Main cobalt supplier brings sales to a halt
This largely controversial, but increasingly important material, cobalt, is almost entirely sourced by the Democratic Republic of the Congo (DRC). The market for cobalt was beginning to look more promising in terms of pricing, as this year miners began to ramp up their supply, thereby dropping prices by 6%. However, this positive trend may not last for long.
This week the leading supplier of cobalt, Glencore, had to stop all sales of cobalt produced by its operating subsidiary, Katanga Mining, due to the discovery of radioactive uranium in the metal. The radioactivity levels were not enough to call for a health and safety emergency, but they were high enough to stop ports from handling the metal. Although the firm will continue with production, sales have been suspended until it has built an ion-exchange plant to remove the uranium. The plant is estimated at a cost of $25 million and may delay plans for expansion till the second half of next year. This suspension is unlikely to have a strong immediate impact on the market, due to the current low demand and oversupply of cobalt. But this announcement has brought more volatility to an already unstable market and highlights the overdependence and fragility of the supply chain.
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Ford teams up with Walmart and Postmates to develop automated deliveries
Like the majority of companies that are developing automated vehicles, Ford is focused on developing automated technology for lucrative mobility or transportation services. Earlier this year, Ford decided to begin to test using its automated vehicles for takeout deliveries in Miami, Florida, in partnership with the likes of Dominos and Postmates. The company is now looking into its next phase, automated grocery delivery.
Ford has extended its current partnership with Postmates, to test out automated grocery deliveries, which Walmart will also be involved in, as the retailer currently has a partnership with the delivery company. For Walmart, automated grocery deliveries could provide an opportunity to improve its customer service and remain competitive with ecommerce giant Amazon in the future. The tests will focus as much on developing business service models as the technology and driving itself. The automaker aims to gain a greater understanding of the customer interaction process and of what can be delivered reliably. The initial deliveries won’t use fully automated vehicles but will instead be delivered by a Ford Escape equipped with sensors, to gather data on how customers interact with the vehicle to retrieve the goods inside. Customers will have to enter a code into an attached tablet to get access to their groceries.
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Forecasted freight surge interrupted by devastating storms
The U.S. freight industry was anticipating a “seasonal rebound” in October, but instead it was hit by extreme weather in Asia and across the U.S. Eastern seaboard, causing truckload transportation delays at U.S. ports. According to the DAT Freight Index, the October freight volume was 7% lower month-by-month and 33% lower than 2017 levels. Some of this forecasted demand has carried into this month, as imported goods are being moved from seaports to regional distribution centers across the country.
Hurricanes Florence and Michael had two different but equally devastating impacts on the industry, occurring shortly after one another. Florence moved through the Carolinas throughout September, sparking record levels of flooding and closing ports along the way. There wasn’t much time for recovery before hurricane Michael hit the coast in October. Though the storm was much less wet, it was stronger and remained at least a category 3 hurricane for its duration in southwest Georgia. Whilst this was all happening, Typhoon Mangkhut hit the Philippines, Hong Kong and mainland China, suspending many transport services across the continent and thereby disrupting exports and imports in these important areas.
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Have a great weekend.