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More air cargo finds its sea legs during COVID-19

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Escalating airfreight transportation rates and capacity shortages out of China in recent months due to the coronavirus pandemic have led many shippers to try hybrid services that combine sea and air modes.

So-called “sea-air” services offered by some global freight forwarders and non-vessel-operating common carriers (NVOCCs) have been around for decades, but they tend to come and go depending on airfreight market conditions.

Mortan Bach, global chief commercial officer, Shipco Trasport (Courtesy photo)

The pandemic has spawned increased interest in moving freight from Asia by fast boat to Los Angeles where it is put on a plane to Europe. The new option has become more popular than the traditional routing through the Middle East, which involved an ocean leg to the United Arab Emirates’ Jebel Ali seaport, stripping the container and delivering the cargo to an airliner at the Dubai airport for transport to the destination city, according to logistics professionals.

“Sea-air is a reaction to lack of capacity and high rates,” said Morten Bach, global chief commercial officer for Shipco, a non-vessel carrier in Hoboken, New Jersey. “When air rates go up, sea-air becomes a viable alternative for cargo that cannot pay high airfreight rates, nor accept all-ocean transit times.”

Experts caution that not all freight is suited for the sea-air mix because of tight delivery windows and more touch points that increase the risk of delays, such as extra customs inspections.

L.A. sea-air service throughput

The COVID-19 pandemic has turned Los Angeles into a center for sea-air logistics services.

Ocean consolidator ECU Worldwide earlier this year established a sea-air service from China to Europe via Los Angeles, called XLERATE. Less-than-containerload (LCL) shipments booked by forwarders are moved via ocean carrier from six Chinese ports to Los Angeles,  for devanning and placement onto airplanes bound for Europe.

Tim Tudor, CEO, ECU Worldwide (Courtesy photo)

“We are targeting airfreight users and really not trying to convert our standard LCL clients to XLERATE per se. The commercial benefits are allowing our freight forwarding customers to give their “clients a third or middle service option both in price and transit between pure air cargo out of China and the standard ocean LCL service,” Tim Tudor, ECU Worldwide’s Miami-based CEO said.

Transit times are between 14 to 23 days, depending on the Chinese origin port and the destination European airport, while the cost is about one-fourth that of pure airfreight.

After devanning containers and reloading the cargo onto airline pallets at its facility in Los Angeles, Shipco turns the freight over to all-cargo operator Cargolux for air transport to Europe.

Both ocean wholesalers credit the success of their L.A. sea-air service to trans-Pacific, U.S.-flag ocean carriers Matson Navigation (NYSE: MATX) and APL, a subsidiary of French line CMA CGM, which operate scheduled container service from China and North Asia to the Port of Los Angeles. 

While other trans-Pacific liner carriers have announced numerous blank sailings during the COVID-19 pandemic, Matson has even added chartered vessels to increase its capacity to two sailings per week, according to Tudor. For Asia origins that are not served by Matson, ECU Worldwide uses APL’s “Gate Out” service.

“We are most certainly focused on knowing when these blank sailings will occur and adjust our schedule accordingly,” Tudor said.

Central and South America

Both ECU Worldwide and Shipco said they also have expanded their sea-air services via Los Angeles to include destinations across Central and South America. They perform this by trucking the cargo to Miami International Airport for outbound flights to those regions.

Shipco operates team trucks seven days a week to Miami.

“It is an advantage for us that we are a truck broker in the U.S. and can control the trucking leg into Miami ourselves via our in-house domestic department to ensure we can deliver on the competitive transit times,” Bach said.

Hospital Gear

The ocean consolidators are also providing sea-air services for large container shipments of personal protective equipment for hospitals, which initially relied on express air to cover immediate supply shortages.

“We have moved several sea-air shipments well over 80 cubic meters from Shanghai  to . . .  Munich and Madrid recently,” said Spencer Strader, ECU Worldwide’s director of U.S. imports. “We have been moving weekly shipments in the 40- to 50-cubic meter range of PPE from Shanghai and Shenzhen to Buenos Aires, Argentina, and Bogota, Colombia, via Miami.”

