Supply Chain by the Numbers

- March 23, 2017 -

  Supply Chain by the Numbers for Week of March 23, 2017

US Truckload Rates Continue to Slump; So Much for the End of Fossil Fuels Any Time Soon; Major Advance in 3D Printing Capabilities? Back to the Future for Powering Cargo Ships



Amazingly, that is the number of consecutive months of year over year per mile truckload rate declines through February, according to the monthly Cass Linehaul Index data released earlier this week. That unfortunately may be a sign of continued economic weakness, as freight volumes just don't appear to be there to tighten capacity and send rates higher. That's obviously good news for shippers, though most would also benefit from stronger economic growth. That said, the analysts at Avondale Partners, who help Cass with the monthly report, have increased their pricing forecast to a -1% to 2% year-over-year change this year. Avalon added that "the current strength being reported in spot rates is leading us to believe contract pricing rates should move back into positive territory at least on a sequential basis” before long. Still, it remains a very soft rate forecast compared to the years before 2016. Meanwhile, the ATA's freight tonnage index over the first two months of 2017 has basically been flat, the trucking organization said this week. For all of 2016, tonnage was up 2.5%, the ATA says.



1.2 Million

That is by how much global demand per oil in terms of barrels per day is expected to rise on average per year through 2020, according to a new report from the International Energy Agency (IEA). So much for the end of fossil fuels. This is likely to be a real problem, the IEA says, because the deep slump in oil prices in 2015-16 led to the cancellation or delay of many oil development project across the globe - a loss of capacity that will be felt by 2020. In a new five-year forecast, the IEA is predicting stable prices for the next three years but considerable surges after that, as a supply crunch begins to take effect. In fact, the report predicts spare production capacity will fall to a 14-year low in 2022, even though supply is growing in places like the US, Canada and Brazil. However, growth in consumption will be accounted for almost exclusively by developing countries, and Asia will account for about seven out of every 10 extra barrels consumed globally, the IEA says. The organization also said that new technologies such as electric vehicles, which have been hailed as a way of reducing oil consumption, will play only a very limited role in offsetting growing global demand.



That is the amount of oil-based bunker fuel that Maersk Tankers thinks it may be able to save from going back to the future and using … wind power! The sister business unit of container shipping giant Maersk Line said it will soon test these new age, nearly 100 feet tall vertical "sails" - which are turbine-like towers that sit on the deck of a ship - on one ship, and may add the technology to as many as four dozen other bulk shipping vessels later. Maersk Tankers and Maersk Lines between them spend about $2.1 billion on bunker fuel, so even 10% savings would be quite a boon to the bottom line. Industry executives said previous efforts to harness the wind didn't catch on with shipping operators because either the cost of such technologies was too high or tests didn't yield the expected fuel savings. However, the lightweight and relatively cheap rotating sails show more promise, experts say.



That is how many times faster the new generation 3D printer from a company called 3D Systems is versus most current 3D technologies, according to the company's announcement of its new Figure 4 production platform. If true, it means 3D printing could likely move into a lot more markets that require larger scale manufacturing operations than 3D printing can really support currently. This kind of progress should not be surprising. Many tech observers say that 3D printing – a digital technology – is advancing at the rapid speeds similar to the famous Moore's Law for computer processors. Interestingly, one of the first markets that 3D Systems is targeting with its new system is dentistry, where 3D printing may be able to produce much greater "accuracy of the fit" for dental devices such as crowns and dentures. "Our system can print 20-30 crowns in fewer than 15 minutes," 3D Systems said in statement, "which is the same time it takes most milling solutions to produce a single crown." It's really coming.