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Supply Chain by the Numbers

- June 6, 2024


Supply Chain by the Numbers for June 6, 2024


Amazon gets Drone OK, Freght Payments Fell in Q1; US Manufacturing Contracted again in May; Second Estimate of Q1 GDP Lowers Growth

tG Q1



That’s the share of its drone fleet Amazon can now fly without full line of site, as it has been recently been cleared for such flights by the FAA. That according to a blog post on Amazon’s web site late last week. That will obviously dramatically increase the range of Amazon’s fledgling drone fleer and give more customers access to the service. Amazon says will now expand the area it services with unmanned aerial vehicles in College Station, Texas, and will start integrating such shipments into its same-day delivery network later this year. Amazon is seeking to deliver 500 million packages a year by drone by the end of the decade. It delivered more than 4 billion units on the same or next day to Prime members in the US in 2023.



That was the decline in the US Bank Freight Payment Index for Q1 versus Q4 of 2023, as reported by the company this week, as freight remains stuck in a modest recession. The drop in Q4 had been 10.9%. The Q1 decline versus the same period in 2023 was an even larger 21.6%. “While this was a tough season for motor carriers, shipper spend fell substantially during the first quarter,” the report said. “In the end, shipping capacity was still high compared with the amount of freight available, leading to lower spend” from falling rates. However, lower diesel costs also played a factor in lower Q1 freight spend by shippers, the report says, as fuel surcharges decline.



That was the level of the US Purchasing Managers Index (PMI) for May, as released Monday by the Institute for Supply Management (ISM). That score is again below the key 50 mark that separates US manufacturing expansion from contraction. What’s more, the US PMI had previously been in contraction territory for 16 straight months until it poked its head into expansion in March with a score of 50.3, but that has now been followed by two more months of contraction. Meanwhile, the New Order Index, registered at 45.4, 3.7 percentage points lower than the 49.1 recorded in April, in a bad sign for future US manufacturing activity.




That was the revised change in Q1 real GDP growth, as announced by the Commerce Dept. this week. That was down from the initial estimate of 1.6% growth sent out a few weeks ago, and which is closer to the original consensus projections from US economists. The new estimate is also way down from the previous two quarters, with Q4 2023 GDP up 3.4% and Q3 4.9%. The modest good news; the tepid Q1 growth number likely will make it easier for the Federal Reserve to lower interest rates in the next few months.
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