Supply Chain by the Numbers for Week of Jan. 29, 2015

Supply Chain by the Numbers

- Jan. 29, 2015 -

Truck Drivers Cannot Find a Place to Park; UPS Takes Big Earnings Hit over 2014 Peak Season Spend; Strong Dollar Walloping US Company Earnings; Growing Supply Chain Scandal in UK Food Sector



$1.4 Billion
That's how much consumer products giant Procter & Gamble could see its profits decline in 2015 due to the surging value of the US dollar versus currencies such as the Euro and Japanese Yen. That according to the company's Q4 earnings report this week. For global US companies, a rising dollar means profits overseas in local currencies translate into fewer US dollars on the bottom line back here. The Euro, for example, is down to about $1.11, some 20% below the $1.39 or so seen last Spring, as the Euro zone takes a turn at "quantitative easing." The rising dollar "will not be good for US manufacturing or the US economy," said Caterpillar CEO Doug Oberhelman.

9.9%

That's how much the share price of parcel giant UPS fell on Jan. 22, after the company announced earnings which fell well short of expectations. The company blamed the miss on the huge costs it incurred to make sure it did not see a repeat of the Christmas delivery meltdown it experienced in 2013. "UPS invested heavily to ensure we would provide excellent service during peak when deliveries more than double,” said David Abney, UPS CEO. "Though customers enjoyed high quality service, it came at a cost to UPS." He added "Going forward, we will reduce operating costs and implement new pricing strategies during peak season." Meaning: rates are headed higher for peak season 2015.



300
That's the number of official parking spots in truckstops and rest areas on part of Interstate 40 through Arizona and New Mexico - to service for the more than 10,000 trucks that passed through that stretch daily. It turns out a lack of such parking spots nationwide is turning into a major issue for the logistics industry, as truckers unable to find a spot park on highway exits ramps and retail parking lots, causing safety issues for themselves and the public. In addition, the headache of finding spots for rest is contributing to the driver shortage, as some truckers decide it's just too much of a headache and stress and leave the profession.



120
That's the number days to which candy maker Mars has extended its payment terms to suppliers in the UK, as supplier-related issues in the grocery and food sector are emerging as something of a supply chain scandal in the country. That's up from a still lengthy 60 days previously ay Mars. Financially-struggling retailers are squeezing food manufacturers, which in turn are squeezing their suppliers. A consulting firm in the UK just announced that more than 1400 UK food manufacturers are in "severe financial distress" because of continued pressure on prices and the extended terms - and all this is now playing out in the press. Meanwhile, UK grocerTesco announced a new Tesco Supplier Network, an online platform that among other functions will let its vendor air gripes about what they see as abusive treatment.