Season 5, Post 37: Get on the train!
For a chance to spend four hours learning about the future of work, energy, mobility, AI and global supply chains, your author tuned in to Groundbreakers last week. Now in its third year (we also attended in 2022), this is a superb event hosted by Prologis – the largest owner of big box warehouses globally – that allows its stakeholders to understand key developments across the ecosystem. Our main takeaways follow:
Almost every conversation came back to the topic du jour of AI. Hamid Moghadam, Prologis’ Chief Executive perhaps made the case most forcefully, noting that “if you’re not on the [AI] train, then you will get run over by it.” For many businesses within the Prologis ecosystem, retailers particularly, AI can and should be leveraged as a forecasting tool, to allow for better business planning. Every retailer, we were told by one panellist, will “have to become a data company.” In such a future world view – and one with which we broadly concur – mass anonymity will be replaced by mass personalisation. Another speaker described AI as being “a senior executive in a box.” Give it data, and the device will give you answers.
There was much passion also on show at Groundbreakers for the concept of ‘ACES’, a new acronym for your author. It describes how the future of transportation will be autonomous, connected, electric and shared. AI, of course, will be an enabler in this journey. Laudable words, in our view. The problem, however, is the time it will take to implement. Even in California (where Prologis and many of its stakeholders are based), consensus opinion seemed to be that just to electrify last mile logistics may take 3-5 years. Charging stations are, at least, currently being installed in Long Beach Port in LA. The journey for middle mile logistics will likely take even longer, especially given ongoing concerns about range anxiety. Some made a fervent case for drones.
The metaphorical elephant in the room which unites both the topics of AI and ACES is the grid. We highlighted last year just how significant chronic underinvestment in electricity infrastructure has been. With demand only heading one way, the problem will intensify. Better energy storage, we were told, is “the name of the game” and almost every business is seeking to embrace and integrate all forms of alternative power, as much as anything to embed reliability. Fear of outages or power failures seemed significant, or, as one speaker put it, “the cost of inaction is just not affordable.”
5 October 2023
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Prologis. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
Click here to view all Blog posts.
Alex Gunz, Fund Manager
The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital LLP believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital LLP, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital LLP is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital LLP disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document.
The document is protected by copyright. The use of any trademarks and logos displayed in the document without Heptagon Capital LLP’s prior written consent is strictly prohibited. Information in the document must not be published or redistributed without Heptagon Capital LLP’s prior written consent.
Heptagon Capital LLP, 63 Brook Street, Mayfair, London W1K 4HS
tel +44 20 7070 1800
email [email protected]
Partnership No: OC307355 Registered in England and Wales Authorised & Regulated by the Financial Conduct Authority
Heptagon Capital Limited is licenced to conduct investment services by the Malta Financial Services Authority.
GET THE UPDATES
Sign up to our monthly email newsletter for the latest fund updates, webcasts and insights.