Category Archives: Uncategorized

Future Big Rigs

Futuristic Big Rigs Hit The Road As Waymo, Tesla, Uber Test Next-Gen Semi Tech


Waymo self-driving semis will start hauling loads for Google’s logistics operation in Atlanta this month.

Alphabet’s Waymo is launching a robot truck project in Atlanta with Google, making clear that its plans for self-driving vehicle technology go beyond an on-demand ride service. The announcement also caps a week of heavy metal tech news including updates on Uber’s driverless truck program and the start of test runs for futuristic electric Tesla Semis.

After a year of stealthy testing in California and Arizona, Waymo is starting larger-scale public tests of Class-8 semi-trucks loaded up with vision sensors, software and a computing system created in-house. They’ll haul loads in a program operated with Google’s Atlanta-based logistics unit, Waymo said in a blog post. A spokeswoman declined to say how many of the modified Peterbilt trucks, which will have human safety drivers standing by if problems arise, will run in the pilot project.

“Trucking is a vital part of the American economy, and we believe self-driving technology has the potential to make this sector safer and even stronger,” the company said. “With Waymo in the driver’s seat, we can reimagine many different types of transportation — from ride-hailing to logistics.”


In late 2017, Waymo CEO John Krafcik identified autonomous ride services and commercial trucking and logistics as the top two focusesfor the company’s technology. He also said Waymo might work with cities to provide “last-mile” transportation for people to get from their homes or work to a transit station, though the company has yet to elaborate on those plans. The semi program follows recently announced plans to deploy Waymo autonomous minivans in Atlanta.

Trucking has been an attractive target for driverless tech developers the past few years as the operating environment – lots of highway runs from warehouse to warehouse instead of navigating city streets full of pedestrians and cyclists – is less challenging. Another positive aspect: The vision system rigs, including laser LiDAR sensors that create 3-D, 360-degree maps, stereo cameras and radar, that can look ungainly on cars and minivans, aren’t particularly noticeable on gargantuan vehicles already loaded up with elaborate lighting and exhaust systems.

Uber jumped into the truck space with its lavish 2016 acquisition of Otto, an autonomous truck tech startup led ex-Google Self-Driving Car engineer Anthony Levandowski. That deal ultimately ignited a high-profile legal fight with Waymo that was settled last month. It also led to the firing of Levandowski and setbacks for Uber’s autonomous tech efforts.

The program seems to be back on track, however, as Uber this week disclosed that its robotic trucks have been hauling commercial loads in Arizona for the past few months. Uber also posted a video showing how it can coordinate transfers of trailers hauled by robotic trucks to those driven by humans.

Never one to pass up an opportunity to gin up excitement among his vast social media fan base Elon Musk this week tweeted that the prototype electric Tesla Semis he unveiled in November have started hauling loads between the company’s Gigafactory battery plant in Sparks, Nevada, to its assembly operation in Fremont, California, a 240-mile trip each way.

While not operating autonomously, at least not yet, Musk promised the truck will set a new standard for Class-8 vehicle performance in terms of acceleration, efficiency and operating cost per mile with high-powered battery packs that deliver between 300 miles and 500 miles of driving per charge.


Those are big goals and given the significant delays the company has run into delivering its entry-level Model 3 sedan to customers as quickly as promised, it remains to be seen if Tesla can deliver its truck on time, at the price and with all the performance attributes promised by Musk’s target of late 2019 or early 2020.

At a minimum, the new technologies coming to commercial trucking from Waymo, Uber and Tesla underscore that massive changes are afoot in an industry that’s not typically associated with being cutting-edge.



Ocado has ‘need to know’ projects that even some staff don’t know about

ocado van image large
Ocado’s iconic vans.
  • Ocado is working on multiple top secret projects based on robotics, according to its CTO.
  • Some projects are kept secret even internally to “protect our future,” CTO said.
  • The company has publically talked about working on a humanoid robot called SecondHands.

LONDON — Online grocery business Ocado has super-secret internal projects that even many staff don’t know about, according to its chief technology officer.

Paul Clarke told Business Insider at Retail Week Live this week in London: “We’re reasonably secretive about things internally too. We have projects that are on a ‘need to know’ basis. It’s done on a project by project basis. It’s an important part of protecting our future.”

