Supply Chain by the Numbers

- Nov. 15, 2017 -

  Supply Chain by the Numbers for Week of Nov. 15, 2017

Single's Day Continues Mammoth Growth for Alibaba, Others; Time for a Hike in Gas and Deisel Taxes, ATRI Says; UAW Loses Another Big Union Vote; US Apparel Retailers Changing Inventory Strategies


$25 Billion+

That was the level of sales through Chinese ecommerce giant Alibaba's web platform during the odd Single's Day on-line shopping event earlier this week. Single's Day, started as a sort of anti-Valentine's day by Chinese college students, has now grown into by far the largest digital shopping event worldwide, rapidly expanding beyond China to other Asian countries. Alibaba wasn't the only company to prosper. Rival saw sales of over $19 on Single's Day and the 11 days leading up to it. By comparison, Cyber Monday in the United States saw just $3.45 billion in on-line sales last year. Alibaba's sales were up 39% versus 2016, with about 90 percent of transactions conducted via mobile. At its peak, the company's processors handled an incredible 256,000 transactions per second. Alibaba has global expansion plans, and the battle with Amazon will be fierce.



That is the small overhead cost incurred in collecting federal fuel taxes on gasoline and diesel, making it a hugely efficient revenue mechanism. That according to a new report on US logistics infrastructure from the American Transportation Research Institute (ATRI). Compare that to the idea of a national vehicle miles traveled (VMT) tax, which the ATRI says would require a bureaucracy as large as the IRS to collect, manage and enforce on the more than 250 million vehicles registered in the US. ATRI says only an increase in fuel taxes can effectively deliver the revenue needed to launch major investments in maintaining and expanding US roads and bridges. The ATRI also says every US state would experience significant employment gains as a result of a 10 or 20 cent federal fuel tax increase. In total, states would receive between $15 billion and $30 billion or more annually through a federal fuel tax increase; nearly half a million jobs could be created nationwide with a 20 cent federal fuel tax increase. Increasing the fuel tax has long had the support of the American Trucking Associations.



That was all the vote share the United Auto Workers (UAW) union could muster at last week's vote for or against organization at the Fuyao Glass factory opened in Dayton in 2016, taking up a portion of the mammoth former GM truck assembly plant in the Dayton suburb of Moraine, made famous from the HBO documentary "The Last Truck: Closing of a GM Plant" some 10 years ago. Workers at the windshield plant defeated the union's more than 18-month attempt to organize in a fight that drew an international spotlight. The final tally was 886  againstto 441 for the measure, according to the National Labor Relations Board, which oversaw the election, though several hundred workers failed to vote. It continues to be tough sledding for the UAW to unionized foreign transplant firms in the US. Recent prominent failed unionization campaigns include losses at a Mississippi Nissan factory this past August, and even more famously a UAW defeat at the Volkswagen in Chattanooga in 2014. Now, a another big loss at a parts plant in a rust belt state.



That is the current planning horizon in weeks based on weekly shipments for U.S.-based Xcel Brands, which supplies branded apparel from mostly offshore sources to chains like Lord & Taylor and Dillard's and private label clothing to other department stores. That is obviously much shorter than the long 6-9 month order-to-delivery cycles that have characterized the retail apparel sector for decades. According to an article from Reuters, that is changing this year, as "With foot traffic at their stores in decline, department stores that would have stocked up for the biggest shopping season of the year months ago are still in the process of placing new orders." Reuters says Macy's, J.C Penney, Kohl's, Nordstrom, Dillard's and Lord & Taylor are among the retailers buying in smaller batches with shorter lead times this year and relying on a more dynamic demand forecasting process than in the past. The risk for department stores, however, is whether suppliers can keep up with the new approach. We'll know in a few weeks, but so far, retailers have been willing to sacrifice some orders for tighter inventory management, Reuters says.