Market Overview

Today's Pickup: Companies Ignore AV Progress At Own Peril

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Today's Pickup: Companies Ignore AV Progress At Own Peril

Good day,

There is plenty of public and private-sector resistance to autonomous vehicles. However, those who downplay its progress and potential do so at their own risk. So writes Chandrashakar Natarajan, a former top logistics executive at retailer Target Corp. and one of the industry's leading futurists. In a recent article in the Council of Supply Chain Management Professionals' CSCMP's Supply Chain Quarterly, Natarajan said AVs offer compelling solutions to ever-worsening and universal problems. AV utilization will strengthen data collection and analysis, help alleviate capacity challenges, reduce high labor costs, improve delivery speed and efficiency, and make it easier for people to get around and to do so safely, he said.

For example, AVs could help disabled employees to get to work, thus expanding the labor pool for warehousing and other supply chain jobs, Natarajan said. Companies whose philosophies are to ignore or degrade the impact of AVs will forfeit their chances to be first-movers in the field, he said. In addition, they risk losing seats at the influence table as industry and government hash out a sustainable blueprint for AV use, he added.

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Did you know?

Currently U.S. has less than 170,000 miles of rail track. In 1916, it had more than 254,000 miles.

In other news:

Truck drivers on shortlist for AI disruption

A quarter of U.S. jobs, including those held by short-haul truck drivers, will be severely disrupted as artificial intelligence accelerates the automation of existing work, according to a Brookings Institution report. (Associated Press)

The race is on for small flying vehicle dominance

Boeing is competing with arch-rival Airbus and other firms to introduce small self-flying vehicles capable of vertical takeoff and landing. (VentureBeat)

Blockchain on the march, report says

According to consultancy Deloitte, blockchain is expected to grow from a $0.2 billion industry in 2016 to a $2.3 billion industry by 2021. (ThomasNet)

If you think your commute stinks?:

Nearly 100,000 U.K. commuters have relocated because their rail commute was so bad, according to a study by a consumer group. (Telegraph U.K.)

Not much bang for Georgia's infrastructure buck

Georgia's infrastructure has improved only slightly in spite of a measure that raised nearly $1 billion annually for the state's roads and bridges a few years ago, according to a report from the Georgia Section of the American Society of Civil Engineers. (Moultrie Observer)

Quotable:

"In our risk averse industry, we cannot even calculate the level of risk currently at play, nor predict the point at which the entire system will break. It is unprecedented."

—Leaders of the pilots, flight attendants and air traffic controllers unions on the impact of the partial U.S. government shutdown on the nation's air transport system.

A final thought:

U.S. airlines had to be dragged kicking and screaming into deregulation. And with good reason. They knew their profit-challenged models of high labor and equipment costs, weather-related disruptions, and the expense of regular aircraft maintenance would be chopped to pieces in a non-tariff world. Forty years and untold bankruptcies and closures later, the airlines finally have the upper hand. How? By the only thing that could work: Massive consolidation. There are now effectively four airlines plying the world's biggest market. No slight to JetBlue, Alaska, Frontier et al, but if you are a B2B traveler or even a leisure customer looking for nationwide flight density and options, you have Delta, Southwest, American and United Continental. Period.

Small wonder that Warren Buffett owns shares in all four, and that Vanguard's PrimeCap fund, one of the top-performing mutual funds over the past 20 years, counts two--Southwest and United Continental--among its top 10 holdings. As parcel, rail, and third-party logistics providers have discovered, market power can counteract a lot of deficiencies. That said, people wringing their hands about air carrier concentration need to step back and think about what a great deal deregulation has been for consumers, just as Congress had intended. According to a study commissioned by trade group Airlines for America, the average flight from Los Angeles to Boston in 1941 cost $4,539.24 per person in 2017 dollars. Today, a non-stop roundtrip on the same route could be had, depending on time of year and the available deals, for $300-$500 per head.

Hammer down everyone!

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