May 17, 2020

Japan's emergency measure should help supply chain

Japan
Supply Chain
earthquake
tsunami
Freddie Pierce
2 min
A natural disaster in China could cripple the global supply chain, according to the FM Global Supply Chain Risk Study
Some good news came out of Japan today, as an emergency budget procedure was passed by Japanese parliament to allow the spending of $50 billion on reco...

Some good news came out of Japan today, as an emergency budget procedure was passed by Japanese parliament to allow the spending of $50 billion on reconstruction efforts.

This government spending bill was expected, and it should help the recovery of the country’s supply chain. Such spending should also help the global supply chain, as Japan is a huge manufacturer of automotive and electronic components.

The next step is going to be the urging to pass a second extra budgetary measure, which is expected to require a lot more effort in order to pass. The $50 billion the Japanese government intends to spend initially on rebuilding its infrastructure and supply chain following the 9.0 earthquake and tsunami that crippled the economy pales in comparison to initial estimates of overall loss.

Total estimates throughout the affected Japanese regions range all the way up to $300 billion, meaning it’s going to take a lot more than $50 billion to repair the heavily effected prefectures like Iwate, Miyagi and Fukushima.

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A good idea might be to try and lure foreign investors to rebuild parts of the stricken Japanese countryside, but the nation’s prohibitively high corporate tax rate (second in the world, right behind the United States) could scare off any serious outside help.

Japanese Prime Minister Naoto Kan indicated that further spending will likely involve the issuance of even more debt. While that’s not ideal, the global supply chain is at risk, and failing to spend the proper amount on repairing an integral part of the world’s supply chain could further hurt Japan.

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Jun 21, 2021

Elon Musk's Boring Co. planning wider tunnels for freight

BoringCompany
supplychain
freight
elonmusk
2 min
Elon Musk’s tunnelling firm plans underground freight tunnels with shipping containers moved on “battery-powered freight carriers”, according to reports

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. 

Elon Musk Tweet

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

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