mmurray's Profile

Great read! In an environment of increasingly protectionist trade rhetoric (notably in the UK and US), it’s interesting to ponder the repeal of an archaic, protectionist policy in the US. It seems likely that SEACOR can play on both fronts – increasing it’s competitiveness in the US market while continuing to lobby behind the scenes for a protectionist policy it clearly benefits from. For example, working to cut costs would benefit the company regardless of its competitive environment. Given gridlock in Congress and the tilt in political winds toward increasing rather than decreasing barriers to trade, it seems unlikely that the Jones Act will be going away anytime soon. Interesting to note, there are fewer than 100 ships that make up the fleet covered by the Jones Act![1] While protecting this industry raises costs for American consumers, given it’s small size it’s unlikely to attract much attention from a distracted American government anytime soon.

[1] “Puerto Rico’s Challenges After Hurricane Strengthen Case Against The Jones Act,” Forbes, Nov 2017 (https://www.forbes.com/sites/ucenergy/2017/11/07/puerto-rico-has-had-a-hard-time-getting-fuel-for-our-next-disaster-lets-fix-the-problem/#3f4585b36646)

Marissa, thanks for this fascinating read. I’m interested in your comments about the potential for 3D printing to significantly reduce the costs associated with manufacturing medical devices. Could this significantly expand access in parts of the world that are currently underserved by medical device technology? According to Market Data Forecast, “the Middle East and Africa [Medical Device 3D Printing] market is projected to reach USD 223.44 million by 2021, at a CAGR of 25.27% from 2016 to 2021.”[1] While it’s unclear what segment of consumers these devices would reach, bringing low-cost medical devices to developing markets is a tantalizing prospect. Of course, robust medical systems – doctors, hospitals, healthcare coverage – will be necessary to expanding the medical device market as well. How to contribute to the development of such supporting infrastructure is something companies like Johnson & Johnson will have to take into account as well.

[1] “Middle East and Africa Medical Device 3D Printing Market is poised to cross USD 223.44 million in 2021,” Nov 3, 2017. https://www.medgadget.com/2017/11/middle-east-and-africa-medical-device-3d-printing-market-is-poised-to-cross-usd-223-44-million-in-2021.html

Thanks, Jordan. Some interesting questions ahead for Uber and the other contenders in the driverless race as well. In an interesting update since the time of your post, in a $1.4 billion deal, Uber has agreed to purchase 24,000 autonomous XC90 SUVs from Volvo between 2019 and 2021. Thus, in response to the question posed at the end of your piece, it looks like Uber is taking the route of owning its own fleet, although the 24,000 number has been described by Uber as a “general framework” rather than a confirmed number of vehicles to be purchased.[1] Under this scenario, is Uber best to manage a potentially massive, global vehicle fleet? Uber has a number of strong core competencies, such as its software development capacity and a muscular (some say overly-aggressive) lobbying arm. Can it also become a national or global logistics company, on par with FedEx or Amazon? Or a leading fleet operator like Enterprise or Wal-Mart? We’ll have to stay tuned!

[1] “Uber orders up to 24,000 Volvo XC90s for driverless fleet,” Tech Crunch, Nov 20, 2017 (https://techcrunch.com/2017/11/20/uber-orders-24000-volvo-xc90s-for-driverless-fleet/)

Thanks, RKR, for sharing these thoughts. As we’ve seen in the news over the last year or so, the uncertainty surrounding Brexit has already had ripple effects across Europe and the global economy. Thus, I was surprised to find that despite the threats to Irish manufacturing outlined in your post, Irish manufacturing is surging. A Reuters headline today reads, “Irish manufacturing growth surges to 18-year high.” In fact, the boom is the steepest measure of growth in the referenced survey’s history. My question is, what is driving this counter intuitive trend? Is it temporary? Are other macroeconomic trends, for example strengthening global growth, overpowering any Brexit-related headwinds facing the sector? Or, do the opportunities associated with Brexit for a country like Ireland outweigh the potential downsides? For example, will manufacturing capacity move to Ireland to remain inside the EU? With a long slog of Brexit negotiations ahead, only time will tell.

[1] “Irish manufacturing growth surges to 18-year high,” Reuters, Dec 1 2017 (https://www.reuters.com/article/us-ireland-economy-pmi/irish-manufacturing-growth-surges-to-18-year-high-pmi-idUSKBN1DV41H?il=0)

GM is not alone in making bold pledges to increase the fuel efficiency of its fleet. Ford has said it will release 13 electric or hybrid vehicles by 2023. Abroad, Volkswagen and Volvo have set ambitious targets as well (30 electric cars by 2025, and a 100% electric or hybrid fleet by 2019, respectively).[1] The writing is on the wall, and all these companies seem to recognize the need to adapt. While the current anti-regulatory environment in the United States has temporarily created a potential opportunity for companies to roll back environmental standards, the world is moving in the opposite direction, and the US likely will return to the same path as well.

In this environment, I think it’s a competitive imperative for GM to be partnering with it’s supply chain now to make the electric transition. Cutting edge technology and efficient, low-cost manufacturing will be essential to competing in the coming low-carbon vehicle market, and GM stands to lose major market share to rivals if it finds itself caught flat-footed. The timing is an open question – pushing trucks and SUVs in the short-term may allow GM to cash in on its higher margin vehicles in the near term, but holding off on investing in supply chain capabilities is only denying the inevitable.

[1] “Automakers Say They’re Going Electric–But They’re Also Lobbying For Weaker Fuel Standards,” Fast Company, Nov 17, 2017 (https://www.fastcompany.com/40497293/automakers-say-theyre-going-electric-but-theyre-also-lobbying-for-weaker-fuel-standards)

Thanks, Tanvi, for sharing this analysis. I likewise examined the effect of climate change on agricultural supply chains, focusing on the work of Nestlé. Like Cargill, Nestlé is working with smallholder cocoa farmers to promote sustainable agricultural practices, as are many other companies in the sector. In fact, recognizing that this is a common challenge across the industry, food and beverage companies have partnered together under the World Cocoa Foundation (WCF) to create a sustainable and productive cocoa sector. The includes “cocoa and chocolate manufacturers, processors, supply chain managers, and other companies worldwide, representing more than 80 percent of the global cocoa market.”[1] This is a potentially interesting example of how company’s that are traditionally competitors, are banding together in a pre-competitive fashion to tackle major global issues (such as climate change and rural poverty) that no one company can solve alone. It will be interesting to watch the degree to which these companies are able to effectively collaborate, and what the limits of that collaboration will be.

[1] “The World Cocoa Foundation (WCF) is an international membership organization that promotes sustainability in the cocoa sector,” World Cocoa Foundation website (http://www.worldcocoafoundation.org/about-wcf/history-mission/)