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Auto manufacturing woes sink P.A.M. Transportation’s Q2

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P.A.M. Transportation Services (NASDAQ: PTSI) on Thursday reported a net loss of $823,000, 14 cents per share, which includes investments in equity securities. Excluding the investments, the dry-van truckload (TL) carrier lost 43 cents per share. Analysts’ estimates were for a profit of 15 cents per share.

The Tontitown, Arkansas-based carrier reported a 30% year-over-year decline in total revenue to $93 million as truck loads were down 26% and revenue per mile excluding fuel fell 7%. Revenue per truck per week was 23% lower in the quarter at $2,700. The company’s TL division posted a 104% operating ratio, 1,690 basis points worse year-over-year.

P.A.M. Transportation’s key performance indicators

COVID-19-related shutdowns in the auto manufacturing sector, 45% of P.A.M. Transportation’s revenue, were the primary reason for the earnings degradation.

“Our second quarter results reflect the significant financial impact of the temporary winding down of operations by our three largest manufacturing customers in response to COVID-19, with April and May bearing the brunt of that impact with a combined operating loss of $4.6 million during those two months,” stated CFO Allen West.

The company redeployed equipment into the spot market, which it blames for “lower rates” and an increase in empty miles. P.A.M. Transportation’s deadhead percentage increased 500 basis points in the quarter to 11.8%.

The carrier said it saw “normalized levels of profitability” in June as automotive manufacturing came back online, allowing its operating ratio to improve to the low-90% range in June.

“An additional hurdle we faced throughout most of the quarter was that a significant portion of our trailer fleet was loaded with freight that we were unable to deliver due to various receivers being shut down due to COVID-19, essentially removing the trailer from our available pool,” continued West.

The company took further cost actions in April and May, including the furlough and termination of employees.

P.A.M. Transportation ended the quarter with $12.5 million outstanding on its $60 million revolver and $25.7 million in marketable equity securities holdings. The company plans to maintain an average truck fleet age of 1.5 years.

No balance sheet update was provided with the company’s earnings report. The company includes a balance sheet with its quarterly 10-Q filing with the U.S. Securities and Exchange Commission, typically two weeks after its quarterly earnings results are released.

“With the return of automotive production, the increase in general economic activity as we approached the end of the second quarter, and cost reductions recently implemented which have yet to be fully realized, we believe that we are well positioned for a strong recovery as the remainder of the year progresses,” West concluded.

Chairman Matthew Moroun stepped in as interim CEO in May when Dan Cushman retired after 11 years in the role. The announcement came as the hauler was struggling to deal with the second auto production shutdown in less than a year as a result of the pandemic; the first being a six-week strike by the United Auto Workers at its largest customer, General Motors (NYSE: GM).

The Moroun family is the largest shareholder of PTSI’s shares, owning 68% of the company’s stock at the close of 2019. The family patriarch, Manuel “Matty” Moroun, died at the age of 93 on July 13.

Click for more FreightWaves articles by Todd Maiden.

Source: https://www.freightwaves.com/news/auto-manufacturing-woes-sink-pam-transportations-q2

Aerospace

‘Taiwan must secure a strategic position in space industry’s supply chain’: president

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SEOUL, South Korea — Taiwanese President Tsai Ing-wen said Sept. 14 the country “must secure a strategic position in the space industry’s supply chain” by leveraging its competitive edge in semiconductor and precision engineering. To that end, Taiwan’s leader called for cooperation between government, the private sector and academia to launch a “local team dedicated to manufacturing satellites and ground station equipment as soon as possible.”

Tsai made the remark during a visit to the National Space Organization (NPSO), a state-run space technology developer, at the Hsinchu Science Park, according to Taiwan News and other local media outlets.

She said it’s important for Taiwan to find “a niche [in the supply chain] with a strategic significance” and the government will support the move legally and financially, referring to the legislation of the Space Development Act in May and the 25.1 billion New Taiwan dollars ($906 million) budget, which the government has set aside to invest in the local space sector by 2028.

“Every country in the world is racing against time to go to space,” The Epoch Times quoted Tsai as saying. “Tens of thousands of satellites are expected to be sent into low Earth orbit in the next decade, generating massive demand for satellite and ground equipment manufacturing. The next decade is very crucial as many nations are also planning to return to the moon and Taiwan must secure a more strategically significant position in the ‘New Space Age.’” 

Tsai expressed hope that NSPO Director-General Wu Jong-shinn, nicknamed “Uncle Rocket,” would be able to “rocket” Taiwan’s space technology into space. Wu, who took office Aug. 2, is a graduate of the University of Michigan, with a doctorate in aerospace engineering. Since his inauguration, according to Taipei Times, Wu has restructured the NSPO to focus on the development of satellite payloads, components and avionics.

Speaking about the NSPO’s plans, Wu said weather satellite Triton is scheduled to be launched next year, and it also plans to develop a second low Earth orbit communications satellite for the “Beyond 5G project,” set to be launched in 2025 or 2026.


