Sergio Porres

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On November 26, 2017, Sergio Porres commented on AUGMENTED REALITY: A GAME-CHANGER FOR THE LOGISTICS OF TOMORROW :

AR can significantly improve human operations, but in the end, the operation will still be held to human limitations. We can probably agree that delivery and picking are not very value-added tasks in which a human being can bring enormous value: they are usually a routine, require tiring activities (such as long driving or parcel lifting) and they are prone to errors. True, AR can enhance the current situation but, would it not make more sense for a firm to invest in a technology that can entirely remove the human factor and improve productivity by an order of magnitude?

The technology is already being deployed on the warehouse part of the business, with a firm as Symbotic [1] already selling fully automated warehouses to its clients. On the driving side, self-driving trucks still seem a bit far from being a reality but tremendous improvements in the last years [2], thus AR would probably be only a temporary solution.

[2] “Self-driving car technology: When will the robots hit the road?”, Mckinsey, May 2017:

On November 26, 2017, Sergio Porres commented on Hawaiian Electric’s Supply-Chain Transition to 100% Renewables :

Islands tend to be a very difficult challenge for energy production. They are isolated, they do not always have spare land to build energy plants and risks tend to be concentrated all together (in case of floods, for example). Therefore, achieving a 100% renewable energy production is even more challenging than in the mainland, particularly if they are far away for any land and the size of them is not very significant [1], as is the case of Hawaii.

To ensure energy reliability and affordability, I believe HEI should acknowledge these difficulties and educate the public in the islands, developing practical long-term projects that drive the islands towards that target even if they are not 100% renewable. LNG as a bridge fuel is a very good example. Nuclear plants or fossil fuels with carbon capture and storage technology are also very interesting options to further explore. Not realizing how more challenging such a target (i.e. 100% renewables) might be for Hawaii versus non-island territories could lead HEI to make wrong decisions that risk the very first targets any energy system must have: reliability and affordability.

[1] Jeff McMahon, “100% Renewables Increasingly Looks Possible”, Forbes, Oct 2016:

On November 26, 2017, Sergio Porres commented on There’s No Place Like Home: Deutsche Bank’s Return to Germany :

Deutsche Bank approach to Brexit seems to be fully aligned with their prior announced pivot to basing its operations in Germany. However, one prior question arises: How will they manage a business focused in international banking and capital markets all from Germany given the large and massive market differences present in the world? Deutsche should probably set up a plan to mitigate the effects of misinformation or lack of local market knowledge if they are to carry out such a plan. It is true that London was neither a location exposed to all the different characteristics of each market but it was a better fit for that than Frankfurt is.

My second reaction is that no assessment of the impact on the bank’s operation in the UK has been published comparing the different Brexit scenarios. What if the cost of a soft Brexit is lower than the cost of relocation? What if even a hard Brexit is less disrupting than the proposed plan? Should not the proposed plan try to maximize returns for Deutsche Bank given the aforementioned tight financial situation? It seems difficult to believe that the proposed solution is the best for any outcome of Brexit, regardless of its conditions. Deutsche should probably provide more insights on this issue to convince shareholders that their plan is sound.

On November 26, 2017, Sergio Porres commented on Boeing Navigates Nationalist Winds :

Although the result of Boeing suit against Bombardier might be far from ideal (given that Airbus has purchased 50% of the program for 1€ [1]), I believe Boeing was right to proceed in this way. A few decades ago, Airbus was in the same position as Bombardier is now, receiving government subsidies to develop new innovative aircrafts, resulting in the European manufacturer achieving ~50% market share in the large commercial aircraft market [2], which used to be dominated by Boeing. Allowing Bombardier to do the same amid Boeing inaction would be making the same mistakes two times, particularly given the very punitive tariffs the US government agreed to impose on Bombardier, practically closing the US market for this aircraft.

On the India issue, I agree that Boeing is making a good move to increase its sales, but I would be highly concerned about IP. If India is willing to build its own industry, there will be very large temptations to use Boeing patents and processes for the benefit of rivalling Indian companies and manufacturers, thus decreasing the value of Boeing in the long-term. How is Boeing planning to protect and enforce its IP in this new offshoring venture?

[1] Benedikt Kammel, “Airbus Boss Nails Bombardier Timing”, Bloomberg, Oct 2017:
[2] Alan Tovey, “How Airbus achieved the miracle of keeping a European project flying”, The Telegraph, Oct 2016:———keeping-a-european-pr/

On November 26, 2017, Sergio Porres commented on UPS: Innovating or not? :

In my opinion, some of the areas suggested for UPS to further evaluate (i.e. drones, driverless trucks and Amazon move into delivery), are very relevant to ensure UPS does not miss significant opportunities in its markets. However, I believe that these disruptions do not only threaten the small parcel shipping business, but the entire UPS freight business. If new technologies key in the delivery business (i.e. drones or driverless trucks) take off due to enhanced economics versus current technologies, those players who enjoy an advanced access and development of these would have a significant advantage over the rest, enjoying the opportunity to achieve a very large market share before anyone can catch up, given the investment and time required to make complex technologies work with a sustainable business model.

I agree that small parcel shipping could be more prone to disruption given its nature (clients are smaller, parcels are easier to handle, the cost of shipping can be very expensive relative to the goods transported etc.) but if this business is disrupted, any disruptor might be particularly tempted to enter as well the regular freight business, particularly if it has a financial capacity as large as Amazon’s.

On November 26, 2017, Sergio Porres commented on Maersk’s Shipping Lane in the Fight Against Global Warming :

My main concern about the approach Maersk is following is that it is mainly focused on measures that are economically interesting for them (e.g. increasing efficiency, which usually reduces the energy bill) or that provide them with a competitive advantage (e.g. regulations that favor more efficient players, as they are). However, this strategy, which could be optimal for Maersk, might not be so for society.

What if efficiency improvements no longer make economic sense in the future given the required investments? Should we trust that Maersk will continue to do them? What if regulations that favor more efficient players end up reducing competition by putting out of business several players and therefore give more power to remaining players to impose the policies that favor them most?

Legislators should be very aware of large companies’ potential to lobby in favor of certain rules and should try to develop incentives that push polluting companies to improve even if the enhancements do not pay by themselves.