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Supply Chain by the Numbers

- Feb. 11, 2016 -

  Supply Chain by the Numbers for Week of Feb.11, 2016

Amazon Continues Amazing Rollout of Distribution Space; Surge in Robot Orders in 2015, but Most in Automotive Sector; Rate Environment Pumels Botton Line at Maersk; 2015 a Good Year for Truckload Carriers


7.2 Million

That is how many new square feet of distribution space Amazon is expected to add in 2016 in the US alone. That according to Marc Wulfraat, president of MWPVL International, who has become the foremost expert on Amazon’s logistics moves, in a recent column in SCDigest. He estimates "that's a cool $1.2 billion of CapEx, never mind all the other top secret projects underway at the global level." Wulfraat also says that last year Amazon rolled out no less than 43 smaller urban facilities (Prime Now Hubs & Fresh Delivery Stations) in the United States with the goal to enable delivery to your doorstep in 60 minutes or less. It also appears to be going ahead with plans to build an air cargo service, with its hub in the Wilmington, OH airpark that once served as DHL’s (and before that Airborne’s) main operation. "All this to say that if you thought that Amazon was a game changer in 2015, hold onto your hat. The company has built an impenetrable moat that cannot be replicated by any other company," Wulfraat says. Wow.




That's how many industrial robots of all kind were ordered by North American companies/operations in 2015, according to new data from the Robotic Industries Association. That was up 14% from the total in 2014, RIA says, and means there are now about 260,000 such robots currently operating in the North America. The 14% growth in units led to a smaller 11% rise in spending on robots, to $1.8 billion, implying the robots are getting cheaper, which they surely are, accelerating the growth. But automotive really drove the increase in 2015, with robot orders increasing 19% year over year. Non-automotive robot orders grew a much more modest 5%. That's actually a smaller increase than we would have guessed, given all the robot mania in the press, but make no mistake, the robots are coming.


That was the rise in net income for 2015 across the group of seven large publicly traded truckload carriers we follow in SCDigest's quarterly review of results by different transportation modes, in what all told was a good year for the truckload segment. That was up from the 7.1% rise in profits the same group had seen in 2014.Werner led the charge, with net income up 25.4% year over year, followed by Swift (22.6%) and Marten (19.8%).But things slowed a bit during Q4, which almost all the carriers characterized as "soft" in terms of demand, with profits up a much lower 5.1% for the quarter. That was in large part due to slowing rate growth, with the Cass Linehaul Index, which measures per mile truckload rates before accessorials, up just 1.9%, 1.6% and 1.1% in October, November, and December. That compares with rate gains of more than 5% in each of the first three months of 2015.


$165 Million

That's how much the Maersk Lines unit of AP Moller-Maersk lost in Q4, amid a continuing brutal rate environment for container shipping and greatly slowing world trade volumes. Rates for container shipping peaked in 2012, but are down by almost 50% since then, now below the bottom seen in 2009 during the Great Recession and often now below operating costs. "This is the worst we’ve seen in the shipping industry since the 2008 financial crisis," said Jonathan Roach, container shipping analyst at London-based Braemar ACM Shipbroking. Maersk Group CEO Nils Andersen told investors freight rates declined "much faster than expected" during the final weeks of 2015. One issue - almost all the savings from plummeting bunker fuel costs are going to shippers, not the container lines, industry experts say. Maersk had planned for container demand growth in 2015 of 3% to 4%. Instead, it came in at 1%. Last week, Maersk forecast global demand would rise just 1% to 3% in 2016.

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