Amazon Edging Ever Closer to the Shipping Indusrty

This article is reprinted from “Business Insider”, which points out that Amazon has its own considerable demand for freight services, and is closing the gaps in its logistics supply chain. Now that Amazon has moved into the trucking industry. Trucking is a highly fragmented and deeply conservative industry, just like shipping. Once Amazon has understood and “conquered” trucking, it will be a relatively small step to apply these techniques to the shipping industry.

Craig Jallal


Amazon is secretly building an ‘Uber for trucking’ app, setting its sights on a massive $800 billion market

 Author = Eugene Kim, “Business Insider”, Dec. 15, 2016, 7:50 PM

 Amazon is building an app that matches truck drivers with shippers, a new service that would deepen its presence in the $800 billion trucking industry, a person with direct knowledge of the matter told Business Insider.

The app, scheduled to launch next summer, is designed to make it easier for truck drivers to find shippers that need goods moved, much in the way Uber connects drivers with riders. It would also eliminate the need for a third-party broker, which typically charges a commission of about 15% for doing the middleman work.

The app will offer real-time pricing and driving directions, as well as personalized features such as truck-stop recommendations and a suggested “tour” of loads to pick up and drop off. It could also have tracking and payment options to speed up the entire shipping process.

This is the latest in Amazon’s rumored plan to become a full-scale logistics company that controls the entire delivery cycle. Over the past year, Amazon has purchased thousands of trailer trucks and dozens of cargo planes while launching new “last mile” services like Amazon Flex that take packages straight to the end customer.

But the broader goal is to improve the “middle mile” logistics space, which is largely controlled by third-party brokers that charge a hefty fee for handling the paperwork and phone calls to arrange deliveries between shipping docks or warehouses. It would make shipping more efficient and cheaper not just for its customers but also for Amazon, which has been dealing with rising shipping costs lately.

The new service would put Amazon squarely in competition with numerous startups in this space, such as Convoy and Trucker Path, while putting a direct hit on incumbent players, including the publicly listed ones like C.H. Robinson and J.B. Hunt. Amazon is a customer of C.H. Robinson, while CEO Jeff Bezos is an investor in Convoy.

Amazon declined to comment.

‘Exciting and confidential’ initiative

The team for this project is scattered around Seattle, Minneapolis, and Amazon’s offices in India. The Minneapolis office in particular, is expected to have more than 100 engineers by next year working mostly on this project, according to Business Insider’s source.

In fact, one of the job postings for the Minneapolis office says Amazon is looking for a principal product manager to work on “an exciting and confidential initiative in middle-mile transportation organization.”

Another job posting for a software-development engineer in Minneapolis says Amazon’s Transportation Technology division is building software that optimizes the “time and cost of getting the packages delivered.”

It’s unclear why Minneapolis has become such an important part of this project. But the city is close to the headquarters for C.H. Robinson, Target, and Best Buy, possibly making it easy to hire people away from those companies.

RBC Capital Markets predicts Amazon’s package volume will surpass FedEx in three years and UPS in seven years.

$800 billion industry

The opportunity is huge for Amazon. Roughly 84% of all freight spending is on trucking, and the market is estimated to be worth $800 billion, according to the trucking startup Convoy.

Trucker Path, another startup in this space, says truck driving is the most common job in 29 US states, but it’s a market that’s been slow to adopt new technologies, as most of the trucking companies are small businesses and 90% of them own fewer than six trucks.

But unlike its competitors, Amazon has an advantage in not having to worry about demand from the shipper’s side. To make an “Uber for trucking” marketplace work, you need demand from both sides of the equation – shippers and drivers. But Amazon already has a giant shipping network and a rapidly growing package volume, so theoretically it shouldn’t be hard to find a load match for the drivers on its platform.

There are some regulatory problems that need to be addressed. For example, drivers are not allowed to press more than one button when making a call while driving. There are also strict limits on how long drivers can go without a break. Amazon may be considering adding Alexa’s voice controls and new auto-logging features to get around these issues.

