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Supply
Chain by the Numbers |
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- April 27, 2017 -
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Amazon Team Looking at Autonomous Vehicles; US Truckload Rates Continue there Decline; US DC Market Remains Red Hot, as Vacancies Fall; Walmart Turns to Suppliers for CO2 Reductions |
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That was the first quarter vacancy rate for US industrial properties - mostly distribution center space - according to the Q1 "flash" report from real estate firm Jones Lang Lasalle (JLL). A more detailed Q1 analysis will come shortly. That vacancy rate is a 17-year low, JLL said, despite the fact that DC construction continued on at a rapid pace, with new groundbreakings up by 22% from Q4 2016. But despite all that construction, demand appears to be more than keeping pace. JLL says that 26.9% of speculative buildings were leased in the construction stage, up a bit from Q4 2016 and a very good number for builders. What's more, total net absorption - a measure of how much DC space was leased net of abandonments - continues to outpace new deliveries, JLL says. Net absorption declined a bit in Q1 from the previous quarter but showed a strong 11.9% year-over-year increase. All of this, of course, means lease rates continue to head higher. For example, asking rents in New Jersey have increased 34.4% during the past five years, JLL says.
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1 Gigaton |
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That is how much CO2 emissions Walmart is planning to take out of its extended supply chain, as part of a new program it naturally enough call Project Gigaton. A gigaton, by the way, is equal to one billion metric tons. If achieved, that would be equivalent to taking more than 211 million passenger vehicles off the road for a year, Walmart says. "We've made progress in our own operations, but this is taking us deeper into our supply chain," Laura Phillips, Walmart's senior vice president for sustainability said last week. "We need our top suppliers to take more action." Walmart has identified six areas where suppliers can focus their clean energy efforts: agriculture, waste, packaging, deforestation, and product use and design. Walmart expects its vendors to voluntarily join its Project Gigaton efforts, as several already have. How will vendors that don't jump in the boat be handled? That isn't yet clear, but SCDigest assumes there will be consequences. |
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Amazingly, that is how many consecutive months the Cass Linehaul Index, which tracks US over-the-road truckload rates before fuel surcharges and other accessorials, has fallen on a year-over-year basis, after the March numbers were released this week. That may be good news for shippers, as rates continue to head lower, but it also is a sign of an underlying weak economy, which isn't good for anyone. At an index level of 124.5, the Cass metric shows US truckload rates are currently 24.5% above the baseline year of 2005 - which in turn means a cumulative average growth rate of just 1.84% - probably close to the overall inflation rate during that period. Cass says its full year pricing forecast for 2017 is now -1% to 2%, saying the current strength being reported in spot rates by DAT Solutions is leading it to believe contract pricing rates should move back into positive territory, at least on a sequential basis soon. We'll see.
