Supply Chain by the Numbers

- Aug. 2, 2019 -

  Supply Chain by the Numbers for Aug. 2, 2019

US Manufacturing Sector is Drooping; Major Mergers in Ship Building Sector; Investments Keep Flowing to Logistics Automation Vendors; US Truckers Raised Revenues Sharply in 2018



That was the level of the Purchasing Managers Index for July, in numbers released as usual on the first of each month from the Institute for Supply Management (ISM). That still keeps the index just barely above the 50 mark that separates US manufacturing expansion from contraction, causing many pundits to raise concerns over the overall strength of the US economy. July also made it four consecutive months of declines in the PMI, as the measure has fallen incrementally each period since coming in at 55.3 in March. The New Orders Index, an indicator of future manufacturing activity, was up in July, but only to a level of 50.8 versus 50.0 in June, as the order books of US manufacturers remain flat. "General business trends are continuing to show signs of weakness resulting from tariffs and cost impacts of importing and exporting," one survey respondent in the electrical components maker or said.



That will be the combined share of the global freight ship building market, after news of two mergers in the sector this week. Those mergers involve the combination of South Korea's Hyundai Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co., while the China Shipbuilding Industry Corp. and China State Shipbuilding Corp. will also merge - under pressure from Beijing. The mergers comes as the global shipbuilding business is starting to regaining its footing after a multi-year downturn in demand from bulk and container carriers, which sent orders plummeting. Shipbuilding is a vital part of the economies in Asian countries such as South Korea and China, employing hundreds of thousands of people. It is one of South Korea's flagship industries, accounting for 7% of the nation's exports and 5% of employment. Beyond their commanding market share, the two groups have enjoyed steady financial backing from state-owned creditors that have bailed them out repeatedly, or massive orders from state-controlled shipowners that make up shortfalls from other clients. The US is not a player in a market that will now be dominated by two giants.


$25 Million

In the latest big investment in logistics automation technology, that is how much Canadian start up Attabotice announced it has raised to further its development of its automated storage and picking system technology. The new investors include hedge-fund firm Coatue Management LLC, Comcast Ventures and the venture capital arm of Honeywell (which a few years ago acquired materials handline automation provider Intelligrated). The Attabotics system is really a form of mini-load AS/RS, which the company says provides 3D robotic goods-to-person storage, retrieval and real-time order fulfillment. The company was founded in 2016 and has over 200 employees. It says it was profitable in the third and fourth quarters of 2018, , and generated nearly $30 million in revenue last year. The Attabotics system uses robotic shuttles to retrieve goods in vertical storage structures, similar to other shuttle systems from companies sucH as Dematic, SSI Schaefer, and others. It is used in DCs, but some think it could also go in the backrooms of of big box retailers.


$796.7 Billion

That was the size of revenue in the US trucking sector in 2018, according to a new report from the American Trucking Association(s). That was up nearly $100 million, representing a gain of 13.8% from 2017. Since the ATA's Freight Tonnage Index was up 6.6% in 2018, it seems clear the 6.2 percentage point difference between that freight growth rate and the 13.8% growth in revenues can be attribute to rising rates, which were up big in most of 2018. The ATA also found that in 2018, trucks moved 11.49 billion tons of freight - 71.4% of the nation's tonnage freight - with trucking revenues accounting for 80.3% of the nation's freight bill. The ATA report also found that most carriers are still small companies. Fleets with six or fewer trucks make up 91.3% of all fleets. Increase that number to 20 trucks and small fleets make up 97.4% of fleets.

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