In Case You Missed It

• Are smart factories the future of manufacturing?
• CSX's service disruptions may force a new wave of regulation.
• Oracle is entering the blockchain-as-a-service space.

Market Snapshot

Here are three facts of supply chains in recent years for you to ponder: trucks are more scarce, trains are longer and ships are bigger. Altogether that means the transportation market — which is often limited by supply — is seeing greater demand pressures thanks to a stable economy.

If you think it's too good to be true, it's not. Just ask the Bureau of Transportation Statistics, which just released its Freight Facts and Figures report for 2015, documenting these trends. A few highlights:

• Just over a decade ago, in 2005, the average container vessel measured 44,601 deadweight tons. In 2015, the average vessel size per call at U.S. ports was 57,768 DWT. That's a 28.8% increase, and we know 2017 saw record-breaking ships arrive at the U.S. East Coast.
• Combination and single-unit trucks drove for a combined 279,843 vehicle-miles traveled in 2015. That's a useful benchmark to know for states considering VMT-based taxes as a supplement to gas taxes.
• There were 26,574 Class I Railroad Locomotive Units as of 2015. In comparison, there were 20,028 units in 2000, or 24% fewer. Many of the new locomotives were built in the past 5 years.

Technically Speaking

In the wake of the Senate’s new AV START Act that did not provide regulatory principles for the manufacturing of autonomous trucks, the California DMV launched a new set of regulations for manufacturers testing autonomous cars and trucks.

That’s significant because manufacturers technically are not allowed to sell trucks with autonomous tech right now, but California is telling them to go west and at least test them.

On the topic of autonomous vehicles, tech company Nvidia revealed on Tuesday what it’s calling the first artificially intelligent computer that can drive a car, according to CNBC.  Nvidia also announced plans to partner with ZF to develop self-driving trucks for logistics mammoth DHL.

Given that Europeans are way ahead of Americans in terms of automated tech and sustainability solutions, the first self-driving vehicles are probably going to come from Europe.

In other news, the Port of Long Beach just got a new predictive visibility tool that will help reduce traffic congestion, accelerate truck turn times and reduce demurrage, according to JOC.com.

Breaking Ground

Another distribution center is coming to Indianapolis — this time it’s FedEx, which is planning to build a $259 million, 608,000 square foot distribution center that could employ up to 450 workers, most of which would be part-time, the Indianapolis Business Journal reported.

Not to be outdone, competitor UPS announced plans to build a 260,000 square foot distribution center north of Houston as part of the company’s larger expansionary project to cater to a growing e-commerce market in the area, according to the Houston Chronicle.

In other news, the Commercial Appeal reported that Port of West Memphis is upgrading its infrastructure to allow greater connectivity between its rail, river and road traffic, which could result in 3,000 new jobs. The project will cost around $11 million.

Mergers and Analysis

As the global economy expands, businesses are looking for new ways to expand market share — or, at minimum, not lose it — due to lagging innovation. Recent news show companies in various industries are targeting new technologies or a geographic advantage when considering deals and partnerships

General Motors, for example, recently purchased LIDAR startup Strobe, as it pushes to be a leader in the autonomous-vehicle space. The auto industry is seeing a wave of innovation, bolstered by a healthy number of startups to partner with or buy altogether.

"Strobe’s new chip-scale LIDAR technology will significantly enhance the capabilities of our self-driving cars. But perhaps more importantly," wrote Kyle Vogt, CEO of GM subsidiary Cruise Automation. "By collapsing the entire sensor down to a single chip, we’ll reduce the cost of each LIDAR on our self-driving cars by 99%."

Next time someone asks what the benefits of vertical integration are, point them to GM. The purchase will bring a much-needed part in-house, allowing them to expedite the purchase and innovation process at 1% of the cost.

However, market share doesn't always have to come by way of innovation or new technology. Sometimes, expanding into a new market is the right play. For example, Bpost bought its way into the U.S. fulfillment market with its purchase of Radial, while Emirates and Cargolux signed a codeshare deal to expand their respective footprints.

A bit of free advice from Kroger, though: partnerships are not permanent, and if they end, they can come at a high human resource cost.