Trucking has certainly been one of the hottest spaces in tech over the past few years, with big startups like Uber joining the race. Amazon is the new 800-pound gorilla that everyone will have to be aware of.

C.H Robinson’s stock went down roughly 2.5% after Business Insider reported Amazon’s plans:

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.



Futurenautics: The Rime of the Future Mariner

From the FutureNautics website (


In honour of the UK’s National Poetry Day. The Rime of the Future Mariner, with apologies to Coleridge. And everyone else.


The Rime of the Future Mariner


I thought him an ancient mariner,

When he LinkedIn with me.

His profile pic showed crusty beard,

And picture of the sea.


Let’s start a conversation”

Quoth he, ‘for I bring,

A tale of shipping’s future,

via LinkedIn messaging.”


Said I, “I’m LMFAO,

Oh crusty bearded loon,”

But as his rime unfolded I saw,

That I had typed too soon.


Heavy was my workload,

I had no time for chats,

Upgradeth I to Windows 10,

For videos of cats.


But sayeth he, “This rime of mine’s fantastic,

It enthralls,”

Then describeth he, what seemed to be,

A total load of rubbish.


A mariner, he claimeth,

He had surely been,

On board an LNG carrier,

Back in two-thousand fourteen.


A satcom link, predictive text,

And gas 161 below,

Together caused the accident,

That begat his tale of woe.


Predictive algorithm,

combined with cryogenic freeze,

Propelled him to the future.

And buggered up his knees.


“I have seen what you see now,

And what is yet to come.

I can now vouchsafe to you

Shipping 2051.”


“Begone, you fiend,”

I typed at speed, but nary checked before,

Predictive text corrected it,

Begin, friend,” ‘s what he saw.


He did, “The future’s different,”

The Mariner did warn,

“No Ballast Water Management, no slow steaming.

Or porn.”


“No Mariner, it will not be,

As long as we have tankers,

We’ll still have ballast water,

And crews will still be reading the magazines for the articles.”


“Men and ships are now as one,”

The Mariner replied.

“All of us connected,

With technology inside.”


“Cargoes are intelligent,

Supply chains all holistic,

We talk no more of shipping

We are all now blue logistics.”


“But Mariner, look at us today,

Look at what you see,

Speculation in tonnage,

And overcapacity.”


“The industry is struck with gloom,

In almost all its facets,

The liner guys are struggling,

For a return on their net assets.


“Dry bulk is a basketcase,

And tankers on the slide,

How do we get from here to there?

Where is the upside?”


Quoth he, “The fate of shipping,

Is entirely your decision,

But if you desire any lucrative hire,

You’re going to need a digital vision.”


“But people always will need ships,

The IMO says it’s true.”

Pauseth did the mariner; then came the answer,



“Leave not this in your inbox,

Nor save it up for later,

You need more linkativity, connectitude,

Big Data.”


“Focus ye on customers,

Industry four-point-o,

Collaborative platforms,

Analytics, data flow.”


My mind was filled with wonder,

As the tale was told to me,

Of shiny things and slimy things,

And new technology.


When it was done I raised my hands,

And typed upon the keys,

“Mariner, you have to share,

Your visions such as these.”


“You must go out into the world,

Get on the conference circuit,

Do some social media,

Shipping Podcast; Holly Birkett.”


The silence from the Mariner,

Came straight from Davy Jones,

T’was chilling, as the knowledge

of it echoed in my bones.


“Oh Mariner, will you confess,

Your person is a lie?

This flesh’s pretence: you’re intelligence.

The answer came:  “AI, AI.”


He had no beard, nor head,

Nor heart, nor notion of the sea,

But he knew all of shipping’s past,

And shipping yet to be.


He’d earned no love, nor honour,

Nor he to any owed.

For the future Mariner I’d known,

Was nothing more than code.

