Supply Chain by the Numbers
   
 

- June 22, 2017 -

   
  Supply Chain by the Numbers for Week of June 22, 2017
   
 

Drayage Drivers at Port of Los Angeles being Abused? Chinese Manufacturers Can't Buy Robots Fast Enough; Which US Regions Adding Most Manufacturing Jobs; Drones and Weather Forecasts

   
 
 
 

$2.5 Billion

That was the approximate cost that drayage trucking companies servicing the ports of Los Angeles and Long Beach - which haul containers to and from ports to nearby warehouse and transload facilities - would need to spend in coming years after the port authorities there mandated in 2008 the use of trucks with much fewer emissions, to address deteriorating air quality. How would these some 800 drayage companies - most of them small shops - come up with that kind of money? It seems the answer was to convince drivers to borrow money to buy their own trucks and become "owner-operators" working as contractors for those same drayage firms - often with financially disastrous results, according to a disturbing article on this subject earlier this week in USA Today. "Instead of digging into their own pockets to undo the environmental mess they helped create, the companies found a way to push the cost onto individual drivers, who are paid by the number and kinds of containers they move, not by the hour," USA Today reported. The article contains far more information than we can summarize here, but many drivers work long hours - often brutally and illegally long hours - only to find they got little or no take home pay after making truck payments and being assessed very fees for things like sleeping in the company's parking lot. And the contracts do not recognize equity - if a driver falls behind, the carrier just takes the truck. More on this soon from SCDigest.
 
 


 
 
 

1

That's how many workers are now needed per manufacturing line at Chinese appliance parts maker Xinlu after it implemented robots at its factory - down from 10 previously. "Labor costs have doubled over the last three years, but robots come with a guaranteed life of 10 years," a smiling Xinlu chairman said. according to an article this week in the Nikkei Asian Review. In fact, robot manufacturers, especially from Japan, are struggling to keep up with surging demand from Chinese manufacturers, the article said. The robots are not only becoming more attractive due to rising labor costs in China, but also due the government encouraging robot invesement with subsidies. That government encouragement is in turn due both to the interest in keeping Chinese manufacturers competitive globally but also from a shrinking workforce population in the country - and as in the US a growing lack of interest in manufacturing jobs among younger workers. Industrial robot sales in China totaled 67,000 units in 2015, some 30% of the global market, according to the International Federation of Robotics. The organization forecasts 20% annual growth in the Chinese market between 2016 and 2019, lifting the country's share to 40% - far above its share of global manufacturing.

 
 
 
 
 

30.2%

That has been the increase in manufacturing jobs since 2011 in the Louisville-Jefferson County area, which straddles the border between Kentucky and Indiana, where there are now a total of 83,300 factory workers. That put the region as the top area in the US for manufacturing job growth, according to an analysis of the top 70 metropolitan statistical areas (MSAs) by writer Joel Kotkin and a colleague on the Forbes.com web site this week. In fact, regions in the Rust Belt dominate the list, such as the second ranked MSA, the Grand Rapids-Wyoming, MI region, which sported a 22% gain in industrial jobs over the same span. Other Midwestern cities on the manufacturing jobs growth curve: no. 4 Kansas City, MO; no. 5 Warren-Troy-Farmington Hills, MI; and no. 10 Detroit-Dearborn-Livonia. "Taken together the latter two Michigan metro areas are now home to over 245,000 manufacturing jobs, up dramatically from the 205,500 manufacturing jobs they accounted for in 2011 and just below the 252,300 jobs they tallied a decade ago, before the Great Recession hit," Kotkin says. Meanwhile, manufacturing jobs are plummeting in New York City, Chicago and Los Angeles. See What US Metro Regions are Driving the Most Job Growth from Manufacturing?

 
 
 
 

$2500

That's how much it costs currently for a weather instrument that can records six variables such as wind speed, wind direction, and humidity. Why should we care about that? Because it turns out we may need millions of the things to forecast weather in as small an area are a city block to support safe drone delivery operations. We hadn't thought about that one. "The problem [very local forecasting] is solvable in almost all cases. It just comes down to cost,” said Jon Tarleton, whose company Vaisala in Finland makes the weather balloons that the National Weather Service sets loose each day to compile the national forecast, in an interview this week with Bloomberg. To achieve such very granular local forecasting will rely on multi-layered systems of ground-based weather instruments, sensors on the drones themselves, and data from national weather services, all feeding computer models, experts says. "The weather issue is a very significant one," says Sean Cassidy, director of safety and regulatory affairs for Amazon’s drone unit. "We don’t have anything at the level of granularity that you would need to operate." To understand how complex this problem really is, consider that sun-baked city sidewalks opposite shaded ones just across a street can produce uneven heat waves, causing unpredictable downdrafts and updrafts.  Who knew?

 
 
 
 
 
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