Asked what Ocado needs to protect itself from, Clarke said: “The way that we look at it, rather than obsess about looking out at who’s trying to do what we’re doing, I think what we obsess about it constantly trying to move the puck to somewhere better and different.

Ocado is an online-only grocery business in the UK but has been trying to position itself as a technology business that can help other businesses get into online delivery. In recent months it has signed deals to provide its technology to France’s Groupe Casino and Canada’s Sobeys.

“We expect to sign multiple deals in the medium term,” Clarke told BI. “We’re talking to people on literally every continent around the world apart from Antarctica and a couple of warzones.”

Clarke said that “not very much is public” of what Ocado does, adding: “We own all of the intellectual property for all of the technology we use, particularly now that we’ve got our own robots, and we need to look after that, especially as we’re going to make it available to other people. We just have to be sensible about what we can talk about and what’s appropriate to talk about.”

Ocado has publically disclosed that it is working on a human-like robot called Second Hands that is intended to help humans with tasks around warehouses.

Clarke said: “We took delivery of the first robot a few months ago. We’re putting it through its paces. It’s doing very well.”

“We’re subjecting it to DARPA type challenges. What can it do, what happens when it fails, if it falls over can it pick itself up? We’re putting it through its paces like that.”

Ocado has also been working on a new generation of grocery picking robots, called SoMa, andexperimenting with driverless cars.

Clarke said: “We have multiple robotics streams underway, not just the swarm Robotics but picking and packing, and other parts of the business that I can’t talk about but that’s the direction of travel as part of our relentless drive to automate more and more.”

“I’ve been there 12 years and quite frankly there really is never a dull moment. You don’t join Ocado for a quiet life. That’s what keeps it exciting. We would not keep the quality of talent we have if there were not big challenges to move on to.”

Less than Truckload

2018 Less-than-Truckload Market Expecting Substantial Growth

Buoyed by surging demand, less-than-truckload (LTL) carriers are revving up for 2018, warning that tightening capacity means sharply higher rates in a new era of pricing.

Less-than-Truckload Resources

After nearly a decade of so-so profits, the $36 billion less-than-truckload (LTL) sector of the trucking industry is poised for impressive – if not spectacular – growth in 2018.

Nearly all trucking analysts agree that consistently steady industrial and retail demand, the tightening of overall trucking capacity throughout the industry, and LTL’s special operational niche all are factors in creating sparkling market conditions unseen in that sector in at least 10 years.

As Stifel analyst David Ross recently summed it up to the investor community: “Structurally, LTL still is set up really well for success.”

For example, unlike truckload (TL), there are few new entrants in LTL because of the steep initial economic outlay to replicate most carriers’ complex hub-and-spoke, brick-and-mortar terminal networks. At the same time, shortening supply chains, more emphasis on smaller and lighter loads, tighter capacity throughout the entire trucking industry as well as the e-commerce boom all point to more business for LTL carriers.

In the meantime, LTL carriers have certainly realized additional leverage from the tightening TL market. Recently, some large TL carriers started rejecting lighter loads of 5,000 pounds to 10,000 pounds, and that freight is now in the LTL space.

However, this era of tightening capacity is bad news for shippers, who stand to face another year of sharply higher rates – perhaps 5% or more.

Even with higher demand prospects, LTL carriers are weathering a blistering rise in costs – not just for drivers, but also for equipment and insurance. And while ecommerce demand is attractive for some LTL carriers, that additional business comes with sharply higher costs to reach remote locales with very little freight density in those markets.

In this article we’ll take a deeper dive into what LTL shippers can expect and all the factors that are forcing market analysts, as well as carrier executives, to predict stiff rate hikes for shippers in 2018.

Explaining the Capacity Crunch

Because of steady demand and tightening capacity, this is probably the best freight market for truckers in at least a decade. But this has repercussions for shippers, as regulations have tightened regarding driver hours of service.

This tightening of capacity is coinciding with booming freight demand while e-commerce continues to soar, meaning more freight for all carriers – even those not specifically chasing that market.