What Might Have Happened to Sterling

What Might Have Happened to Sterling… PolemicTMM

Nobody seems to know what caused the dip in sterling on the Asian markets on 7 October 2016, but forex currency blogger @PolemicTMM has written a very funny and informative post on how he or she imagined what went on the trading floor. It is reproduced below, but if you want to read the original, it can be found here.


GBP goes EURCHF. What’s going on.

Ok , so I was wrong. Cable was not a good buy 2 days ago and just to prove me REALLY wrong the marvelous Antipodean time zone decided to ram GBP in a way that hasn’t been seen since the SNB spoofed EURCHF.

It’s the small hours of London Friday morning for me  and the reasons for GBP’s freediving world record attempt haven’t yet been formulated. Now I’m afraid that if you started reading this expecting me to tell you what I guess is going on in GBP, then sorry, I don’t know. But having worked in FX for a good chunk of my life I can have a good guess at what is now going on in the banks.

First, every salesperson is struggling to call all their clients who had ‘call levels’ at zones never expected to be hit, whilst trying to fill orders in systems at levels that they think they can get away with. Oh, hang on, no they can’t do that anymore as they need audit trails. So, they will all be huddled around spot desks arguing over whose order was hit at what. Said spot dealers will be shouting a lot and staring at an automated blotter that is slowly dripping in a queue of trades that their antiquated order and back office system in some far off distant place on the planet is trying to process. Basically, there will be a lot of ‘WHAT THE FUCK IS MY POSITION.. ARRRGH ‘ going on.

Meanwhile, clients will be calling in demanding to know why their stops were done 7% below current market and why no one called them. Because if they had been called they would have bought it back at 8% below current markets because they are all retrospective geniuses.

Managers will be trying to recite the rules of engagement for filling stops but can’t find them so call compliance. However, compliance is asleep because they are mostly based in head office and that isn’t in the Antipodes, apart from the Antipodean banks whose compliance officers will be teaching some course to the catering staff on how not to deal with Yemeni banks.

By now the dealing systems will be catching up with what’s going on and the spot traders now fit into two categories:-

Group 1 who look at their position screens and see a vast profit who split into groups ‘A’ and ‘B’. ‘A’ stays very quiet knowing that sales will want some of the profit if they see how much it is and ‘B’ who stand up and declare themselves as trading Gods.

Meanwhile Group 2, on seeing vast losses, immediately write emails to every manager under the sun blaming their staggering losses on system latency and the ridiculous guaranteed stop levels that sales made them undertake. If they are lucky management will swerve the losses into a contingency book, but if they are unlucky and the bank was thinking of replacing them with a ‘Raspberry Pi’ algorithm, they will be out of the door by close of Friday.

But back to sales. Those that are still on the phone are quoting the reason for the fall on anything that they feel everyone else is saying because no one has a real clue. They will probably repeat what JPMChase or Goldman say as they reckon that the guys there are cleverer than them and more likely to know. So, clients will currently be being told that it is due to- “Barriers being hit at 1.25, 1.20 , and 1.15” and if they can’t even manage that will say “Stop losses”, which is a great generalised term that demands no justification. But some foolish folk will have done a Bloomberg News search for GBP and decided that it is due to the news that fracking had been allowed in North West England. Which is of course rubbish, because we all know that it happened because Diane Abbott was made the shadow Home Secretary.

By now very senior management will have come down to the dealing room. Bearing in mind this is out of London time zone, the senior managers involved will have absolutely no idea whatsoever about Sterling so will ask questions to frantic spot and sales folks along the lines of “Has Brexit been announced?” or “is this is a big move?” The frustrated dealing staff will have to tread a thin line with them, alternating between wanting to tell them to piss off and ingratiating themselves with them as, with the size of the losses they can see, they may well be up before them the following morning.

