Supply Chain by the Numbers

- Aug. 29, 2013

  Supply Chain by the Numbers for Week of Aug. 29, 2013

Amazon's German Warehouse Workers Want More; Trucking to Continue to Gain US Share; More US DCs Want Task Interleaving; Oil Prices Set to Spike




Starting wage in euros per hour in Germany for many warehouse workers, where union contracts set a wage standard for entire industries. That’s equal to about $13.00 in US currency. Wages then rise from there based on experience. The issue comes up as workers as DCs in Germany have been pressing for the higher €13 starting wage currently in place for retail workers - a move which naturally enough Amazon is resisting. Starting pay at Amazon's US facilities is about $11.00 per hour. Amazon counters that its German workers also receive bonuses as well as company shares after two years of employment. The company says that over the past five years, these additions have added an average of 8% to base pay annually.




Share of US tonnage that will be moved by truck in 2024, according to the annual forecast by the American Trucking Associations and its chief economist Bob Costello. That would be up from 68.5% in 2012. However, the trucking sector’s share of transportation spend will just barely increase, 81.0% in 2024, versus 80.7% in 2012, implying other modes will have slightly more pricing power. Interestingly, total freight tonnage across all modes was still off 12% in 2012 from 2006 levels, though up 8.2% from the recent low in 2009. Truck tonnage last year was up 10.3% from the low in 2009, but still off 12.7% from its high in 2006.


Number of respondents to a recent Motorola Solutions survey on "the future of warehousing" that said they plan on increasing their use of task interleaving in their distribution centers. Task interleaving involves combining DC tasks in something akin to a "continuous move," such as matching a putaway move with a full pallet replenishment. Frequently touted by Warehouse Management System vendors as a key area of potential savings, task interleaving can deliver real value by reducing "dead head" fork truck miles, but it is often harder to implement than the hype makes clear.



Price per barrel of oil that we might see if the US starts attacking Syria, according to some industry experts. Michael Wittner, chief oil analyst at French bank Societe Generale, estimated there was about a 20% chance of hitting that level, depending on if such an attack causes other conflicts to arise in the Middle East, such as in Iraq. Wittner believes the most likely case is that ol would spike to $120 to $125 per barrel. Brent crude has already moved from about $110 to $116 since word of the potential attack was announced.