Warehouses in the US are struggling to automate due to the lack of proper internet infrastructure: Companies looking to boost their efficiency by deploying automated logistics solutions are running into hurdles as they find that their internet connectivity falls short of requirements, the Wall Street Journal reports. Pre-existing internet, cellular, and electrical infrastructure cannot keep up with the high-bandwidth requirements of automated container terminals, Artificial Intelligence (AI) shipment tracking, and autonomous trucking, offsetting many of the advantages such technologies bring to companies’ operations.

Solutions are available, but they can be expensive: Fixes and upgrades can run “in the mns of USDs,” an industry official told WSJ. Industries located in out-of-the-way rural sites or in densely populated city centers come with their own challenges.

Many executives are looking to roll out 5G to smooth their operations: 45% of transportation executives and 35% of manufacturing executives are looking to upgrade to 5G in the next two years, WSJ reported, citing a poll by Gartner. The high-speed cellular technology provides speedier and more robust connectivity than traditional Wi-Fi, but may create new obstacles due to compatibility issues with systems designed for wireless connectivity, the WSJ said.

Caught between China and the US, some regional states are going with two logistics corridors: Saudi Arabia is one of several countries in the region taking part in both the US-led India-MENA corridor and China’s Belt and Road Initiative (BRI), CNBC reports. Developing economies in the region are probing for investments that would fill infrastructure gaps, helping them bolster regional supply chains and boost trade and connectivity. These are objectives underpinning both IMEC and the BRI, CNBC explains.

The BRI can act as a cautionary tale for the US-led India-MENA corridor: Some USD 78.5 bn in loans issued by Chinese financiers to fund infrastructure projects in partner countries had to be renegotiated or written-off between 2020 and March this year, according to data from New York-based consultancy Rhodium Group. “Debt issues aside, large-scale infrastructure projects tend to be high risk. Moreover, returns tend to get realized in the longer term and may not even accrue to the original investor,” another expert said, according to CNBC.

The caveat could come from a US-centric approach to development: “The problem with ‘counter BRI’ is that it is a US narrative, while local narratives are nearly always about multiplication/addition, not subtraction,” former US diplomat Evan Feigenbaum said on Twitter. Feigenbaum was critical of statements by American academics and policymakers that fixated on the BRI as a pivot for China vs US geopolitical posturing.

Tags: