Even Peru Has More Efficient Ports Than America

Even Peru has more efficient ports than America.

Yes, that Peru…

I’m married to a Peruvian. I live most of the year in Lima, the country’s capital.

And I can tell you in no uncertain terms, it’s no one’s idea of model efficiency.

This is a country that has bus stops on its interstate highway.

The bus stops aren’t on the access road, mind you. They’re on the highway itself. You’ll be driving at 80 miles an hour and have to suddenly slam on the brakes because a bus is unloading and picking up passengers in front of you.

Simple tasks such as getting gas or going to the grocery store are so mind-numbingly slow and complicated that I pay someone else to do these things for me, lest I lose my mind and end up in a padded cell.

Still, even Peru has more efficient ports than the world’s largest and wealthiest economy – the United States of America.

In the World Bank’s latest rankings of container ports, the Port of Callao, just outside of Lima, ranked 35th. The most efficient U.S. port – Wilmington, North Carolina – ranks 44th.

Djibouti – a dirt-poor country in East Africa – has a port ranked 26th in the world in terms of efficiency.

Think about that… The average worker in Djibouti lives on a salary of $3,000 a year. And it runs a more efficient port than any U.S. city.

This isn’t because American workers are uniquely slow.

As we’ve been exploring in these pages, the problem is a refusal to automate due to obstinate unions. It’s also a result of shockingly stupid regulation.

Legislating Against Progress

Check out the following passage from the Infrastructure Investment and Jobs Act (IIJA). It’s the bipartisan spending bill President Joe Biden signed into law in 2021…

This program will not fund the purchase or installation of fully automated cargo handling equipment, or the installation of terminal infrastructure that is designed for fully automated cargo handling equipment, if the Secretary determines that such equipment would result in a net loss of good jobs or reduction in the quality of jobs within the port or port terminal.

In case you didn’t know what “fully automated cargo handling equipment” is, the IIJA clarifies…

In general, fully automated cargo handling systems transfer materials without the need, or a significantly reduced need, for human assistance.

No sh*t, Sherlock. Automated systems reduce the need for human assistance. That’s the point.

Human workers get sick. They show up to work hungover. They bring relationship drama into the workplace. They take long coffee breaks. (I might be guilty of that one.)

They also go on strike, as unionized U.S. longshoremen reminded us recently.

But more than any of that, they’re slow.

As reporter Eric Boehm notes in libertarian magazine Reason…

Automated cranes in use at the port of Rotterdam in the Netherlands since the 1990s are 80% faster than the human-operated cranes used at the port in Oakland, California.

Of course, for the folks who penned the IIJA, automation is bad because it eliminates jobs.

So, let’s just keep operating those cranes by hand from now until the end of days. And let’s keep paying higher prices and accepting longer delivery times to save jobs that no longer make economic sense.

Meanwhile, the rest of the world moves on.

Productivity Boom

As I’ve written to you about before, burrito chain Chipotle Mexican Grill (CMG) is rolling out robots that can peel, slice, and core an avocado in about half the time it takes an experienced chef.

This frees up employees to focus on other tasks such as customer service or other food-prep responsibilities.

And the robot doesn’t just save time. By processing them more efficiently, the company wastes less avocado. Chipotle uses more than 100 million pounds of avocados every year. So, this could translate into millions of dollars in savings in food costs​.

Or take the “robotaxi” revolution colleague and InvestorPlace tech investing expert Luke Lango has been covering.

Alphabet’s (GOOGL) Waymo robotaxi service has been operating fully autonomous rides since 2020.

You can hail a driverless Waymo ride in Los Angeles, San Francisco, and Phoenix. And early next year, Waymo plans to roll out its service in Austin and Atlanta.

These rides are not only cheaper, but they’re also safer…

According to a study in peer-reviewed science journal Heliyon, with an AI pilot at the wheel instead of a human driver, property-damage claims plunged by 76%… and bodily injury claims plummeted by 100%.

And as Elon Musk revealed at his “We, Robot” event last Thursday, Tesla (TSLA) is going to ramp up the mass production of its own robotaxi – the Cybercab.

In the meantime, artificial intelligence is driving massive efficiencies in corporate America.

Take, for example, what Amazon (AMZN) is doing with AI and customer support…

Amazon has integrated its AI chatbot into its customer service operations in several ways.

For instance, if a customer wants to return an item, Amazon’s AI can process the request, generate a return label, and send the customer instructions – all in a matter of seconds. This frees up human agents to deal with more complex problems that require empathy or nuanced decision-making.

Customers can now even ask their Alexa smart home devices questions like “Where’s my package?” or “Why was my order delayed?” And Alexa will handle the query there and then without the need to contact Amazon’s customer service team.

Or take Walmart’s (WMT) use of AI to drive efficiencies in inventory management and supply-chain optimization.

The company uses AI-drive robots to monitor stock levels in its stores. They autonomously roam store aisles, scanning shelves to check for empty spaces or misplaced items.

The AI recognizes which products are running low or out of stock and generates real-time alerts, triggering restocking actions. This reduces the manual labor required for inventory checks and increases accuracy in tracking product availability.

Walmart’s AI systems also manage the complex logistics of its supply chain – including route optimization or delivery trucks and warehouse management.

AI analyzes real-time traffic data, fuel costs, and delivery schedules to suggest the most efficient routes for its fleet of trucks. This reduces delivery times, cuts fuel consumption, and minimizes costs.

There is a lot of concern about what this means for jobs. But as I’ve been showing you, AI and automation are going to unleash a productivity boom that will dwarf the Industrial Revolution.

And the companies that best master AI and automation will reap the rewards.

How to Play It

That’s why we’ve made Exponential Progress one of the core investing themes of our Freeport Investor advisory.

It used to take a decade for a company to grow to $1 billion in market value. Now, it can happen in months. Amazon tripled in size in just under three years. Tesla exploded by a factor of 20 in just a little over two years.

That kind of growth from an already large company was totally unheard of 40 years ago. These days, it’s common.

And you don’t have to be a paid-up Freeport Investor subscriber to profit.

You can play this trend by buying a basket of stocks in companies leading the charge in AI and automation.

One solid option is the Global X Robotics & Artificial Intelligence ETF (BOTZ). It carries an annual expense ratio of 0.68%, which isn’t bad. Top holdings include AI chipmaker Nvidia (NVDA), robot-assisted surgery pioneer Intuitive Surgical (ISRG), and Swedish-Swiss industrial robot maker ABB (ABBN).

If you don’t already have exposure to this trend, consider picking up some shares in BOTZ today.

To life, liberty and the pursuit of wealth,

Charles Sizemore

Chief Investment Analyst, The Freeport Society

P.S. My colleague and InvestorPlace legendary Wall Street investor Louis Navellier predicts AI stocks will see a massive shift – starting exactly a week from now, on October 21.

It’s all to do with what Louis calls the “next generation” of AI stocks.

And when Louis makes a big call like that, it’s worth paying attention.

Back in June, he shared a new way of playing the AI boom that has already shown us massive gains. For example, you could have more than doubled your money on an AI energy stock he recommended.

And he’s given his subscribers the chance to make to 37,000% gains on his Nvidia recommendation.

But Louis considers Nvidia an “old story” at this point. Instead, he has his eyes on the opportunity ahead in next-gen AI.

To find out all about it, watch the video presentation he put together right here.