Meanwhile sales are noted to be only saying, into phones and Bloomberg chats, “But seriously, that’s where it was” and starting to swear at overseas sales coverage who are trying to goad them into either filling their clients better or having any profits accruing through their clients stops reallocated back to them rather than staying in the center thatripped them off did the execution.

The options trading desk will have appeared to have turned Greek as that is all they are speaking, shouting things like .. “Watch your gamma”, “check your theta”,” where did I trade that delta” and “Oh shit, they said you made money shorting vol. “

For the sales guys with no clients with GBP orders, they will be feeling rather smug and trying to sound intelligent by quoting correlations as to what this should do for other pairs. Such as “Well with the cross correlations we should see a pick up in MXN/CNH vol and our model says that the 3m/1yr calendar spread is the way to play it”, only to find that if they try to get a price from their options desk they are told to “fuck off, haven’t they seen what is going on in GBP”.

So, it will all be fun and games. Do I care? Not a bit. Because I am sitting at home, it’s the wee hours of the morning and I am about to go to bed chuckling mischievously to myself, knowing that London FX sales folk are going to have one hell of a miserable start to the day explaining to their clients why they have just lost 7% of their company’s hedge book.

Oh and let’s not forget all those corporate treasurers dusting off the wording for their ‘due to FX volatility, losses were greater than forecast’ statements to add to this year’s accounts.


Watch LNG Bunkering Vessel Under Construction

LNG Bunkering is becoming a reality.

Let’s Hope Amazon Don’t Take Too Close a Look at Shipping

It is worth taking the time to read this Bloomberg article on Amazon, and then think what would be the impact if Amazon turned its attention to the shipping leg of the logistics chain.

VV Market Report and Country Report

VesseslValue has redesigned its august_market_report. The latest one is for the month of August 2016, and contains commentary on values.

The country report looks how_many_vessels_at_demolition_value and the spread across the sectors and regions.

Khalid Hashim of Precious Shipping Explains One Belt, One Road in Splash 24/7

This article is from Splash 24/7. I think Khalid Hashim of Precious Shipping presents an excellent explanation of what China means by One Belt, One Road.

One Belt, One Road explained

Khalid Hashim from Precious Shipping writes exclusively for Splash on China’s massive intercontinental infrastructure plans.

A Google search for One Belt, One Road (OBOR) gives you about 15,700,000 results. Total spending on OBOR, in those same articles, varies from a low figure of $1.2trn to a high figure of $21trn. This concept currently covers some 65 countries in three continents encompassing 4.4bn people. The projected investment for OBOR at $1.4trn is about 12 times larger than the Marshall Plan, which was about $120bn in today’s value. And to top it all, there are literally hundreds of companies established in Hong Kong with similar names. And that is the hype generated by OBOR.

So what exactly is OBOR? It is a conceptual plan, a vision for greater cooperation, inclusiveness and higher growth among several countries put up by Chinese President, Xi Jinping in late 2013 with an eye on the old historical Silk Road but very much focusing on the current geopolitical tensions in our unipolar world, with the sole hyperpower, the USA involved in many wars/skirmishes mainly in the Middle East, Africa and Afghanistan. OBOR is based on ‘win-win’ cooperation and overcomes geopolitical confrontations that threaten to bring the world close to war. It has the potential to help the world to get rid of its current crises.

If you were to access the official Chinese web site for the OBOR concept you would find the following:

