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Supply
Chain by the Numbers |
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- Aug. 20, 2015 -
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Good News, Bad News Quarter at Walmart; USPS Looking for Salvation from eCommerce - and Finding It; Empire State Production Plummets; Maersk Cuts Global Container Volume Forecasts |
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-14.9
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That was the level of the New York Federal Reserve's Empire State Manufacturing Index for July - in which a value of zero means manufacturing activity in the region is flat. That is the lowest reading since the height of the Great Recession in 2009. The reading was at 3.9 in June. The index was as high as 25 in Q3, 2014, but has been headed sharply down from there, in what is worrisome news for the economy. The new orders index plunged to -15.7, and the shipments index fell to -13.8. It was better news on the national front, however, with the Fed saying US manufacturing output in July was up 0.8% versus June, and a modest 1.5% year over year. We'll note the national index recently changed its baseline year from 2007 to 2012, which is odd because 2007 output was higher, but regardless at an index level of 105.7 it means US manufacturing production is up 5.7% versus average 2012 levels. |
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2.4% |
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That's the revised forecast for growth in ocean container volumes for 2015 from Maersk Line, the industry's largest carrier, down from 3.5% it had projected at the beginning of the year. That during its Q2 earnings release, where Maersk Line was able to achieve a profit of $507 million in the quarter, down 7% from 2014 but above expectation. The results at Maersk were aided by lower bunker fuel costs from falling oil prices, as overall container shipping sector dynamics remain poor for carriers if good for shippers. Overall container shipping rates were 14% lower than a year earlier while capacity was up 11%, and with volume gains in 2-3% range, that is surely a recipe for overcapacity and thus falling rates, as the megaships keep coming. "It’s a matter of us and everybody else misreading the market and being too optimistic," said Nils Andersen, CEO of Maersk Line's parent company. The continued drop in global trade remains a worrisome signal and a factor behind overall slow global economic growth. |
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