Monthly Archives: October 2017

Taken from Citius Minds.com
http://www.citiusminds.com/blog/amazon-patents-a-drone-capable-of-in-flight-adjustments-to-achieve-efficacy/

After purchasing something on Amazon this weekend (as usual), I had to decide what shipping option to use and it reminded me of something we have talked about in tutorial recently: the potential for drone delivery in the future. While doing research on this topic, I came across a fellow Sauder student’s blog titled “Drones Delivering Innovation”. In his blog, Brendan Woodward talks about how autonomous drone technology has improved vastly over the past few years and the various applications it could be used for in the future. The benefits realized by the use of this new technology could be dramatic, but are they practical?

One of the main drawbacks I found while researching this topic was the carrying capacity of a drone. Unlike a large delivery truck that can carefully plan out its route and deliver many packages in a sequence, a drone can only take one package at a time. This means that in-between every shipment, the drone would need to fly back to the Amazon facility and get a new package. Without question, this would add extra time between deliveries and use up a massive amount of power. To keep up with demand, Amazon would need to have an astronomical number of drones constantly in rotation, and while some are charging, others are making deliveries. Also, as Mr. Woodward mentions, with these being autonomous drones, there are many complications that could arise, including how to prevent collisions with other objects or even animals. As one could imagine, these issues could significantly increase the cost of shipping which would ultimately be paid by the buyer or the seller.

Personally, I find this application of technology very interesting, but is it practical from a business standpoint? With current technology, I unfortunately don’t see this concept working on a national scale. The extra costs involved, and the number of drones needed to make this concept work may be too much for any company to handle. For the time being, I think this concept needs to remain a small-scale novelty service until technology improves.

Once these kinks are figured out, I think Amazon should pursue this concept. The two main advantages I can see are vertical integration and “blue ocean”. First off, if they start shipping using drones, this will cut out the need for them to use companies such as UPS and Fed-Ex. This gives them greater control over their operations. The other advantage is the “blue ocean”. No other company is using such a novel method of delivery right now and it would give them a point of difference to separate them from their competitors.

Word Count: 436

Taken from Business Insider
http://www.businessinsider.com/delta-bombardier-cseries-cs100-2016-12

Recently, the U.S. Department of Commerce imposed new trade penalties that include a 79.82% anti-dumping duty as well as a 219.63% preliminary countervailing tariff on Canadian based Bombardier Inc.’s C -Series jets sold in the US. The U.S. Department of Commerce has done this in response to Boeing’s complaints that Bombardier’s planes are unfairly subsidized, and to stand up for American companies and their workers. Tariffs this large will force big U.S. companies to buy from other U.S. companies such as Boeing instead. As you can imagine, this has stirred up plenty of controversy both north and south of the border.

Effectively, this quadruples the price of Bombardier’s planes to US customers like Delta Airlines, who currently have a contract to buy 75 of these planes.  Delta is clearly irate about the situation, arguing that Boeing does not even make a similar plane.  “We think it’s absurd” said Delta’s CEO Edward Bastian.  “We will not pay those tariffs, and that is very clear.”

Bombardier is also enraged as this tariff will seriously affect their ability to stay relevant in the U.S. market.  They have filed a complaint with the U.S. International Trade Commission in the hopes of reducing or eliminating this penalty.

It is true that Bombardier is the recipient of government subsidies that helped support the development of the C Series planes.  However, Boeing has received millions in subsidies from the US government in the form of federal grants, loans and loan guarantees.  I understand that the U.S. Department of Commerce is trying to protect U.S. manufacturing jobs and companies, but this decision is counter-productive as it actually hurts US companies.  Almost half the components of the C Series planes are actually bought from US suppliers.  Those suppliers stand to lose millions if the C Series cannot be sold in the huge US market.  Delta, a company that employs thousands of Americans, risks the ability to provide competitive service to their customers, because there is no other similar American-made plane.  Also, trade dispute decisions like this provoke retaliation.  Theresa May of the UK is upset, as she fears job losses in Northern Ireland, where Boeing has a wing assembly facility.  Justin Trudeau is so infuriated with the decision that he is threatening to cancel Canada’s plans to buy 18 Super Hornet military planes from Boeing.

This entire situation is illogical and reflects the protectionist views of the Trump Administration. No country really wins in a trade war, because decisions are made out of spite rather than based on sound economics.  Hopefully calmer heads will prevail when the final ruling on whether Boeing has suffered financial harm is released in February, 2018.

Word Count: 439