“When Chinese President Xi Jinping visited Central Asia and Southeast Asia in September and October of 2013, he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road (hereinafter referred to as the Belt and Road), which have attracted close attention from all over the world. At the China-ASEAN Expo in 2013, Chinese Premier Li Keqiang emphasized the need to build the Maritime Silk Road oriented towards ASEAN, and to create strategic propellers for hinterland development. Accelerating the building of the Belt and Road can help promote the economic prosperity of the countries along the Belt and Road and regional economic cooperation, strengthen exchanges and mutual learning between different civilizations, and promote world peace and development. It is a great undertaking that will benefit people around the world. The Initiative is an ambitious economic vision of the opening-up of and cooperation among the countries along the Belt and Road. Countries should work in concert and move towards the objectives of mutual benefit and common security. To be specific, they need to improve the region’s infrastructure, and put in place a secure and efficient network of land, sea and air passages, lifting their connectivity to a higher level; further enhance trade and investment facilitation, establish a network of free trade areas that meet high standards, maintain closer economic ties, and deepen political trust; enhance cultural exchanges; encourage different civilizations to learn from each other and flourish together; and promote mutual understanding, peace and friendship among people of all countries. We should jointly advance the construction of cross-border optical cables and other communications trunk line networks, improve international communications connectivity, and create an Information Silk Road. We should build bilateral cross-border optical cable networks at a quicker pace, plan transcontinental submarine optical cable projects, and improve spatial (satellite) information passageways to expand information exchanges and cooperation. We support localized operation and management of Chinese companies to boost the local economy, increase local employment, improve local livelihood, and take social responsibilities in protecting local biodiversity and eco-environment. We should increase cross-border exchange and cooperation between credit investigation regulators, credit investigation institutions and credit rating institutions. We should give full play to the role of the Silk Road Fund and that of sovereign wealth funds of countries along the Belt and Road, and encourage commercial equity investment funds and private funds to participate in the construction of key projects of the Initiative. We should increase exchanges and cooperation between non-governmental organizations of countries along the Belt and Road, organize public interest activities concerning education, health care, poverty reduction, biodiversity and ecological protection for the benefit of the general public, and improve the production and living conditions of poverty-stricken areas along the Belt and Road. We should enhance international exchanges and cooperation on culture and media, and leverage the positive role of the Internet and new media tools to foster harmonious and friendly cultural environment and public opinion.”

In terms of fund raising, spending and activity in OBOR countries, so far the following has been accomplished.

· The Asian Infrastructure Investment Bank (AIIB) has been set up and capital funds of $40bn have been injected. The financial firepower of the multilateral AIIB will likely be much larger than the initial capital commitment of $100bn from its 57 member countries.

· The Silk Road Fund has been set up and is expected to have a corpus of $40bn.

· The BRICS’s New Development Bank (NDB), initially committing $100bn.

· The New Development Bank, which is the funding source for the BRICS countries has $100bn allocated.

· China Development Bank has already committed to invest $900bn in OBOR projects.

· Hong Kong-based China Merchants Holdings International intends to invest in 10 overseas ports in Russia, West Africa and Southeast Asia in a bid to drive China’s OBOR strategy.

· PowerChina has four projects in Pakistan with a total installed capacity of 182MW, a 24MW project in Vietnam and a 60MW project in Thailand. In 2015, Goldwind, China’s leading wind turbine manufacturer, won supply contracts for four wind projects in Pakistan with a total installed capacity of more than 270MW. By the end of 2018, Goldwind’s total installed capacity in Pakistan will exceed 400MW, accounting for one third of the country’s capacity.

· The Bangladesh-China-India-Myanmar Economic Corridor has already been translated into reality.

· Ricoh Europe has transported containers from Rotterdam via rail taking maximum 20 days to reach China without any delays. And, a train releases far less CO2 than a plane which would be the alternate means of transport.

· Chinese companies invested nearly $15bn in 2015 in countries participating in OBOR, up one-fifth from 2014. Forty-nine countries along the economic corridor invested $8.2bn in China in 2015, up 25%.

· Europe, gripped by economic weakness and debt, is crying out for Chinese investment. Chinese state enterprises and funds are eagerly participating, buying up ports, real estate and technology firms from Greece to the UK. China views Europe as the terminus for its OBOR project.

· China’s trade with OBOR countries has been growing at an average of 18.2% annually over the past decade and accounts for 20% of the country’s total foreign trade volume. China’s direct investments in OBOR countries increased from $240m to $9.27bn during the past decade for an annual growth of 44%.

