Supply Chain by the Numbers

- Oct. 18, 2018 -

  Supply Chain by the Numbers for Week of Oct. 18, 2018

JB Hunt has Made Big Hikes to Driver Pay; US Manufacturing Chugging Along afterTariffs; No End to Lower Availability for US DC Space; MIT Making Huge Investment in School for AI



That's by how much carrier JB Hunt has increased driver pay at its dedicated contract carriage unit over the past year or so, in an effort to attract drivers, the company said in its Q3 earnings call last week. There have been numerous anecdotal reports of carriers making similar wage moves in the past couple of years in the face of the ongoing severe driver shortage, but that trend is really not showing up in the overall numbers. Average hourly earnings for long-distance general freight trucking employees were up just 1.9 percent in September from a year earlier, the goverment data finds. And that is in a sense confirmed by the success Hunt says it is achieving from the 10% pay hike. "We have been recruiting drivers very well in this difficult market because of the pay that we've been able to price into our deals for our drivers," Nicholas Hobbs, president of the contract-services business, said on the call.



That was the level of the index on US manufacturing output for September, according to the latest report from the Federal Reserve last week. That was up a solid two-tenths of a percent over August, and a strong 3.5% year after year. It also means US manufacturing output has now been up for four straight months, as the effect of the new Chinese tariffs so far at least seems benign or even positive for US manufacturing in aggregate. Still, as we always note, that 104.8 level means US production is up just 4.8% from the baseline year of 2012, now almost 7 years later.



That amazingly is how many consecutive quarters, dating back to early 2010, that the availability of US warehouse space has declined year over year, in an amazing stretch of a bull market run. The availability rate fell again in Q3, according to the latest quarterly analysis from real estate firm CBRE, to just 7.1% on a national average basis. CBRE says that in Q3, preliminary data based on the availability rate show net absorption at 63 million sq. ft. and completions at nearly 50 million sq. ft. for warehouse/distribution center space across the US – meaning 13 million more sq. feet of space was leased than was built in the quarter. Among the many metro markets CBRE follows, the lowest availability rates were in Honolulu (3.7%), followed by Portland (4.3%), Cincinnati (4.4%), Los Angeles (4.5%), Orange County (5.1%) and Jacksonville (5.3%).


$1 Billion

That's how much the Massachusetts Institute of Technology is investing in a new college of computing. Slated to open September 2019 with an actual new campus building coming in 2022, the college will focus on educating a new generation of artificial intelligence experts, MIT said last week. That is obviously a very bullish sign on the use of AI in almost everything. In fact, a major focus of the new center will be to make more workers
" bi-lingual" – fluent not only in their own disciplines raging from biology to history but also in how artificial intelligence can be applied to those fields. And, it seems certain, in the supply chain as well. MIT says the initiative will help position the United States to lead the world in the rapid evolution of computing and AI. A whopping 50 new academic positions will be created by the new college, and MIT promises it will transform education and research in public policy and ethical considerations relevant to computing and AI. There will certainly be many of those questions indeed.