Personal protective equipment, or PPE, is worn to minimize exposure to hazards such as viruses.

Minneapolis-based forwarder C.H. Robinson Worldwide (NASDAQ: CHRW) has also helped Asian shippers turn to sea-air transport for their U.S.-bound shipments.

Matt Castle, vice president of global forwarding products and services, C.H. Robinson Worlwide (Courtesy photo)

“We’re working closely with them to understand their current inventory levels and determine if expedited ocean services to the U.S. and domestic air to various U.S. states will work with their timeline,” said Matt Castle, C.H. Robinson’s vice president of global forwarding products and services. “With the right planning, global shippers can accommodate the longer lead time and take advantage of the cost savings.”

Extraordinary measures

DSV Panalpina (OTCMKTS: DSDVY), based in Germany, has experienced greater interest in its sea-air service to Europe via Singapore and Dubai.

“At the beginning of the year – before Chinese New Year – we experienced an increase in demand for this service from markets such as Bangladesh, Myanmar and Cambodia due to a surge in textile volumes,” DSV Panalpina spokesman Christian Krogslund told American Shipper.

“As the COVID-19 pandemic unfolded late in the first quarter, demand shifted towards mainly PPE,” he said. “In order to keep supply chains flowing with vital PPE for the fight against COVID-19, we have used transshipment points such as South Korea, Taiwan and even Vietnam to meet the huge demand for capacity out of China.”

Kim Ekstroem, global chief operating officer, Shipco Transport (Courtesy photo)

Shipco COO Kim Ekstroem said experienced logistics providers can establish new sea-air routes on demand.

When airfreight capacity to China suddenly tightened at the start of the pandemic, Shipco established a sea-air solution through Inchon, South Korea. Cargo arrived via aircraft at Inchon and was reloaded into ocean containers for transport to Shanghai.

“We got down to a transit time of roughly seven days,” Ekstroem said. However, he added, the service only lasted until the outbreak subsided in China.

Sustaining sea-air services post-COVID-19

ECU Worldwide said it plans to expand XLERATE for Europe with truck service to nine more inland U.S. locations in the next several weeks.

“Our XLERATE service, however, must first have access to premium port-to-port and express terminal gate-out services in Los Angeles for us to put it under the XLERATE rate,” Strader said.

Since sea-air services thrive on supply chain emergencies, C.H. Robinson’s Castle said the number of shipper requests will likely decrease once the COVID-19 virus subsides.

But Shipco’s Ekstroem believes sea-air services will stick around once the COVID-19 pandemic subsides.

“I think the need for cargo capacity will increase faster than our appetite for traveling, and without us traveling, there will be limited belly capacity and airfreight rates will stay high,” he said.

Source: https://s29755.pcdn.co/news/more-air-cargo-finds-its-sea-legs-during-covid-19

Automotive

TuSimple kicks off plan for a nationwide self-driving truck network with partners UPS, Xpress and McLane

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Self-driving trucks startup TuSimple laid out a plan Wednesday to create a mapped network of shipping routes and terminals designed for autonomous trucking operations that will extend across the United States by 2024. UPS, which owns a minority stake in TuSimple, carrier U.S. Xpress, Penske Truck Leasing and Berkshire Hathaway’s grocery and food service supply chain company McLane Inc. are the inaugural partners in this so-called autonomous freight network (AFN).

TuSimple’s AFN involves four pieces: its self-driving trucks, digital mapped routes, freight terminals and a system that will let customers monitor autonomous trucking operations and track their shipments in real-time. For now, TuSimple will operate the trucks and carry goods for its customers, which now number 22.  TuSimple wants to eventually be able to sell its autonomous trucks so customers can choose to operate their own fleets.

The plan was made public just days after TechCrunch learned that TuSimple had hired investment bank Morgan Stanley to help it raise $250 million. Morgan Stanley recently sent potential investors an informational packet, viewed by TechCrunch, that provides a snapshot of the company and an overview of its business model, as well as a pitch on why the company is poised to succeed — all standard fare for companies seeking investors. TuSimple, which has raised $298 million to date, has also shared its plans to build its autonomous freight network with potential investors.

