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Supply Chain by the Numbers
   
 

- Feb. 26, 2015 -

   
  Supply Chain by the Numbers for Week of Feb. 26, 2015
   
 

Agreement at West Coast Won't Reduce Backlog Anytime Soon; Robots May be Killing Job Creation; Oil Inventories are Surging, Sure to Keep Prices Low; ATA Freight Index Hits All-Time High

   
 
 
 

31

That's the number of container ships that were at anchor at the ports of Los Angeles and Long Beach on Sunday, up from 27 a few days before despite the tentative agreement over the weekend between the dock workers union and port and terminal operators. Another dozen ships were said to be nearby or approaching the port complex. With containers also packed into terminals to the point of near total congestion, the labor deal hardly solves the extreme delays seen by importers and exporters over the past 3-4 months, as it will take quite a while to work off the backlog. "Just based on the mathematics, it will be about three months before we return to a sense of normalcy," said Gene Seroka, executive director of the port of LA last week. Some say it may take as long as six months to work through the current queue.

 
 


 
 
 

0.5%

That's the (low) level of average annual US private sector employment growth since 2014, according to an article this week in the Wall Street Journal. That is a big change from most of US history, where employment has moved basically in sync with gains in productivity. For example, annual productivity growth averaged 2.1% from 1953 to 1999 - the same rate of growth as employment over the same period. That experience led most to believe that technology advances and automation were not injurious to overall employment levels. But the WSJ article says experts are now retinking that model, as automation and robotics continue to advance capabilities. Productivity continued to grow 2.1% from 2000-2014, but this time the job growth lagged far behind that rate. "It's gotten easier to substitute machines for  many kinds of labor, " says MIT economist Erik Bynjolfsson.  No kidding.

 
 
 
 
 
135.7

That was the level of the American Trucking Associations' Freight Tonnage Index in January - an all-time record high. The 6.6% increase versus 2013 was the largest year-over-year gain in more than a year. ATA recently revised its seasonally adjusted index going back five years as part of the association's annual revision. For all of 2014, truck tonnage was up 3.7%, slightly better than the 3.4% originally reported. The baseline year is 2000, meaning January freight tonnage was more than 35% above average levels in that year, after falling to just barely above the 100 baseline level during the Great Recession. The modest but consistent volume gains combined with continued carrier discipline in terms of tractor counts - helped by the driver shortage - means the supply-demand balance remains in the carriers' favor, sending rates higher.

 
 
 
 

425.6 Million

That was how many barrels of oil the US had in storage last week, according to the Energy Information Administration (EIA). That is the highest level in at least 80 years, according to Bloomberg. It is also more than 20% higher than the five-year average. All that means a sharp jump back up in oil prices seems highly unlikely, as supply continues to well exceed demand. The buildup of supply has been "colossal" and is responsible for oil prices falling this week after a brief rally, said Thomas Finlon, director of Energy Analytics Group. Meanwhile, the U.S. is pumping oil at a faster pace than any time since 1972, despite the declining prices that were thought to be falling below the cost of US production. This continues to be a very interesting scenario.

 
 
 
 
 
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