DB Schenker shuts down its U.S. BAX Global air fleet
With competition rising and demand falling, global shipping leader DB Schenker will cut ties with its United States air fleet by shutting down its cargo hub in Toledo, Ohio.
“As a result of the prolonged recession and spiking fuel prices, more and more of our customers are opting for expedited ground-based solutions instead of domestic air freight,” Schenker CEO Heiner Murmann said.
Schenker will continue to operate in North America, but will no longer fly its own planes after shutting down its BAX Global air fleet. The company will focus on smaller customers who need specialized transportation management services.
SEE OTHER TOP AIR FREIGHT STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK
DB Schenker had operated from Toledo Express Airport for about 20 years, and the loss of the cargo hub will cost the area about 700 jobs, most of which are part-time. Paul Toth, CEO of the Toledo-Lucas County Port Authority, the airport’s operator, expressed disappointment in the decision.
Several cargo companies operate of the Toledo Express Airport, but BAX Global was far and away the largest company, flying to cities in the United States and overseas. The BAX Global air fleet accounts for less than 10 percent of DB Schenker’s business in the Americas, and will be phased out in the coming weeks.
As the freight logistics subsidiary of Deutsche Bahn, DB Schenker is one of the largest worldwide logistics providers. The German-based company retains a strong presence in the European market.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany