, many of these areas rely heavily on fossil fuels for energy generation, making it challenging for Apple to meet its goal of achieving zero-carbon power by 2030. As carbon-based adjustment measures are introduced in various countries to address carbon leakage, Apple may face additional challenges in maintaining its supply chain's competitiveness. While Apple has made strides in reducing its own carbon footprint, the geographical concentration of its suppliers poses significant climate-related risks that the company must address to ensure the resilience of its supply chain.
🔥 Hyundai and Kia Recall 3.4 Million Vehicles in the U.S. Over Fire Risk Linked to Brake Control Module Leaks. Hyundai and Kia are recalling nearly 3.4 million vehicles in the U.S. due to the risk of engine compartment fires. The recall covers various car and SUV models from 2010 through 2019 and is related to potential brake control module leaks that can cause an electrical short leading to fires, even while the vehicles are parked. Owners have been advised to park the affected vehicles outside until repairs are completed. The automakers will replace the anti-lock brake fuse to address the issue, and notifications to owners will be sent out in November. The recall comes in response to reported fires and "thermal incidents," although no injuries or crashes have been reported. The Center for Auto Safety and others have raised questions about why the automakers are not addressing the root cause of the issue, and why it will take two months to notify owners by letter. NHTSA, however, stated that automakers can choose the remedy to fix a defect, and it will monitor the effectiveness of the repairs.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
📉 Logistics Firm Flexe Reduces Workforce by One-Third in Restructuring Effort. Seattle-based logistics provider Flexe has laid off approximately one-third of its workforce. While the company did not specify the exact number of affected employees, it confirmed the decision was made to navigate the changing economic environment in the logistics industry. Flexe, which reached a $1 billion valuation in 2022, offers asset-light logistics warehousing, transportation, and fulfillment services to retailers, including Ace Hardware, BJ’s Wholesale Club, Ralph Lauren, Staples, and Walmart. This workforce reduction follows similar moves by other logistics companies, including Flexport, Coyote Logistics, and Uber Freight, amid challenging conditions in the freight market.
👮🏼♀️ Kettering logistics firm enters administration with 730 jobs lost. Kettering-based KNP Logistics Group, the parent company of Knights of Old, has entered administration following a significant cyber attack in June that affected key systems, processes, and financial information. Approximately 730 employees will be made redundant due to the cyber attack's impact on KNP Logistics Group's financial position and its ability to secure additional investment and funding. The group's employees have been largely made redundant, with the exception of Nelson Distribution Limited, which has been sold, and a small group of staff retained to assist in winding down operations. Knights of Old, a 158-year-old haulage firm, is one of the UK's largest privately-owned logistics companies.
📀 Gartner Report Reveals 80% of Supply Chain Unaccounted for in Current Digital Decision Models. Gartner's research indicates that current digital models used by supply chain decision-makers often fail to capture up to 80% of the supply chain environment, resulting in incomplete views. This "digital-to-reality gap" undermines the potential benefits of digital trade-off analysis tools, such as what-if analysis and simulations. Surprisingly, Gartner found that using digital models for trade-off analysis led to slightly more bad decisions compared to not using them, suggesting that these tools are not delivering their intended improvements. Gartner suggests that a shift towards localized and cross-functional decision-making, combined with better digitization of supply chain processes, can lead to more effective decision support and improved outcomes.
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.