Supply Chain by the Numbers

- Nov. 14, 2019 -

  Supply Chain by the Numbers for Nov. 14, 2019

Sales again Soar for Chinese Single's Day; Trucking Group Sues over California Contactor Law; Adidas Now Closing Western Factories; Container Volumes will Fall in 2019


$38 Billion

That's is the record in gross merchandise volume (GMV), a rough measure of total sales for Chinese on-line retail giant Alibaba alone for so-called Single's Day on Monday, a rather odd on-line shopping day that started out years back as a protest against Valentine's Day. That represents a 26% increase year-over-year. Alibaba rival saw Single's Day GMV of over $15 billion. By comparison Amazon sold about $7 billion of goods during Amazon Prime Day, a 48-hour, global event in July. And Cyber Monday sales across all US etailers were

$7.9 billion in 2018. Alibaba workers have reportedly been working around the clock to keep up with intense ecommerce and shipping demands. The retailer reportedly used high-speed trains to keep up with deliveries, and workers in fulfillment facilities worked overnight to keep up with volumes.



That's how many California truck drivers could be effected by a recent new law in California that extremely limits what workers can be considered contract employees – from Uber drivers to IT consultants – but will impact the freight transport sector significantly. The 70,000 number comes from a federal lawsuit the California Trucking Association filed this week challenging the law, arguing the new rules will deny many truckers the ability to work as independent drivers in California, a status that allows them to profit from their own vehicles while setting their own schedules. That as many carriers, especially in the drayage sector moving containers from ports to inland warehouses, are scrambling in how to respond to the law, and which becomes effective Jan. 1. Options include leaving the state, hiring independents as employees (which they may not want), or setting up brokerages to move freight to independents.



That was the limited number of shoe pairs expected to be made at a supposedly new age Adidas "speedfactory” built near Atlanta, while another 500,000 pairs were planned for in a similar factor in Adidas' home market of Germany. Both were announced with great fervor a few years ago, a move to show athletic shoes could be made in developed markets instead of Asia by a combination of high automation and being more responsive to market demand. None of that matters now, as Adidas broke the news this week both factories would be shuttered and the volumes - and the new technology - moved to factories in China and Vietnam. This is causing many to question whether apparel-type products can be made in the US. Of course, the combined 550,000 pair between the two factories is a small fraction of the 300 million pairs Adidas makes globally. Adidas said the move would result in the "better utilization of existing production capacity and more flexibility in product design." Adidas rivals Nike and Under Armour have also invested in or begun testing automated production technology for footwear in recent years to diversify their manufacturing strategies.



That is the expected fall in container volumes from Asia to Europe and North America for the full year 2019. That from a new forecast this week from the maritime analysts at Alphaliner. If accurate, that would the first year-over-year decline in such container volumes since the deep recession year of 2009. In an already slow year, Alphaliner expects Q4 to be especially weak in terms of container volumes. For example, the US West Coast ports of Los Angeles, Long Beach and Oakland recorded a combined drop of -12.0% in total container throughput in October. With the lousy October figures coming in, the port of LA announced a major new campaign that hopes to end the US-China trade war. That includes a new study commissioned by the port that claims the tariffs used in the trade war threaten the jobs of nearly 1.5 million Americans.

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