Pitt Ohio president Chuck Hammel

“Because we’re not an Amazon or Walmart carrier, we haven’t seen the surge that companies that do business with them have seen”Chuck Hammel,
President, PITT OHIO

On a scale of 1 to 10, Pitt Ohio president Chuck Hammel calls today’s LTL market conditions “a 6 or a 7. Our capacity is tight, but we have room for some more business,” he says. “Because we’re not an Amazon or Walmart carrier, we haven’t seen the surge that companies that do business with them have seen. I consider this a good thing.”

According to Wayne Spain, president and COO of Averitt Express, the current market “is an 8 out of 10.” He cites the recent mandate for electronic logging devices (ELDs), the tight driver supply and the overall economy as the key drivers for this high score.

“While the ELD mandate may lead to more tightening of capacity after the April 1 leniency deadline, another factor to look for is the effect of the new tax law,” he says. “We may also see a surge in companies ramping up production as they seek to grow their market share in 2018,” he says.

Darren Hawkins, who assumed the role of president and COO of YRC Worldwide on Jan. 1, says that having three straight quarters of GDP growth in excess of 3% was a sure sign of a great freight market. He adds that this is the strongest U.S. industrial market since 2008.

“We’re a reflection of the economy,  a leading indicator,” says Hawkins. “Overall economic fundamentals are the big thing. Our customers have more balanced inventory with constant replenishment needs. That keeps freight flowing consistently, without the ebbs and flows.”

Drivers, drivers, drivers….

According to Myron “Mike” Shevell, chairman of the Shevell Group, parent of New England Motor Freight (NEMF), one factor working against the carriers is the growing lack of qualified, available drivers.

The tight overall labor market is crimping supply at the same time that tighter driver regulations are serving to limit their pay – as most drivers are paid by the mile, not the hour.

“The driver situation is just pathetic, says Shevell. “And it’s going to continue to get worse. Drivers continually are under tighter scrutiny whether it’s for drug use, terrorism protection or the government continuing to crack down on fatigued drivers.”

Wayne Spain, president and COO of Averitt Express

“We may also see a surge in companies ramping up production as they seek to grow their market share in 2018”Wayne Spain, president and COO of Averitt Express

Shevell’s advice for shippers to better manage this situation is to “work with your carriers” to take costs out of their networks, reduce waiting time at docks and other facilities and realize that truckers have to make a profit as well. “Ninety-nine percent of our industry is just making pennies on the dollar as far as profits,” he says.

“In the meantime, we’re making huge investments in trucks, drivers, and facilities.”

Finding drivers in LTL wasn’t always as much of an issue as it’s been in the TL market. With shorter line-hauls and average lengths of haul, LTL carriers could nearly guarantee most drivers could be home every few days – unlike TL drivers who hit the road for weeks at a time.

“It’s becoming a problem in the LTL industry too,” says Pitt Ohio’s Hammel. “As an industry, we need to start recruiting young employees and train them as drivers. Our industry has mostly baby boomers and they’re beginning to retire.” He adds that most trucking companies merely “poach” drivers from other trucking companies, “and that is not sustainable.”

Giving new drivers sign-on bonuses – as much as $10,000 after one year – is all the rage, adds Hammel. “However, that’s not helping the overall supply of drivers. What we need more than anything is to increase driver pay substantially. In fact, I could argue that truckload driver pay needs to increase at least 40%.”

LTL drivers can make in excess of $60,000 annually, substantially more than the average TL driver. In truckload, driver pay starts around $40,000 and peaks around $50,000-$55,000, depending on experience.

Rick O’Dell, president of LTL carrier Saia, says that indeed, the driver market continues to be challenging. “But in the long-term, in order to achieve an economic return on capital, rates will increase in order to compensate for continuing driver wage pressures, benefit costs, and the substantial equipment and technology investments required to meet customer expectations.”

Satish Jindel, the principal of SJ Consulting, a firm that closely tracks the LTL sector, says that LTL carriers ought to use the well-publicized driver shortage as ammunition in rate negotiations with shippers. “Drivers are a factor in terms of capacity, but everybody is facing it,” he says. “It’s an opportunity to raise prices. It’s simply supply and demand. If you’re not making money now, maybe you should get out of the business.”

