Supply Chain by the Numbers

- April 25, 2018 -

  Supply Chain by the Numbers for Week of April 25, 2018

Carriers on Binge of Raising Driver Pay; New Way to Measure Supply Chain GDP; Amazon Wants in Your Trunk; NCR Reverses Course on Reshoring



That the amazing amount by which Memphis-based Intermodal Cartage Company announced last week it is raising its pay for drivers. The company is hardly alone. Transport Topics, the magazine of the American Trucking Associations, recently wrote that "It seems that a week can't pass without a company announcing that it's boosting compensation, be it on a per-mile basis or through bonuses and incentives." Maverick Transportation just raised the pay of its over-the-road, temperature-controlled division drivers by 5 cents a mile, about 10%. Drivers in the division also are part of a $1,000 weekly minimum guarantee pay program, and the firm is offering a $5,000 sign-on bonus for drivers with at least one year of experience. Meanwhile, Oklahoma-based Groendyke Transport just announced it will soon launch the largest drive pay increase in the company's 85-year history, with rates across the board up to 6 cents per mile and an average hourly non-revenue rate increase of 9.4% for all drivers, among many other examples. And it's not just trucking: Rail carriers BNSF and Union Pacific are now offering signing bonuses of up to $25,000 to prospective workers. We say rates must rise in response.



That was the growth rate of US "intermediate inputs" in Q4. What are intermediate inputs? They can also be said to capture "gross output" (GO), a relatively new measure that reflects, if you will, the full value of the supply chain - the business-to-business spending that moves all goods and services toward the final retail market. That according to a guest column last week in the Wall Street Journal by Mark Skousen, a presidential fellow at Chapman University. SCDigest had never heard of GO, so we thought it was worth a quick read. That Q4 rise in GO was more than double the rate of real GDP growth and the fastest pace since before the Great Recession. Real GO, which includes both GDP and the supply chain, rose at an also strong 4.7% rate in Q4. "GO dispels the popular Keynesian myth that consumer spending is the driver of economic growth," Skousen writes, adding that "business spending is actually substantially larger than consumption," even though economists often say some 70% of GDP comes from the consumer. The Bureau of Economic Analysis will release its preliminary first-quarter GDP growth figure on Friday, and most estimates are for around 2% growth, but based on the Q4 GO number, Skousen expects it to be much higher.



That's how many US metro markets now have a new service from Amazon that delivers to inside a customer's car. There's a hitch: you must be an Amazon Prime member, of course, but for now also drive a recent model year car from GM or Volvo that support satellite communication services (e.g. OnStar). Amazon says it will expand the number of locations as well as eligible vehicle makes and models going forward. The service is called Amazon Key In-Car, and with the program an Amazon delivery person Amazon enters a code into a mobile app to unlock the car. The worker then places the order in the trunk, shuts the door, then used the app again to lock the car through the Satellite service. As its name suggests, the new program builds off Amazon Key in-home delivery service, which launched in October. Note – for now at least – as with the inside home delivery service it must be Amazon worker, not one from UPS or FedEx, to perform the service. A similar program was piloted a few years ago between DHL and Audi in Europe, but doesn't appear to have gone commercial.



That's how many plants of ATM, kiosk, and retail point of sale maker NCR will be shuttering in the greater Atlanta area in 2018. All told between the two plants in Columbus, GA, some 1040 full-time and contract employee jobs will be lost. The news is noteworthy because NCR was commonly cited as a successful example of a reshoring strategy, moving much production back to the US from overseas in 2009. So much for that good new story. Though the company will also shutter a factor near Beijing, it appears an offshoring strategy won out again in the end. With the announcement, NCR said it is transforming to a software and services based business and away from hardware-based solutions. The move may come with some financial pain: Columbus,  GA Mayor Teresa Tomlinson said she received a verbal agreement from the company that it would abide by any claw-back provisions related to tax incentives that NCR had received from the state and the city when the deal was struck a decade ago to bring the factories to Georgia.