“Our ultimate goal is to have a nationwide transportation network consisting of mapped routes connecting hundreds of terminals to enable efficient, low-cost long-haul autonomous freight operations,” TuSimple President Cheng Lu said in a statement. “By launching the AFN with our strategic partners, we will be able to quickly scale operations and expand autonomous shipping lanes to provide users access to autonomous capacity anywhere and 24/7 on-demand.”

TuSimple already carries freight in its autonomous trucks (always with human safety operators on board) along seven different routes between Phoenix, Tucson, El Paso and Dallas. TuSimple said it will expand its service area with existing customers UPS and McLane. U.S. Xpress is a new partner. Penske will help TuSimple scale its fleet operations nationwide and provide preventative maintenance for the self-driving trucks, the company said. 

TuSimple said the network will be rolled out in three phases, starting with a focus on a service area in the Southwest where it already operates. Phase 1, which will launch in 2020 and into 2021, will cover service between cities Phoenix, Tucson, El Paso, Dallas, Houston and San Antonio. TuSimple plans to open this fall a new shipping terminal in Dallas. TuSimple said these terminals are designed to be shared by mid-sized customers. TuSimple will carry freight directly to a company’s distribution center if it is a high-volume customer.

The second phase will begin in 2022 and expand service from Los Angeles to Jacksonville and connect the east coast with the west, the company said.

The final phase will expand across the lower 48 states, beginning in 2023. The company said it will replicate the strategy in Europe and Asia after the AFN rolls out nationwide.

Source: https://techcrunch.com/2020/07/01/tusimple-kicks-off-plan-for-a-nationwide-self-driving-truck-network-with-partners-ups-xpress-and-mclane/

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2021 BMW 5 Series Will Let You Add Options Via Over-The-Air Updates

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BMW announced that it would start offering over-the-air activation of optional features as part of its new Operating System 7, with some features available on a free-trial basis or with a subscription. Operating System 7, which debuted alongside the 2021 5 Series, will be available on most late-model BMWs as part of a software update. It also includes a wide range of data and connectivity updates, but it’s not without controversy.

BMW freely admits that many of its new vehicles are equipped with the hardware needed for optional extras like adaptive cruise control, adaptive M suspension, and high-beam assistance. Ticking the box on the order sheet for those features merely adds the coding needed to run them, rather than altering the vehicle’s hardware. In its official Operating System 7 announcement, BMW representatives implied that additional features might be added to that over-the-air activation setup – seat heating and cooling, automatic climate control, power seat memory, and remote start might be on that list.

The company drew up a potential use case for over-the-air feature activation. The owner of a brand-new 4 Series coupe might decide against ordering adaptive cruise control or ventilated seats upon purchase, but after living with the car in a traffic-clogged urban environment in the heat of summer, she decides she’d like to try those features out.

She can order a one-month free trial, and if she likes the optional extras, she can purchase either a one- or a three-year subscription. When her time with the car is over and she sells it to its next owner, he might have different priorities. He can then subscribe to a particular set of features that suit his needs better. We like the idea that one could pay a bit less at the dealer, then decide later on that some features might be worth optioning.

Of course, the part that makes us raise our eyebrows is that if the hardware is already there, demanding that customers pay a monthly, yearly, or periodic fee to keep it activated feels like money-grubbing. BMW learned the lesson already that customers don’t want to pay for features when they sign the dotted line, then continue to pay for the privilege of using them.

That’s why the company announced it would suspend its Apple CarPlay and Android Auto yearly fee schedule, instead offering smartphone integration as a “lifetime” subscription with a one-time charge. Here’s hoping BMW follows its own example by allowing customers to opt in once for the feature in question, then get access to it forever (or at least as long as they own the car).

Source: https://www.motor1.com/news/431779/2021-bmw-5-series-ota-options/?utm_source=RSS&utm_medium=referral&utm_campaign=RSS-category-technology

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BMW wants to sell you subscriptions to your car’s features

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BMW today announced a number of updates to its in-car software experience during a VR press event, complete with a virtual drive through Munich to show off some of these features. These new updates will come to most recent BMWs that support the company’s Operating System 7 later this year — and new cars will already have them built-in.