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Source: https://spacenews.com/taiwan-must-secure-a-strategic-position-in-space-industrys-supply-chain-president/

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Aerospace

‘Taiwan must secure a strategic position in space industry’s supply chain’: president

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SEOUL, South Korea — Taiwanese President Tsai Ing-wen said Sept. 14 the country “must secure a strategic position in the space industry’s supply chain” by leveraging its competitive edge in semiconductor and precision engineering. To that end, Taiwan’s leader called for cooperation between government, the private sector and academia to launch a “local team dedicated to manufacturing satellites and ground station equipment as soon as possible.”

Tsai made the remark during a visit to the National Space Organization (NPSO), a state-run space technology developer, at the Hsinchu Science Park, according to Taiwan News and other local media outlets.

She said it’s important for Taiwan to find “a niche [in the supply chain] with a strategic significance” and the government will support the move legally and financially, referring to the legislation of the Space Development Act in May and the 25.1 billion New Taiwan dollars ($906 million) budget, which the government has set aside to invest in the local space sector by 2028.

“Every country in the world is racing against time to go to space,” The Epoch Times quoted Tsai as saying. “Tens of thousands of satellites are expected to be sent into low Earth orbit in the next decade, generating massive demand for satellite and ground equipment manufacturing. The next decade is very crucial as many nations are also planning to return to the moon and Taiwan must secure a more strategically significant position in the ‘New Space Age.’” 

Tsai expressed hope that NSPO Director-General Wu Jong-shinn, nicknamed “Uncle Rocket,” would be able to “rocket” Taiwan’s space technology into space. Wu, who took office Aug. 2, is a graduate of the University of Michigan, with a doctorate in aerospace engineering. Since his inauguration, according to Taipei Times, Wu has restructured the NSPO to focus on the development of satellite payloads, components and avionics.

Speaking about the NSPO’s plans, Wu said weather satellite Triton is scheduled to be launched next year, and it also plans to develop a second low Earth orbit communications satellite for the “Beyond 5G project,” set to be launched in 2025 or 2026.


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Source: https://spacenews.com/taiwan-must-secure-a-strategic-position-in-space-industrys-supply-chain-president/

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Ecommerce

Logistics startup Stord raises $90M in Kleiner Perkins-led round, becomes a unicorn and acquires a company

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When Kleiner Perkins led Stord’s $12.4 million Series A in 2019, its founders were in their early 20s and so passionate about their startup that they each dropped out of their respective schools to focus on growing the business.

Fast-forward two years and Stord — an Atlanta-based company that has developed a cloud supply chain — is raising more capital in a round again led by Kleiner Perkins.

This time, Stord has raised $90 million in a Series D round of funding at a post-money valuation of $1.125 billion — more than double the $510 million that the company was valued at when raising $65 million in a Series C financing just six months ago.

In fact, today’s funding marks Stord’s third since early December of 2020, when it raised its Series B led by Peter Thiel’s Founders Fund, and brings the company’s total raised since its 2015 inception to $205 million.

Besides Kleiner Perkins, Lux Capital, D1 Capital, Palm Tree Crew, BOND, Dynamo Ventures, Founders Fund, Lineage Logistics and Susa Ventures also participated in the Series D financing. In addition, Michael Rubin, Fanatics founder and founder of GSI Commerce; Carlos Cashman, CEO of Thrasio; Max Mullen, co-founder of Instacart; and Will Gaybrick, CPO at Stripe, put money in the round. Previous backers include BoxGroup, Susa Ventures, Dynamo, Revolution and Rise of the Rest Seed Fund, among others.

Founders Sean Henry, 24, and Jacob Boudreau, 23, met while Henry was at Georgia Tech and Boudreau was in online classes at Arizona State (ASU) but running his own business, a software development firm, in Atlanta.

Over time, Stord has evolved into a cloud supply chain that can give companies a way to compete and grow with logistics, and provides an integrated platform “that’s available exactly when and where they need it,” Henry said. Stord combines physical logistics services such as freight, warehousing and fulfillment in that platform, which aims to provide “complete visibility, rapid optimization and elastic scale” for its users.

About two months ago, Stord announced the opening of its first fulfillment center, a 386,000-square-foot facility, in Atlanta, which features warehouse robotics and automation technologies. “It was the first time we were in a building ourselves running it end to end,” Henry said.

And today, the company is announcing it has acquired Connecticut-based Fulfillment Works, a 22-year-old company with direct-to-consumer (DTC) experience and warehouses in Nevada and in its home state.

With FulfillmentWorks, the company says it has increased its first-party warehouses, coupled with its network of over 400 warehouse partners and 15,000 carriers.

While Stord would not disclose the amount it paid for Fulfillment Works, Henry did share some of Stord’s impressive financial metrics. The company, he said, in 2020 delivered its third consecutive year of 300+% growth, and is on track to do so again in 2021. Stord also achieved more than $100 million in revenue in the first two quarters of 2021, according to Henry, and grew its headcount from 160 people last year to over 450 so far in 2021 (including about 150 Fulfillment Works employees). And since the fourth quarter is often when people do the most online shopping, Henry expects the three-month period to be Stord’s heaviest revenue quarter.

