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Supply
Chain by the Numbers |
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- August 1, 2024
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Amazon Targets Rural America for Deliveries; US PMI Down again in July; Major 3PL Goes Public; Panama Canal Back to Normal |
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| That is Amazon’s stated goal of the share of its shipments that Amazon wants to deliver itself. That would be up from about two-thirds today. The number came up as a result of an article this week in the Wall Street Journal on Amazon’s strategy of extending more deliveries of the US, where currently the United States Parcel Service (USPS) dominates parcel shipments. It turns out, the Journal says, that Amazon has been quietly investing heavily to execute this strategy, including hyper-efficient warehouses, contracted drivers and mom-and-pop shops. Is the USPS in danger of being “Amazoned?” It says no, but it seems clear Amazon intends to take market share from the Parcel Service. |
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| That was the level of the US Purchasing Managers Index (PMI) for June, as released Thursday by the Institute for Supply Management (ISM). That score is again below the key 50 mark that separates US manufacturing expansion from contraction, and was down from the June score. 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 four more months of contraction. Meanwhile, the New Order Index, registered at 47.4, 1.9 percentage points lower than the 49.3 recorded in April, in a bad sign for future US manufacturing activity. |
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84.4 |
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| That is about the level in feet this week of Gatun Lake in Panama, after heavy rains this month, bringing the body of water to nearly normal levels, on the way to an estimated 86.1 feet by October. Why does this matter? Because Gatun Lake feeds the locks of the Panama Canal. Starting last year, a severe drought caused the lake to fall to about 80 feet deep for months, a situation exacerbated by the fact that it also provides drinking water for local populations. The low water levels caused the Canal Authority to significantly reduce daily Canal crossing, with giant fees to secure a spot in line. Now, it appears the crossings are back to normal levels. |
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That’s how much cold storage 3PL giant Lineage Logistics was valued at after an IPO last week that raised $4.4 billion. Starting with a single acquisition of a facility in 2008, ex-Morgan Stanley managers Adam Forste and Kevin Marchetti grew rapidly through acquisitions to become the largest player in the temperature-controlled space in the US, with almost one-third of the sector’s cubic storage capacity. With 480 buildings globally, Lineage now owns 2.1 billion cubic feet of US space, much higher than number 2 Americold at 1.3 billion cubic feet. Lineage has benefitted from recent changes in consumer demand, with frozen-foods sales up an impressive 7.9% in 2023