The automaker is now able to not only update the car’s infotainment system but virtually every line of code that’s deployed to the various compute systems that make up a modern vehicle. And because of this, the company is now also able to bring a couple of features to market that it has long talked about.

Perhaps most notable is the update to the program that allows you to subscribe to specific hardware features that may already be built into your car but that you didn’t activate when you bought the car — like heated seats or advanced driver assistance systems.

BMW has talked about this for a while, but it is now making this a reality. That means if you didn’t buy the heated steering wheel and seats, for example, your new BMW may now offer you a free three-month trial and you can then essentially buy a subscription for this feature for a set amount of time.

Image Credits: BMW

“We offer maximum flexibility and peace of mind to our customers when it comes to choosing and using their optional equipment in their BMWs, whether this BMW is new or used,” a company spokesperson said during today’s press event. “So flexible offers, immediate availability, simpler booking and easy usability for choice, at any time, when it comes to your optional equipment. We already started connectivity over 20 years ago and since 2014, we are online with our Connected Drive Store, where digital services can already be booked.”

Those were very much infotainment features, though. Now, BMW will let you enable vehicle functions and optional equipment on demand and over the air. The company started offering some features like active cruise control with stop and go functionality, a high beam assistant and access to the BMW IconicSounds Sport. The carmaker will add new features to this line-up over time.

Surprisingly, it’s often easier and cheaper for car manufacturers to build some hardware into cars, even if it is not activated, simply because it removes complexity from the production process. A lot of the features that BMW is talking about consist of a combination of software and hardware, though.

What’s new here is the ability to only subscribe to some features for a short time.

“In the near future, we will not only be able to add more functions here, but we will also be able to add even more flexibility for our customers with temporary bookings so booking of options for three years, for one year, or even shorter periods of time, like a few months,” a spokesperson said.

Image Credits: BMW

The company also notes that this will give somebody who buys a used car a lot more flexibility, too. It’s worth noting that Apple CarPlay support was also originally a subscription feature in new BMWs, costing $80 a year. That really felt like nickel-and-diming drivers, though, since none of its competitors charged for this. The company’s customers were not very happy, so the company reversed that decision last December.

It’ll be interesting to see how drivers will react to additional subscription services, but the focus now is more on convenience features that would usually be an option when you buy a new car, so my guess is that this will be less of an issue.

Among the other new and updated digital services the company showcased today is support for Apple’s new ‘Car Keys,’ which BMW brands as the BMW Digital Key, as well as an updated BMW Personal Assistant. Some of these new Assistant features are more cosmetic and about how it is showcased on the in-car display.

One nifty new Assistant feature is a kind of IFTTT for your car, where you can program it to automatically roll down your windows when you enter your company’s parking garage, for example, so that you can easily scan your badge to open the boom gate.

Image Credits: BMW

Other updates include the new BMW Maps, the company’s built-in GPS system, which the company described as a ‘major leap.’

This cloud-based service can now find routes faster, has more granular traffic data and also includes the ability to find parking spaces for you — and that parking feature itself is based on a lot of work the company is doing in aggregating sensor data from across its fleet, which already covers and maps close to 99% of the German highway system once a day in HD.

Image Credits: BMW

Speaking of maps, the company, which is still in the middle of the roll-out of its hybrid-electric vehicles, also announced today that its hybrid fleet will make it easier for drivers to find charging stations and will automatically switch to electric driving when they enter low-emission zones in 80 European cities, with support for additional cities coming over time.

“Digital technologies belong to the core of BMW – because hardware and software are of
equal importance for premium cars,” said Oliver Zipse, the Chairman of the Board of Management of BMW. “Our mission is to integrate advanced digital technologies with highest product excellence to enhance our customers’ experience and driving pleasure even more.”

Source: https://techcrunch.com/2020/07/01/bmw-wants-to-sell-you-subscriptions-to-your-cars-features/

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