| |
|
| |
|
 |
Supply
Chain by the Numbers |
| |
|
| |
- Oct. 5, 2017 -
|
| |
|
| |
|
| |
|
| |
JB Hunt Says Truckload Rates Soon to Soar; US PMI Jumps in September, in More Good Economic News; Warren Buffet Makes Big Investment in Truckstops; US Oil Exports Set Record |
| |
|
| |
| |
| |
10%+ |
 |
| That is the growth in rates truckload carrier JB Hunt recently told its customers they should expect in coming months, as growing freight volumes combined with continued challenges with finding and keeping drivers are starting to really pinch capacity. "This is one of the highest periods of turbulence and volatility in supply we have ever experienced, and we don't think it will abate any time soon," Hunt CEO John Roberts, said in a letter to customers, as reported by the Journal of Commerce. "The core issue is centered on qualified driver availability," the letter added, noting that "Going into 2017, we did not expect the staffing challenges to reach the severity levels that are now present." Hunt noted that despite offering retention bonuses and a sign-on bonus of up to $10,000 per driver, the percent of open trucks in its fleet (trucks for which it does not have drivers) continues to rise. The letter said the looming requirement that all US drivers start using electronic logging devices (ELDs) is likely to exacerbate the shortage, as drivers can no longer cheat on hours of service compliance. |
|
|
| |
| |
|
|
|
That's how many years it has been since the US Purchasing Managers Index (PMI) has been as high as the 60.8% level seen in September, as reported earlier this week from the Institute for Supply Management. That was up 2 percentage points from August, and well above the 50 mark that separates manufacturing expansion from contraction. In even more good economic news, the September new orders index registered at a robust level of 64.6, an increase of 4.3 percentage points from August. As always in recent years there are mixed economic signals out there, but this PMI news combined with the recent revision of US Q2 real GDP growth to 3.1%, and the economy would seem for right now to be on very solid footing. Of the 18 manufacturing industries ISM tracks, 17 reported growth in September, with only the furniture sector left out of the party. |
| |
| |
|
| |
| |
40% |
|
That is the approximate stake that Warren Buffet's Berkshire Hathaway corporation will take in the Pilot/Flying J travel centers (i.e., truck stops), with plans eventually to take control of the business, it was announced this week. When explaining the deal, Buffet said the investment was driven by the powerful trend of the US needing "to move more goods to more people" – and that most of that freight movement will occur by truck. Pilot/Flying J currently has some $20 billion in annual revenue. While Buffett is obviously bullish, the move comes at a time when some trends would seem to put that investment at risk, notably the push for autonomous trucks that presumably don't need to stop at Fly J centers. Even with drivers, electric trucks may also be on the horizon, with Tesla due to unveil its design any day now, meaning the diesel fuel that make up most of that $20 billion could also be at risk. Natural gas and fuel cells also present risks. Buffet got into the logistics business a number of years ago with Berkshire's acquisition of Burlington Northern in 2009.
|
| |
| |
|
|
|
| |
|
 |
| |
|
|
| |
That's how many barrels of oil the US exported per day last week, an all-time high, blowing past the previous record set just the week by nearly 500,000 barrels a day. The export rate is more than twice as high as it was a month ago. Until these past two weeks, the highest weekly rate was 1.3 million barrels per day achieved in May. Last week's record put the US basically on par in terms of oil exports with Kuwait, which sells about 2 million barrels per day abroad. While the US is still an oil importer, net imports of crude fell to a record low last week, analysts at Citigroup said in a research note. Almost all of the foreign crude brought to the US last week was from Canada, the analysts said, noting that the data was "
a harbinger of a more sustainable trend to come." The primary reason for the rapid increase is that US crude is cheap. Last month West Texas Intermediate, the U.S. benchmark, fell to as much as $6.80 below Brent, the global benchmark, stoking global demand. The US fracking revolution continues on.