· The first cargo train from China arrived in Tehran, Iran, in February 2016 after a 14-day journey travelling a distance of 10,399 km through Kazakhstan and Turkmenistan from China’s eastern Zhejiang province.

· China’s efforts include the $46bn China-Pakistan Economic Corridor.

· Other key initiatives include Chinese investment in Central Europe such as the China – Belarus Industrial Park, signing of 33 deals in Kazakhstan, amounting to $21.6bn covering mining, engineering, processing, transport, oil, gas etc.

· China National Electric Engineering Company is involved in the high-quality construction of Vitebsk Hydroelectric Power Plant in Belarus, an environmentally friendly source of energy.

· According to a PwC report released in February, about $250bn in projects have been built, recently started or have been agreed on and signed in relation to the belt and road initiative.

· Gwadar deepsea port in Pakistan, operated by China Overseas Port Holdings was built by China Harbour Engineering Company.

· In Myanmar a contract has been agreed with China in 2015 to build a deepsea port at Kyaukphyu.

· A new deepsea port at Sonadia Island, Bangladesh is being constructed with Chinese involvement.

· Two projects in Sri Lanka involving China are a Colombo container terminal and new port at Hambantota.

· At the European end of the Maritime Silk Road is China’s investment in the port of Piraeus, Greece.

But the real merit of OBOR lies in its geopolitical benefits, not just for China, but for all countries in the world and not just those involved with this concept. Just to list a few of these:

· More than 80 officials, ambassadors and representatives of 40 Silk Road countries met at Valencia, Spain’s St. Pius V Museum to pray for peace among the route’s four major religions: Christianity, Islam, Judaism and Buddhism stressing the current appalling situation of expulsions, uprooting and refugee flows currently occurring in the Mediterranean.

· OBOR will act like a dam and hold back the stream of refugees clamouring to enter the EU by bringing peace, economic development and job creation that will dove tail with the infrastructure aims of OBOR.

· The jobs created by CPEC would go a long way in addressing the employment concerns of the bulging youth population of Pakistan, and the economic activity generated in the northern parts of the country, would bring back long lost stability and peace to terrorism hit areas.

· China has long been concerned at links between Islamist militants in Central Asia and those Beijing accuses of promoting separatism in the violence-prone far western region of Xinjiang. With OBOR providing massive amounts of jobs, generating and increasing economic activity, it will bring peace and prosperity to the troubled regions in China as well as in the Central Asian Republics.

· OBORs many infrastructure projects would benefit China’s poor inland regions, integrating them with the global economy and helping to mitigate China’s rapidly growing wealth gap.

· China would gain credibility and influence on three continents, 65 countries and 4.4b people via OBOR.

· OBOR ports in Asia, Africa and Europe reduce dependence on trade passing through potentially insecure choke point of the Malacca Straits.

There are, of course, a few benefits that would be very helpful to the Chinese economy and, indirectly, a boon to dry bulk shipping, such as:

· China will utilize the ~30% idle steel mill capacity to produce steel at possibly the lowest cost in the world for the OBOR infrastructure projects.

· Coke, the other ingredient to produce steel, is in a similar oversupply/low price situation, so steel should be produced very cheaply indeed.

· Chinese Cement plants have an idle capacity of ~40% allowing them to produce cheap cement for OBOR.

· Employment in the steel and cement industries in China will no longer be at risk.

· China would be able to shift their labour intensive industries away from the full employment, high labour cost, and expensive real estate of the south and the east to the west of the country where labour is plentiful, is cheap and land isn’t expensive thereby prolonging the life of labour intensive industries that would be connected with first class infrastructure to their respective export/domestic markets.

· The above actions will allow the Chinese economy to smoothly transition to a services and consumption led model.

· And all of the above would be achieved without having to bomb or kill anyone in a pure win-win solution.

And that, dear reader, is OBOR explained.

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