It’s the end of the work week and we wanted to update our readers to previous Supply ChainMattersposted commentaries in the following news related snippets.
New U.S. Emergency Directive for Crude Oil Shipments
At the end of April, we posted a breaking news commentary concerning a CSX freight train hauling tank cars consisting of crude oil originating from North Dakota’s Bakken region had derailed in downtown Lynchburg Virginia. Even though this train was traveling what was reported to be 24 miles per hour, the derailment caused 13 of the total 105 tanks cars to derail, explode and catch fire. Three of these tank cars plunged into the nearby James River causing the potential for a hazardous spill. This was the second train derailment involving crude oil so far this year in the U.S. amid continuing calls for improved tanker car safety standards. That response has now occurred.
Once again declaring that the movement of crude oil by rail is an “imminent hazard” the U.S. Department of Transportation has now issued an emergency directive to U.S. railroads indicating that they must inform individual state emergency officials within the next 30 days, when crude oil shipments are moving across each state jurisdiction. Disclosure requirements include the number of trains scheduled each week, and the specific rail network routings. Transportation officials are strongly urging shippers, including oil producers to stop utilizing older DOT-111 tank cars, recommending the use of tank cars with “the highest level of integrity in their fleet when transporting Bakken crude oil.” While these directives fell short of declaring an outright ban, which Canadian regulators have already undertaken, it is the strongest language thus far from U.S. regulators regarding ongoing safety concerns and calls for collective industry action.
Telsa Moves a Step Closer to Vertical Integration
In mid-February, general, business and social media was abuzz with the announcement that electric automobile maker Telsa Motors announced audacious plans to build its own $5 billion electric battery “gigafactory” capable of supplying up to 500,000 electric vehicles per year. Panasonic is the current primary supplier for Telsa’s lithium-ion batteries and in February there were indications about the possibility that Panasonic and other unnamed Japanese suppliers could be contemplating a $1 billion investment in this proposed facility.
Telsa CEO Elon Musk disclosed this week that Panasonic has now signed a letter of intent to join the project. A final agreement is expected sometime later this year. Telsa further indicated that Arizona, Nevada, New Mexico and Texas are each being evaluated as the potential home of this factory. Telsa is now producing upwards of 700 of the company’s Model S model per week with plans to ramp production to upwards of 1000 per week by the end of this year.
A few weeks ago, we picked-up on a Canadian Wall Street Journal published report indicating that supply chain planning and response management technology provider Kinaxis was in the midst of preparing for an IPO. That report turned out to be accurate and the Preliminary Prospectusfor Initial Public Offering is now being made available to potential investors within Canada, where the IPO is restricted to. Supply Chain Matters obtained a copy of the offering and can share with our readers that Kinaxis total revenues were $38 million in 2011, $46.6 million in 2012, and $60.8 million in 2013. The preliminary prospectus is subject to completion or amendment and there will be no sale or offer to buy until receipt of the final prospectus has been issued.