Last-Mile Conundrums

President & Chief Operating Officer at YRC Worldwide

“Our customers have more balanced inventory with constant replenishment needs, and that keeps freight flowing consistently, without the ebbs and flows”President & Chief Operating Officer at YRC Worldwide

The boom in e-commerce has created a surge in demand for home delivery of everything from diapers to dishwashers, and most LTL carriers have a unit and more than a few trucks and drivers reserved for this business since rates are higher generally for home-delivered goods than general freight.

However, carrier costs are much greater to fulfill this demand due to the many remote delivery destinations with little freight density in the area – and rarely a backhaul. “We’re not chasing this market at all, but by default, we are getting a lot more of this business anyway,” says Pitt Ohio’s Hammel.

“I’ve heard some horror stories about service problems with Amazon carriers due to the tremendous surge that Amazon creates.”

So LTL carriers face a conundrum of sorts. How badly do they chase the last-mile market? Executives are wrestling with that question, weighing the benefits of all that ecommerce freight with the additional costs that last-mile deliveries have in remote locales.

“It’s good business, but it’s too soon to make a judgment,” Shevell explains. “It’s going to be part of the LTL process, but it’s very costly. In New York, with all its crazy regulations, the politicians want everything delivered in the middle of the night. I got news for them: They’re not going to get drivers to work in the middle of the night delivering small packages, it’s just not going to happen.”

Analyst Jindel adds that e-commerce should be a boon to volumes, revenue, and profitability, the bottom line depends on how that freight is priced. “When you boil it down, that’s a function of pricing discipline,” he says.

Jindel’s advice for carriers: “Don’t bring on a customer because it’s a big name,” he says. “It doesn’t matter when you go to the bank whether it’s Amazon or some small XYZ company. Amazon can be a great customer but that’s up to the carrier and how it prices its freight. In the end, that’s not Amazon’s problem, it’s the carrier’s problem.”

As Hammel alluded, even carriers that aren’t chasing e-commerce are benefitting because it’s adding volume they never thought would affect them. “And LTLs should take advantage of that,” says Jindel.

Rick O’Dell, president of LTL carrier Saia

“Rates will increase in order to compensate for continuing driver wage pressures, and the substantial equipment and technology investments required to meet customer expectations”Rick O’Dell, president Saia

LTL executives are trying to do exactly that, but they say they must guard against promising too much in the e-commerce space without getting adequately compensated. NEMF’s Shevell says that e-commerce giants like Amazon have to be treated like any other large shipper.

“If they need you, they’ll be your friend,” he says. “At end of the day, Amazon needs carriers just like everybody else.”

Rates Up, up, up…

Taking all of these factors into consideration, LTL shippers should brace for rate increases of 5% or more this year, but that’s only part of the bad news. It’s not just the base rates that are rising, experts say.

“There is better dimensional pricing and charges for accessorials such as Saturday deliveries, inside deliveries and other special needs,” says Jindel. “And shippers should realize this environment is not temporary; in fact, it should continue for most of 2018.”

Pitt Ohio’s Hammel says that most shippers are “very aware” of the new environment for LTL freight. “They realize it, however, they still fight to keep their rates from increasing too much. Some are putting their business up for bid elsewhere and receiving rate increases anyway.”

NEMF’s Shevell says that savvy shippers realize if more companies exit the business – more than 7,500 have done so since deregulation in 1980 – that means fewer choices and probably higher rates.

Shevell, who’s been in the industry for 60 years, recalled that in 1935, when regulation started, it was because the carriers were beaten up due to the Depression and couldn’t make a decent return on investment. He emphasizes that he doesn’t want a return to the regulated environment, but the situation with some carriers recently has been very dire.

Jindel adds that his analysis shows the operating ratios of the LTL carriers he tracked in 2017 showed a decent profit – an operating ratio of around 90%, collectively. “Pricing discipline has improved since the Great Recession 10 years ago,” he adds. “They need to maintain that. Once you get that discipline in place, you never let go.”

Voice Shopping

Study: Voice shopping will surge 1900% by 2022

Retail Defaults

Retail defaults in 2018 could outpace last year

Alibaba vs Amazon

Forget Amazon: Alibaba Is The Horse To Bet On In This Race


Alibaba is often referred to as the Amazon of China.  This is inaccurate.

