Supply Chain by the Numbers for Week of July 31, 2014

Supply Chain by the Numbers

- July 31, 2014 -

UPS Reaching Deep in its Pockets to Avoid 2014 Christmas Snafu; Australia Says Goodbye to Carbon Tax; US Economy Revives in Q2; RFID Market Set to Soar, Led by Retail



$175 Million
What UPS will spend to beef up its peak season capabilities for 2014, after a fiasco last year that caused tens of thousands of packages to not be delivered before Christmas, after a huge surge in last minute on-line orders. The parcel giant said that it will significantly increase operating expenses for "capacity and peak related projects," including for operations on Black Friday and upgrading its Orion software that optimizes delivery routes. That extra spend actually was a key contributor to UPS reducing its full year profit targets, causing its stock to drop almost 4% on the news. Incoming CEO David Abney says, however, that the company is ahead of schedule in its winter peak-season planning.

25.40

Amount of Australian dollars that about 350 of the country's largest companies had to pay in a tax for each metric ton of carbon they emitted - until the law was repealed last week. Prime Minister Tony Abbott had made the repeal of the unpopular law a key plank in his successful run at the prime minister’s office last year, a law which business and consumers saw as raising energy prices. Abbot had to get the bill through the Australian Senate, which his party did not control, but finally got the votes through an alliance with a minor party last week. The move is seen as a blow to anti-CO2 programs worldwide, though Australia is planning to pay businesses to reduce CO2 emissions as a way to meet its still in place carbon reduction targets.



4%
Rise in real Q2 US GDP growth on an annual basis in the second quarter, much larger than most analysts forecast and a nice rebound it appears from the negative 2.9% rate seen in Q1. As bad weather in much of the US was seen as a factor in the slow first quarter, many expected something of a bounce back in Q2, but few saw this level of growth coming. Still, we caution this is just the first of several estimates – the initial number for Q1 was actually a positive .1% growth. The second estimate will come at the end of August. Before this latest number, the International Monetary Fund had recently lowered its full year 2014 US growth estimate from 2.8% to just 1.7%.



27%
The share of the total global market for RFID hardware, software and services that will come from the retail sector by 2024, according to new estimates from the analysts at IDTechEx released last week. That would make retail the largest single RFID market by then, versus the just 5% share it enjoys currently, far smaller today than areas like transportation tickets, credit cards, and key fobs. The total RFID market will also show robust growth, led by retail, rising from $9.2 billion this year to over $18 billion in 2018, and then to some $30.2 billion in 2024. That would make retail's 27% share - driven by item-level tagging - worth about $8.1 billion by itself.