For some context, Stord’s new sales were up “7x” in the second quarter of 2020 compared to the same period last year. So far in the third quarter, sales are up almost 10x, according to Henry.

Put simply, Stord aims to give brands a way to compete with the likes of Amazon, which has set expectations of fast fulfillment and delivery. The company guarantees two-day shipping to anywhere in the country.

“The supply chain is the new competitive battleground,” Henry said. “Today’s buying expectations set by Amazon and the rise of the omni-channel shopper have placed immense pressure on companies to maintain more nimble and efficient supply chains… We want every company to have world-class, Prime-like supply chains.”

What makes Stord unique, according to Henry, is the fact that it has built what it believes to be the only end-to-end logistics network that combines the physical infrastructure with software.

That too is one of the reasons that Kleiner Perkins doubled down on its investment in the company.

Ilya Fushman, Stord board director and partner at Kleiner Perkins, said even at the time of his firm’s investment in 2019, that Henry displayed “amazing maturity and vision.”

At a high level, the firm was also just drawn to what he described as the “incredibly large market opportunity.”

“It’s trillions of dollars of products moving around with consumer expectation that these products will get to them the same day or next day, wherever they are,” Fushman told TechCrunch. “And while companies like Amazon have built amazing infrastructure to do that themselves, the rest of the world hasn’t really caught up… So there’s just amazing opportunity to build software and services to modernize this multitrillion-dollar market.”

In other words, Fushman explained, Stord is serving as a “plug and play” or “one stop shop” for retailers and merchants so they don’t have to spend resources on their own warehouses or building their own logistics platforms.

Stord launched the software part of its business in January 2020, and it grew 900% during the year, and is today one of the fastest-growing parts of its business.

“We built software to run our logistics and network of hundreds of warehouses,” Henry told TechCrunch. “But if companies want to use the same system for existing logistics, they can buy our software to get that kind of visibility.”

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Source: https://techcrunch.com/2021/09/14/logistics-startup-stord-raises-90m-in-kleiner-perkins-led-round-becomes-a-unicorn-and-acquires-another-company/

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Aerospace

Pandemic, changing industry affecting satellite manufacturer supply chains

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NATIONAL HARBOR, Md. — The pandemic and resulting supply chain issues have forced satellite manufacturers to adopt new approaches, some of which they plan to maintain in a post-pandemic world.

Shortages of chips and other electronics have had wide-ranging effects on the economy, affecting sectors from consumer electronics to automobiles. Space systems have also felt the effects of those supply chain disruptions, manufacturers said during a panel discussion at the Satellite 2021 conference here Sept. 8.

Those companies say they have little influence with suppliers based on demand alone. “Space is dwarfed, in terms of volume, compared to the car industry or anything else,” said Jean Marc Nasr, executive vice president and head of space systems at Airbus.

Instead, companies say they’re working more closely with suppliers, and at earlier phases of programs, to ensure they will get the components they need on schedule. It’s also caused companies to reconsider make-versus-buy decisions, in some cases moving more work in-house.

However, companies are also deciding to work with other suppliers, in some cases other major manufacturers. Frank DeMauro, vice president and general manager of tactical space systems at Northrop Grumman, noted his company has significant capabilities to develop power electronics for spacecraft, but decided to go to Airbus for those components for the HALO module for NASA’s lunar Gateway. “That was the best solution we could offer our customer,” he said.

However, pandemic-related disruptions to the supply chain are not the only issue manufacturers are facing. The types and numbers of satellites they produce have forced them to reexamine the suppliers they work.

“As we move into this networked world, with all-digital software-defined satellites, our supply base is changing,” said Ryan Reid, president of Boeing Commercial Satellite Systems International. “It introduces new dimensions to the supply chain and partnerships.”

Constellations had new pressure on the supply chain. “When you do a constellation, the relationship with the supply chain is even more important, because you have to have a stable relationship over a long period of time,” said Nasr. Airbus is part of the OneWeb Satellites joint venture producing satellites for the OneWeb constellation. “We have to be very close to our suppliers.”

By and large, though, manufacturers played down impacts on the supply chain caused by the pandemic or other changes in the market. “We’ve had strategic approaches on the supply base for a long time,” said Chris Johnson, senior vice president of space at Maxar Technologies. “COVID has probably modified that slightly because of the market response, but as we look at what our growth opportunities of the future looks like, we’re engaged in conversations with the supply base.”

The pandemic has altered other ways of doing business among satellite manufacturers, some of which will persist after it ends. Much of that has revolved around hiring and retaining employees, including remote work and bigger roles in projects.

“The two key words have been agility and flexibility,” said Emmanuel Terrasse, vice president of Thales Alenia Space. “It’s needed to respond to an uncertain world, and to the human resource challenges. Our younger teams want agile ways of working. They don’t want the traditional way with strong management controlling everything.”

Brent Abbott, chief executive of smallsat manufacturer NanoAvionics U.S., said offering flexibility to employees had paid dividends. “They’ve put in more hours and they’re happy about it.”


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Source: https://spacenews.com/pandemic-changing-industry-affecting-satellite-manufacturer-supply-chains/

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