May 17, 2020

UPS figures point toward US economic growth

Charles Clowdis
Kurt Kuehn
Logistics
next-day
Freddie Pierce
2 min
An increase in UPS’ next-day shipping could mean the US economy is showing positive growth
Statistics from UPS, a worldwide leader in shipping and logistics, show that the United States economy could finally be starting to show some positive...

Statistics from UPS, a worldwide leader in shipping and logistics, show that the United States economy could finally be starting to show some positive growth.

Average daily volume for UPS’ next-day air packages “grew at a mid-single digit rate,” according to UPS. Growth in next-day shipping, a premium service, is a sign of economic confidence, according to UPS CFO Kurt Kuehn.

“We’ve been pleased with the package component of our next-day air service, and that’s really reflecting some increased velocity of the core economy,” Kuehn told Bloomberg.

“In the U.S. domestic segment, we expect average daily volume to increase approximately 2 percent for the second quarter with continued strengthening in the second half of 2011,” Kuehn said. “For the full year, next-day air and ground are expected to grow at a similar pace.”

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The growth indicates that businesses and consumers are more willing to pay a premium for faster shipping, which could indicate an increase in discretionary spending, a leading indicator of economic growth.

Charles Clowdis, managing director of transportation advisory services at IHS Global Insight, told Bloomberg that the U.S. is in a “consistent and steady expansion period,” and that UPS’ figures show “an excellent sign there is confidence in the economy.”

“People are willing to pay up for faster, premium service even though higher energy prices have resurfaced this year,” Clowdis said.

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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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