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Supply Chain by the Numbers
   
 

- Dec. 13, 2018 -

   
  Supply Chain by the Numbers for Week of Dec. 13, 2018
   
 

Lots More Spending Needed on Infrastructure, NAS Report Finds; US Factory Job Openings Surge; Most Manufacturers Looking for New Supply Sources as a Result of Tariffs; BASF Takes a Logistics Hit from Low River Water

   
 
 
 
 

$21 Billion

That's about how much the Federal and state governments spend on the US interstate highway system annually, according to a new report on US infrastructure needs from the National Academy of Sciences. Not nearly enough, the report says. At the low end of its scenarios for growth in vehicle miles travelled, the report says about $46 billion in annual spending is required, more than double current levels. At the top end of the scenarios, a whopping $69 billion will be needed, with a great increase in spending to add lane miles to deal with the growth. But all that just to keep congestion levels about the same as today. What to do? As with many others, NAS recommends a substantial (though not detailed) hike in gas and diesel taxes. It also says new funding is required in the form of new tolls or a vehicle miles travelled tax, especially as the share of electric vehicles continue to grow.



 
 
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4%

That was the rate in job openings at US durable goods manufacturers in October, in new data from the Labor Department. That is a record dating back to 2000, the Department said. October. That October number was up from 3.7% in September and 3.1% a year earlier. Total openings were 332,000, compared with about 8 million jobs in the sector. Job openings have surged at US manufacturers of durable goods from machinery to cars in recent months, suggesting factories have plenty of demand despite recent tariff obstacles. A separate report from the Association for Manufacturing Technology released last week noted that machine-tool orders from August to October were $1.6 billion - the most in 20 years.

 
 
 
 
 

65%

That's the percent of manufacturing executives that said their companies are evaluating new sources of supply and other changes as a result of tariffs the Trump administration has either imposed or threatened on a wide range of imports. That according to the new semi-annual economic survey from the Institute for Supply Management. However, compared with the ISM's last economic survey conducted in May, interestingly fewer companies now expect tariffs to raise the price of their goods to customers, or to cause delays and disruptions in their supply chains. But compared with December 2017 survey, fewer purchasing and supply executives believe the next year will be better than the last. Just under half of survey respondents believe 2019 will be better than 2018, with the rest saying it will be the same or worse. Purchasing and supply executives in the manufacturing sector also said they expect the prices for components and materials their businesses buy will rise 3.3% in 2019, after a sharp gain of 5.1% this year.

 
 
 
 
 

$227 Million

That incredibly is the hit to Q4 earnings German chemicals giant BASF said will be caused bylow water levels (the result of a drought) in the Rhine River that impact logistics. What? Turns out this is just the latest example for how the Rhine's low water levels have taken a toll on companies that rely heavily on one of Europe's most important waterways. The low water levels forced BASF to change to higher cost transport modes, and also grapple with resulting delivery issues for raw materials, leading to shortfalls in production that are now eating into profits. BASF is not alone. Polymer-manufacturer Covestro also cut its 2018 outlook due to the low water levels, while steel conglomerate Thyssenkrupp in October declared force majeure as it struggled to deliver enough raw materials to its Duisburg plant, a situation the company warned would impact earnings into the first half of next year. BASF said it is now considering the purchase of a fleet of flat-bottom ships.

 
 
 
 
 
 
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