Supply Chain by the Numbers

- Oct. 5, 2018 -

  Supply Chain by the Numbers for Week of Oct. 5, 2018

Amazon Raising Worker Pay - Sort of; Electric Cars are on the Move; What does it Cost to Operate a Truck? US Manufacturing Maintains Strong Pace in September



That is now the new minimum hourly wage for workers in Amazon fulfillment centers, up a 2 to 3 dollars versus the starting wages in some areas. The move is probably the result of the growing challenge for almost all DCs to attract and retain workers – and also the growing criticism against Aamazon pay and working conditions that's been cropping up in social media posts and some newspaper articles in recent months – most suggesting that world's richest man CEO Jeff Bezos can do better.  Amazon is also giving hourly workers who made $15 or more a raise, though it didn't specify the increase. However, the company is doing away with certain incentive pay and stock compensation for hourly FC and customer-service employees, at least partially offsetting the cost to the company of the wage hikes – and the net benefit to employees. "We listened to our critics, thought hard about what we wanted to do, and decided we want to lead," Bezos said in a statement. "We're excited about this change and encourage our competitors and other large employers to join us."



That is the percent increase in the number of plug-in hybrid and battery vehicles that will be available for sale worldwide in 2019. That will take the total number to 2016, according to Bloomberg NEF research. And electric car makers are getting a real boost from rising oil and gasoline prices, with oil seemingly on the march to $100 per barrel again, now at about $85. While electric and plug-in hybrid vehicles are still a tiny fraction of global sales, growth rates have been robust. In Q2, deliveries increased by 77% 2017 to 411,000 vehicles worldwide, according to Bloomberg. Even before this latest rise in oil prices, that growth was forecast to rise a further 49% by the same quarter next year. Across Europe, utilities are pouring money into charging networks, with hopes to ease concerns by car owners about recharging options. China has an ambitious national program to build charging infrastructure. In the US right now – not so much. The electric car wave really does now appear to be on the horizon.



That was the marginal cost per mile for US freight carriers in 2017, according to new research from ATRI. Perhaps surprisingly, costs were higher than that in both 2011 and 2015, though just barely, at $1.70. ATRI also tracked the average hourly cost for fleets, totaling $66.65 per hour, which is up nearly $3 from 2016. Over the three previous years, operating costs were trending downwards due to decreased fuel prices, which bottomed out in 2016. However, there has been a rebound in fuel prices since then. In 2017, fuel costs made up about 36 cents of the cost of every mile. That's an increase of a little more than 3 cents, but still well below the high of 64.5 cents per mile recorded in 2013. Driver wages and benefits make up the largest chunk of fleet's operational costs, representing 72.9 cents or 43% of the total average marginal costs. Responding to an increasing need for qualified truck drivers, driver wages and benefits have increased 33.6% in the past five years.



That was the level of the September US Purchasing Manager's Index from the Institute for Supply Management. That was down a bit from the August level – which was the highest reading since 2004 – but still solidly above the 50 mark that separates manufacturing expansion from contraction. It also means manufacturing activity was up for the 25th consecutive month, quite a streak. The new orders index was also down a bit, but also still strong, with a reading of 61.8, meaning the majority of companies are seeing an increase in their order books.