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Supply Chain by the Numbers
   
 

- May 24, 2018 -

   
  Supply Chain by the Numbers for Week of May 24, 2018
   
 

Rates and Tonnage Continues to Surge; Orlando Leads in Manufacturing Job Growth? The World Leader in Commercial Drone Flights; Change to Ocean Shipping Rules to Lead to Higher Oil Prices

   
 
 
 
 

8.2%

Another month, same story – that was the year-over year rise in the April Cass Linehaul Index, which measures US per mile truckload rates before fuel surcharge and other accessorials. In fact, the largest this is the largest year-over-year percentage increase in this index’s history (the base year is 2005). After signaling an industrial recession in the US and being negative for 13 months in a row (from March 2016 through March 2017), the Cass TL Linehaul Index has not only been positive now for thirteen months in a row, but the strength is continuing. Donald Broughton, analyst and commentator for the Cass indexes. Said "We believe that this is the strongest normalized percentage level of TL pricing achieved since deregulation. (Normalized meaning except for extreme periods of recovery from recession). Pouring more fuel on the fire, also this week the American Trucking Associations reported truck tonnage jumped 9.5% in April compared with the same period a year ago. During the first four months of 2018, ATA’s seasonally adjusted for-hire truck tonnage index rose 8%, topping the 3.8% rise seen in the same period in 2017. Oh, and diesel prices keep rising.


 
 
 
 
 

23.6%

Surprisingly, that is the percent of manufacturing job growth in the greater Orlando, FL area since 2012, placing it as the top area for such manufacturing job gains among the 71 large cities, according to new analysis of 373 total MSA’s from Joel Kotkin on Forbes.com. And you thought Orlando was all just Mickey Mouse and Universal Studies. Orlando had 7.9% manufacturing job growth just in 2017, as companies such as Lockheed Martin, Mitsubishi Hitachi Power Systems Americas and Siemens Energy have brought advanced manufacturing jobs to the Orlando area. There was good news across the US – for example, Grand Rapids-Wyoming, MI, which placed third on the strength of a 20.5% jump in industrial employment since 2012 to 115,700 jobs, and where a fifth of all non-farm jobs in the metro area are in factories. The Grand Rapids area boasts a vast array of 2,500 manufacturing companies in diverse industries, including metals, plastics, biopharmaceuticals, medical devices, production technology, automotive and food processing. Many other Rust Belt cities are also shining - No. 6 Warren-Troy-Farmington Hills, MI, - also known as "automation alley" - continues to perform well, with 18.5% industrial job growth since 2012. Not performing well among large cities were Los Angeles, Chicago and Houston areas.

 
 
 
 

5000

That is the number of autonomous drone flights a company called Zipline has made to deliver blood to areas hard to reach in Africa. Blood is "expensive, lifesaving but doesn't last very long," Zipline co-founder and CEO Keller Rinaudo told CNBC last week. "So traditional supply chains do a very poor job of distributing it. Using drones, we can deliver blood 10 times as quickly as cars, on demand." Zipline has completed 300,000 km of autonomous flight across Rwanda — a nation known for its mountainous geography, difficult weather and poor infrastructure — delivering 7,000 units of blood since 2016. A doctor in Rwanda with a patient in need and too little blood on hand can send a text to Zipline with the blood type and number of units needed. The blood is loaded into a box with a parachute and onto an autonomous plane — which drops the package at the designated hospital in 30 minutes or less. "It's very easy to do a demonstration flight over a few kilometers in perfect weather once, but very hard to run a fully automated system operating at national scale, capable of doing hundreds of flights a day in any weather, that people can rely on with their lives," Rinaudo added. Wow.

 
 
 
 
 

$90

That will be the price per barrel for Brent Crude in 2020, according to a new analysis published by Morgan Stanley this week. That is some $20 above current prices, and a big change from the low prices the US and the world have seen in recent years. The odd important driver of the increase: new emissions rules for ocean cargo ships recently approved by the International Maritime Organization (IMO) and set to go into effect Jan. 1, 2020. The new rules, aimed to reduce sulfur, among other emissions, are widely expected to create an oversupply of high-sulfur fuel oil while sparking demand for IMO-compliant products - thus ratcheting up the pressure on the refining industry to produce substantially more of the latter fuels. That is very important because many Middle Eastern producers are likely lose out from the change because their crude tends to be very high sulfur. "We expect the crude oil market to remain under-supplied and inventories to continue to draw," Morgan Stanley said, adding: "This will likely underpin prices."

 

 
 
 
 
 
 
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