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Supply Chain by the Numbers

- March 20, 2020 -

  Supply Chain by the Numbers for March 20, 2020

Amazon Gets Stingy Passing Out Wet Wipes; Oil and Gas Prices Collapse; Costco Spends Big on Last Mile Delivery Firm; Some Logistics Stocks Tank, Others Hang Tough



That's the number of disinfectant wipes a group of some two dozen Amazon delivery drivers claim they received from an Amazon supervisor to clean their delivery vans before departing a fulfillment center for their routes. The drivers were employees of one of Amazon's Delivery Service Partners. That, according to a report from Bloomberg, despite the fact that the vans are shared across drivers and the incident occurred in California, one of the states hit hardest with the coronavirus. When the supervisor told the drivers they could each only take one wipe from the canister, they “thought it was a joke at first,” Bloomberg says. Upon realizing it wasn't, the drivers got busy figuring out how to use a tiny wipe to clean their vans packed with boxes touched by many others. One driver furiously scrubbed her bar scanner since she touches it frequently. But Amazon, like most everyone else, is running into other issues as well, like workers testing positive for the virus in its fulfillment centers, causing either a facility shutdown or causing high levels of absenteeism. And with corona said to be able to live on corrugate materials for 24 hours or more, there are concerns infect workers at Amazon or anywhere could be sending the virus on to customer's homes.



That was about the price of a share of stock in XPO Logistics this week, a company which has been seen its value has be hammered even more than most in the Wall Street meltdown. That was way down from all-time high of about $116 per share in April 2018, as then investors liked CEO Brad Jacobs' aggressive acquisition strategy. It is also down from a more recent high of $99 per share seen in February after Jacobs said the company might sell off many of its acquired businesses. Other logistics firms have fared better. UPS, for example, seen its share price stay steady and even rise a bit while rest of the market was cratering, though that was after the stock fallen into the low $90s not long before crisis from $115 or so at the beginning of the year. FedEx has been about flat since the market meltdown, but it also had seen a big decline in its price to the $90s from $163 as recently February 21.


99 Cents

That was the price of a gallon of regular gas at a BP station in Kentucky this week, in what was believed to be the first store to see less than a dollar at the pumps. But it will almost certainly not be the last to break the one dollar barrier. That low price of course is coming from a combination of a dramatic fall in the price of oil, in part the result of a strange production war between Russia and Saudi Arabia, and a rapid collapse of demand for oil products in the face of the virus crisis. The global price for Brent Crude fell to as low as about $28 per barrel this week, the lowest level amazingly since early 2003 – and it is very likely to fall further in coming weeks. One worry is that the rock bottom prices will kill the US oil fracking industry, which cannot profitably produce oil at these levels, risking America's recent energy independence and its rise as a major oil producer that has helped to keep oil prices low.


$1 Billion

That's how much club store giant Costco said this week that it will spend to acquire last mile delivery company Innovel Solutions from Transform Holdco LLC, the operator of Sears and Kmart stores. Costco said Innovel employs more than 1,500 people and operates 11 distribution centers and more than 100 final-mile cross dock centers. The Seattle-based warehouse-club operator said Innovel provides final-mile delivery and installation for large and bulky products, such as appliances, furniture and mattresses. Costco, which has been a customer of Innovel since 2015, said it funded the deal with its existing cash balances. That news comes after Target acquired last mile delivery firm Shipt in late 2017 for $550 million. Shipt uses a large network of "shoppers" to buy and provide same day delivery for store merchandise.

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