Supply Chain by the Numbers

- Jan. 25, 2018 -

  Supply Chain by the Numbers for Week of Jan. 25, 2018

US Truckload Rates Continue to Soar; Is Drop in Global Foreign Investments a Sign Globalization has Reached Peak? Coke Announces Massive Recycle Program, Greenpeace Criticizes; US Applies Big Tariffs to Washing Machine Imports



That was the jump in the Cass Linehaul Index in December – the second month in a row of more than a 6% rise in year-over-year US truckload rates, to an all-time high of 134.5 versus a January, 2005 baseline score of 100. After being negative relative to the previous year for 13 months in a row from March 2016 through March 2017, the Cass TL Linehaul Index has not only been positive now for nine months in a row, but pricing appears to be accelerating in the face of modestly rising freight volumes gains and a lack of capacity due to the driver shortage. "In just the last six months, our pricing forecast has increased from a -1% to 2% change to up 6% to 8%, and now gives us reason to believe the risk to our estimate may be to the upside," stated Donald Broughton, a transportation sector analyst that helps Cass with the index.



That was the drop in so-called "foreign direct investment" (FDI) globally last year, according to a new report from the United Nations. FDI covers everything from new factories to international mergers, and was still $1.52 trillion in 2017, but last year marked the second straight year of decline. The drop is surprising in this period of a growing world economy, and, the UN says, may indicate that the significant backlash against globalization is having some tangible effects on where businesses choose to invest. In a earlier report last year, the UN had expected to see a rise of 10% in FDI in 2017. The decline included a 32% drop to a 14-year low of $571 billion in what are known as "greenfield" projects—where businesses build and equip new factories and distribution centers. The drop in FDI was also particularly sharp in developing economies at more than 30%. While down last year, the $311 billion in FDI in the US was far above the level of number 2 China, at $144 billion. While the UN expects some modest growth in global FDI in 2018, it says the era of ever-growing globalization has come to an end.



That is the percent of the total number of bottles and cans Coca-Cola produces that it will recycle by 2030, according to the company's new World Without Waste program. But it is important to note the precise wording of that commitment – Coke is not saying that it will recycle all of the containers it produces, but rather will recycle the number of beverage packages it produces whether they were created by Coke or others. By 2030, the Coca-Cola system also aims to make bottles with an average of 50% recycled content. It did not provide the current level of recycled content in its packaging. Environmental group Greenpeace, however, was not impressed with the Coke news. "The plan failed to include any reduction of the company's rapidly increasing use of single-use plastic bottles globally, which now stands at well over 110 billion annually," Greenpeace said in a statement issued after Coke's announcement. Coke CEO James Quincey responded to the Greenpeace barbs by saying that "If we recollect all the bottles, there is no such thing as a single-use bottle. Every bottle comes back and every bottle has another life." We report, you decide…



That is the new US tariff on large residential washing machines for the first 1.2 million units imported annually, according to new rules the Trump administration announced this week. The duty then rises to 50% on imported washers above the 1.2 million level. The US is also putting in place a 50% tariff on washer parts. The move immediately spurred Whirlpool, which petitioned for relief, to announce that it had added 200 new full-time positions to its huge washer plant in Clyde, Ohio, to meet an expected boost in demand. The factory already employs more than 3,000 people. Interestingly, also benefitting will be Chinese company Haier, which recently acquired GE's appliance business and its huge factory complex in Louisville. China, Mexico and other countries issued strong statements condemning the move, and it is hard to know what retaliatory measures some of those companies might take. Swedish company Electrolux AB faces tariffs of more than 70% on its washing machines it produces in Mexico. Is a real trade war on the horizon?