📊 The mineral supply chain and the new space race

Irbis Index November 2023

To view the full Index for November 2023 click here.

Thank you for being a part of the Irbis Index in 2023!

This is our last issue for this year and we look forward to seeing you in 2024.

The Irbis index team wishes you Merry Christmas and a Happy New Year ❄️

News

The mineral supply chain and the new space race Greg Autry, a Clinical Professor and the Director of Space Leadership Policy and Business at the Thunderbird School of Global Management, testified before the House Natural Resources Committee on the strategic and economic significance of extraterrestrial resource extraction.

• His comments highlighted the importance of the United States regaining control over the supply of basic factor inputs, especially minerals.

• China's aggressive strip mining and processing of rare earth elements led to environmental destruction and the closure of a U.S. mine, resulting in a global rare earth monopoly and increased pricing.

• This monopoly gave China leverage, compelling the U.S. to fund a small domestic processing effort.

• Autry proposed the use of space resources, particularly the Moon, as a solution to the supply chain problem, highlighting the abundance of materials on the Moon (like water ice, platinum group metals, and Helium 3) that are essential for human prosperity.

• He pointed out the strategic attractiveness of the Southern Polar regions of the Moon, which contain a massive metallic structure, and highlighted the potential of metallic asteroids found in space.

• Space mining ventures offer economic opportunities, but they also entail significant challenges such as the development of new mining equipment, transportation requirements, and the need for reentry technologies. (link)

BP pauses all Red Sea shipments after rebel attacks BP has joined a growing number of companies halting their shipping operations through the Red Sea and Suez Canal due to ongoing attacks off the coast of Yemen.

• This decision has led to a spike in oil prices, with a one to two percent increase on world markets and up to three percent on the NYMEX exchange. The price of oil had briefly surpassed $74 a barrel after previously falling below $69.

• The Suez Canal is particularly crucial for Europe's oil supply, with 21.5 percent of its refined oil imports and 13 percent of its crude oil imports passing through the Red Sea.

• Other companies, such as Euronav and Maersk Tankers, have also decided to avoid the area, with Euronav incorporating rerouting options in future contracts and Maersk Tankers adding a clause for rerouting around South Africa in its tanker pool operation.

• The impact on container shipping is significant, with Flexport's CEO Ryan Petersen reporting that 46 containerships have been diverted and an additional 78 are awaiting further instructions. (link)

Deutsche Bahn starts DB Schenker sale process Deutsche Bahn, the German state rail operator, has officially launched the sales process for its logistics subsidiary, DB Schenker.

• The sale process is open and non-discriminatory, and the condition for a sale is that it must have apparent economic advantages for Deutsche Bahn in all respects.

• DB Schenker, one of the world's top 4 logistics companies, has contributed positively to Deutsche Bahn's economic growth over the years. However, it will need more capital and flexibility for its own growth.

• The proceeds from the sale will be retained by Deutsche Bahn, a large part of which will be used to reduce debt.

• The sale would significantly accelerate Deutsche Bahn's focus on its core business and the implementation of its Strong Rail strategy.

• DB Schenker could be valued at as much as €20B ($21.3B). (link)

Uber Freight teams with Greenlane to speed deployment of truck charging stations Uber Freight has announced a collaboration with Greenlane to accelerate the installation of public charging infrastructure for Heavy Duty Battery Electric Vehicles (HD BEVs).

• Greenlane is a $650M joint venture between Daimler Truck North America, NextEra Energy Resources LLC, and BlackRock’s Climate Infrastructure business.

• The collaboration aims to speed up the deployment of HD BEVs at scale and explore how they can operate and distribute goods as efficiently and cost-effectively as possible.

• As part of the deal, Greenlane will analyze data from Uber Freight's logistics network to identify corridors that are prime candidates for early HD BEV deployment, charging infrastructure needs, and the addressability of shipping lanes for electrification.

• The two organizations will also consider leveraging Uber Freight's marketplace technology to potentially create in-application charging, appointment scheduling, surface Greenlane charging stations, and fuel card discounts for carriers.

• Despite the growing interest in using electric trucks or other renewable fuels for green transportation, the movement’s growth is being slowed by a lack of publicly available, nationwide electric charging infrastructure for commercial vehicles.

• To address this challenge, Greenlane has announced it will build its first charging corridors in Southern California, followed by the Texas Triangle and northeastern United States. (link)

Tech

Sequoia, Index back German supply chain AI startup Tacto Sequoia Capital and Index Ventures have led a €50M (approx. $54M) funding round for Tacto Technology GmbH, a German startup specializing in supply chain optimization through AI.

• Tacto's AI software helps businesses reduce procurement spending by about 10% by analyzing the pricing of key costs such as raw materials and energy.

• The Munich-based company, founded in 2020, targets the Mittelstand, which are small and medium-sized companies that are crucial to the German economy, providing almost 60% of jobs.

• The investment reflects a venture capital interest in sustainable, B2B software companies, especially as higher interest rates challenge many startups with cash flow issues.

• Sequoia partner Luciana Lixandru mentioned that the firm is investing in companies that respond to macroeconomic trends such as labor shortages, supply chain disruptions post-Covid, and reshoring, and expressed enthusiasm for further investments in the procurement sector. (link)

Other headlines 

Some job cuts, but our presence in Europe is essential, says FourKites - The Loadstar

Shein, Temu drive 5% air freight spike in November - Supply Chain DIve

New 115,000ft² DHL warehouse complete near Gatwick Airport - Logistics Manager

MSC bid for Hamburg terminal operator HHLA on the verge of success - The Loadstar

Egytrans, Links Investment to launch joint logistics, transport company in Saudi Arabia - Daily News Egypt

AT&T to Buy Rivian EVs as Part of Electrification Program - Transport Topics