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Supply Chain by the Numbers

- Jan. 26, 2023


Supply Chain by the Numbers for Jan. 26, 2023


Layoffs Said to Hit Amazon Drone Unit Hard; Demographic Woes in Japan; eCar Growth could be Bad for Environment; The End of the 2M Ocean Carrier Alliance




That as you have probably heard is how many jobs Amazon is shedding to improve profitability and align with slower growth. The news this week from CNBC: Amazon Prime Air, the company’s drone delivery unit, will be hit fairly hard by the furloughs. According to the CNBC story, Prime Air is losing a significant number of employees, said sources familiar with the matter who asked not to be named. Overall, Employees in the design, maintenance, systems engineering, flight testing and flight operations units were part of the layoffs, the sources said. Amazon’s drone test site in Pendleton, Oregon, was hit particularly hard, with half of the team being let go, one Prime Air employee wrote in a LinkedIn post, which was later deleted. Amazon has not made details on the layoffs available. The huge question: do these cutbacks signal a retrenchment from Amazon’s drone strategy, just as the company is testing its first drone delivery markets in College Station, Texas, and Lockeford, California?





That is the number of births that occurred in Japan last year, according to estimates this week from government officials. That for a country with a current population of around 125 million – and compares to more than 2 million in 1970s. These dangerous demographics are at now crisis levels, prime minister Fumio Kishida said this week. "Japan is standing on the verge of whether we can continue to function as a society," Kishida told lawmakers. The low birth rate is exacerbated by a long-lived population. Japan now has the world's second-highest proportion of people aged 65 and over – amazingly, about 28%. A new government agency to focus on the issue will be set up in April. However, Japanese governments have tried to promote similar strategies before, without success. In 2020, an analysis projected Japan's population would decline from a peak of 128 million in 2017 to just 53 million by the end of the century – a disappearing nation.




That is the rise in current global production of lithium that would be required by the US alone in 2050 if it maintains its pace of battery powered cars and SUVs. That according to an article this week in the UK’s Guardian newspaper. And that’s a problem, many say, because production of lithium for the batteries to power those cars is very bad for the environment, with “dire consequences for water and food supplies, biodiversity, and Indigenous rights,” the Guardian writes. What’s the answer? Drastically reducing the number of car miles driven, the paper says, achieved through changing the way we get around towns and cities – fewer cars, more walking, cycling and public transit made possible by denser cities, according to the Guardian.




That’s the year that the first so-called ocean container shipper alliance between giants Maersk Line and Mediterranean Shipping Co. is now somewhat surprisingly is now scheduled to end, according the carriers this week. The 2M Alliance was formed in 2023, with an agreement to reduce costs by sharing cargo on major ocean routes. That first agreement led to creation of the Ocean Alliance and THE Alliance - similar consortiums of other carriers. The move led to concerns from regulators and shippers about price collusion, but the alliances were ultimately allowed to operate. But now that container volumes are falling there is less reason to share capacity, industry executives said. The development also naturally raise questions over the future of the Ocean Alliance and THE Alliance. In a joint statement, the chief executives of Maersk and MSC said that much has changed since the 10-year deal was signed, and terminating the agreement will allow both companies to continue to pursue their individual strategies.

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