Alibaba’s “Alibaba Economy” vision makes it much more than an e-commerce powerhouse — which also happens to be true.

Jack Ma is building a dynamic technology firm whose growth could be just getting started.

Yet despite its long history of blistering success, Alibaba (BABA) is not only a threat to Amazon (AMZN), but it has built a growth engine that is superior. True there are differences between their business models. And direct apples-to-apples comparison is tricky. But Alibaba’s low-inventory model, compared with the capital-intensity of Bezos & Co., make it hard to ignore. It’s also why BABA’s outperformance of AMZN’s meteoric share price performance isn’t surprising:

Source: Yahoo Finance.

Amazon’s future may appear bright, but it may be eclipsed by Alibaba’s awe-inspiring business model. The following factors, in my opinion, are going to be the critical differentiators for Jack Ma’s e-commerce giant in the years ahead.

Going beyond e-commerce

Alibaba, like its rival Amazon, is evolving into a technology company that happens to facilitate e-commerce. It has moved to become the sole technology infrastructure provider to small businesses, especially in China. Alibaba is expanding its capabilities across the commerce technology spectrum. From its sales platforms to payments and even logistics, Alibaba ‘does it all’. Planting the seeds to become one of the global tech giants of the 21st century.

On the consumer side, Alibaba possesses a vast data pool to understand the needs of its customers better. Connecting with them on multiple touch points. BABA has also managed to stay ahead of the curve in mobile, reaching out via video sites, social media, location app, browser, media and more.

Alibaba has a lot of balls in the air, all with the goal of creating an ‘Alibaba Economy’.

Source: Alibaba Investor Day Presentation.

Getting in on the payments game

Alibaba has announced that it will buy a 33% stake in privately held Ant Financial. The move is yet another addition to the Alibaba economy. Spreading its dominance into the Asian fin-tech market. The value of this investment can’t be overstated, as Ant has been investing in payment and financial technology start-ups at a blistering pace.

For example, Ant Financial recently picked up stake in Paytm, which is the #1 digital payments app in India. Paytm is also happens to be the 3rd largest e-commerce marketplace in India. Paytm’s valuation has grown threefold since its subsidiary Ant Financial picked up in February 2015.

True, Payments have not yet proven to be cash rich model for a majority of the fin-tech startups. But for Alibaba, it presents a sustainable moat to promote and cross-sell a broader basket of products and services. Ant Financial may one day go public, and there are rumors that it could fetch an individual valuation of approximately $100 billion.

Cloud Momentum

The success of Amazon Web Services is hard to ignore. It is the cash cow that fuels Amazon’s relentless expansion. Anyone who is remotely familiar with tech industry would know how Amazon’s cloud (known as AWS) emerged as the game-changer as it toppled giants such as IBM and Microsoft. Alibaba is doing the same in China, and it has ambitions to take its cloud business global and challenge the incumbents including AWS.

First, Alibaba is the #1 cloud platform provider in China and is nearing 1 million paying customers. The division, like AWS, as exhibited stratospheric growth:

Source: Alibaba Investor Day Presentation.

It is this division that should have AMZN investors particularly nervous. Should Jack Ma enter the cloud services industry state-side, watch out.

Visions of R&D

Amazon is one of the biggest Research and Development spenders in the U.S., even ahead of Google. Alibaba’s R&D investments, if viewed in absolute terms, lag far behind Bezos & Co. However, that may not last forever. As a percentage of net revenue, Alibaba outspends mighty Amazon in investing for the future.

Alibaba has planned to invest $15 billion in R&D over the next three years — $5 billion per year. All the more impressive is that this represents a significant jump from 2017’s $3.2 billion in R&D spending.

Amount in USD Billions

(12 Months Ended Dec 31, 2017)

Alibaba Amazon
R&D Expenditures 3,249 22,620
R&D Expenditures (as a % of Revenue) 11.6% 10.0%

Source: Yahoo Finance.

Source: Yahoo Finance.

As are many tech firms, Alibaba is investing huge sums to develop machine learning and artificial intelligence systems that aim to understand consumer spending better and make them buy more. While these technologies have yet to yield their potential, they have already started paying off. The intelligent personal recommendations on Alibaba’s Taobao app are driving strong growth in user engagement and conversion.

