📊 US looks to shut China out of its battery supply chain

Irbis Index November 2023

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News

Latest from COP28:

• Latest COP28 draft text does not directly mention the phase-out of fossil fuels, a key demand by the European Union and many developing countries that are particularly vulnerable to climate change.

• Instead, it recognizes the need for deep, rapid, and sustained reductions in greenhouse gas emissions and suggests actions that could include tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030, among other measures.

• Critics have slammed the draft deal for dropping the call to phase out fossil fuels. They allege that oil-rich countries have used their influence to water down the language on the need to eliminate fossil fuels.

• COP28 President Sultan al-Jaber has urged the summit to deliver the highest ambition on all items, including on fossil fuel language, noting that there is still time to iron out differences before the conference concludes.

• However, climate advocates are warning that the summit could be on the cusp of failure after the removal of a call to phase out fossil fuels from the draft.

• The dates for the next two conferences, COP29 and COP30, have also been announced, scheduled for November 11-22, 2024, and November 10-21, 2025, respectively.

PIL and DP World partner to develop green supply chain solutions Singaporean ocean carrier Pacific International Lines (PIL) and Dubai-based port and terminal operator DP World have signed a Memorandum of Understanding to jointly develop green solutions for global supply chains and accelerate progress towards net zero GHG emissions

• Both parties will collaborate on trial shipments between DP World's Jebel Ali Port and destinations within PIL’s network, focusing on reducing greenhouse gas footprint.

• The agreement includes initiatives to reduce the greenhouse gas footprint through biofuel blend-powered vessels, biofuel bunkering, and deploying container handling equipment at terminals running on renewable energy.

• Longer-term plans involve exploring partnership expansion to include other ports within DP World’s global network and using alternative fuels like e-LNG, green methanol, or green ammonia in PIL’s vessel operations and bunkering.

• DP World has committed to becoming carbon-neutral by 2040 and achieving net-zero carbon emissions by 2050. They are exploring partnerships with companies sharing similar ambitions and deploying technology for quicker results. (link)

XPO acquires 28 Yellow terminals for $870M XPO Inc. is set to acquire 28 Yellow Corp. terminals and two leased properties for $870M.

• This acquisition comes as part of the managed sale of Yellow's assets, with 128 of Yellow’s 169 owned properties sold to 21 different buyers for a total of nearly $1.9B.

• XPO will expand its national terminal footprint with these new locations, including significant properties in various states.

• Other major buyers in the auction include Estes Express Lines, Saia Motor Freight Line, and real estate companies.

• The sale is expected to close in the first quarter of 2024, and the industry continues to closely monitor the ongoing auction. (link)

US looks to shut China out of its battery supply chain US initiatives, including the Bipartisan Infrastructure Law and Inflation Reduction Act, exclude "Foreign Entity of Concern" (FEOC) from receiving financial benefits.

• The restrictions will expand to encompass critical minerals in batteries linked to FEOC from 2025, with exemptions for some battery materials until 2027.

• The exclusion of FEOC primarily targets China, Russia, North Korea, and Iran, aiming to bolster the domestic supply chain and reduce dependency on Chinese entities.

• China's dominance in the battery supply chain, often through joint ventures with Western partners, makes the new rules significant with potential global consequences for critical mineral producers.

• The proposed rules could impact EV subsidies and mineral sourcing, leading to disagreements, including opposition from Senator Joe Manchin against the delayed exemption timeline.

• The impact of the rules on the global battery supply chain may prompt reshuffling of corporate structures and investment in new Western capacity, potentially causing more losers than winners in the short term. (link)

Jin Jiang Shipping IPO fails to hit target, but shares rise JJ Shipping's IPO raised CNY 2.18B ($308M), falling short of its target.

• JJ Shipping, also known as Shanghai Jin Jiang Shipping, is the liner subsidiary of Shanghai International Port Group (SIPG).

• Net proceeds totaled $290.68M, with plans to use the funds for ordering new ships, containers, and digitalization.

• The company saw a 49% net profit increase in 2022, but a 53% decrease in the first nine months of the following year due to market corrections.

• Despite the IPO falling short of its target, JJ Shipping's stock closed nearly 59% higher than the IPO price, resulting in a market capitalization of over CNY 2.31B ($325.95M).

• Shanghai International Port Group (SIPG) held a majority stake in JJ Shipping before the IPO and retained an 85% stake after the listing. (link)

Carriers force through rate hikes and prevent new 'race to the bottom' Ocean carriers are maintaining high rates for Asia-North Europe routes, stemming the trend of steep discounts.

• Disappointing Q3 results have prompted a reality check for liner boardrooms in Europe and Asia, raising concerns among investors about cash flow.

• Shippers are facing challenges securing export slots from China as rates soar.

• Maersk is introducing a peak season surcharge in January, with a premium quality container service surcharge for Indian exports.

• Several carriers are considering peak season surcharges and premium surcharges on specific routes. (link)

Tech

GXO tests walking Digit robot to automate repetitive warehouse tasks GXO Logistics is piloting Agility Robotics’ Digit, a 5'9" tall, 140-pound robot designed to handle repetitive tasks in SPANX’s facility.

• The robot, capable of lifting 35 pounds, aims to reduce strain on workers by moving totes from autonomous mobile robots onto conveyors.

• Amazon is also testing Digit in its warehouses to aid with moving empty totes.

• If successful, GXO plans to expand Digit's roles in 2024, with the potential for broader application in the supply chain industry.

• Agility Robotics emphasizes that no warehouse redesign or additional infrastructure is necessary for Digit's integration. (link)

Mujin Expands to Europe Mujin, a U.S.-based automation machinery provider, announced the opening of its first European office in the Netherlands, signaling the company's commitment to global expansion.

• The expansion is supported by an $85 million 'series C' funding round and follows the launch of a robotic truck unloading solution and other robotic products.

• Mujin offers robotic solutions including Random Palletizing, Depalletizing, and Bin Picking, catering to the unique needs of European businesses across various industries.

• The new European office will act as a central hub for sales, customer support, and solution development, enhancing Mujin's ability to meet the high standards and unique requirements of European customers. (link)

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