What investors need to know

Alibaba is frequently referred to as “China’s Amazon.” But this doesn’t fully represent reality. There’s something much bigger going on at the house the Jack Ma built.

Alibaba has delivered growth while simultaneously yielding profits – something Amazon has long been criticized for failing to deliver. They rarely compete, with each staying in their respective corners, but it’s worth wondering who would win in an all-out battle. The four little-known assets laid out above, and Alibaba’s exceptional cash-flow generation, make it the odds-on favorite. That its shares trade for just 28x forward EPS estimates, far more rational when compared with Amazon’s mirage-like 97x forward multiple, makes Alibaba the horse to bet on.

Tops Files Chapter 11

Tops Files for Chapter 11

Heavy debt, pension dispute cited; company eyes quick restructuretops marketTops Markets LLC on Wednesday filed for protection under Chapter 11 of the U.S. Bankruptcy Code in order to undertake a balance sheet restructuring and renegotiate contracts including collective bargaining agreements and pension obligations to union workers.

The Williamsville, N.Y.-based company, which operates 169 stores under the Tops and Orchard Fresh banners, said its debt holders have provided $125 million in debtor-in-possession financing as well as a $140 million DIP facility from Bank of America. Tops said it would use the new loan from lenders to pay off pre-petition revolving credit, and that the $140 million Bank of America facility would provide liquidity during its stay in Chapter 11.

The company in a statement said it expects to conduct “business as usual” during an anticipated six-month stay in Chapter 11 and that it intends to fully pay its vendors under normal terms. C&S Wholesale Grocers, Tops’ major grocery procurer, has extended the company an extra week of trade terms in exchange for Tops paying a portion of C&S’s prepetition claims.

In the filing before Judge Robert Drain in the Southern District of New York, Tops characterized its business as relatively healthy, but said obligations of its heavy debt load had constrained its ability to invest and put it at a disadvantage against both gourmet and discount competitors.


“Tops has built strong market share and our stores continue to distinguish themselves by offering quality products at affordable prices with superior customer service,” Frank Curci, CEO of Tops, said in a statement. “We believe the financing that we received from our noteholders is a vote of confidence in our business. Our operations are strong and we have an outstanding network of stores and a talented team to support them. We are now undertaking a financial restructuring, through which we expect to substantially reduce our debt and achieve long-term financial flexibility. This will enable us to invest further in our stores, create an even more exceptional shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market.”

Tops is owned by six senior executives who purchased the company from Morgan Stanley Private Equity in 2013, along with five representatives of its debtors. In a declaration filed in court, Michael Buenzow, a senior manager with FTI Consulting, said the previous owner “saddled the company with an unsustainable amount of debt on its balance sheet.” FTI was engaged by Tops in December to assist efforts to renegotiate terms with a committee of its debt holders. Buenzow was subsequently named chief restructuring officer.

Tops currently has approximately $715 million of pre-petition funded indebtedness, including $560 million of senior secured notes due in 2022 and an asset-based revolving credit facility from Bank of America with $68 million outstanding. Tops also has $34 million in letters of credit and a $10 million first-in last-out term loan, for a total outstanding amount due Bank of America of approximately $112 million.

Morgan Stanley acquired Tops from Ahold in 2003 for approximately $300 million and borrowed against it several times, often to pay itself a dividend. In 2009, the company issued $275 million in notes, from which Morgan Stanley took a $105 million dividend. An additional $75 million in debt was issued in 2010 to fund an acquisition of Penn Traffic. New notes totaling $460 million were issued in 2012, which redeemed previous debt and paid another $100 million dividend; and in 2013, a $150 million debt issue was used nearly entirely for a $142 million Morgan Stanley dividend.

Tops has also been embroiled in a longstanding dispute with the Teamsters union concerning a withdrawal liability of in excess of $180 million arising from Tops’ acquisition of Erie Logistics LLC from C&S in December 2013, and is party to pension funds with the Teamsters and the United Food & Commercial Workers that are underfunded by approximately $393 million.

Tops said it would endeavor to use tools in Chapter 11 to address its pension obligations and resolve the Teamsters arbitration dispute. Around 80% of Tops’ 14,000 workers are represented by unions.