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Supply Chain by the Numbers

- June 4, 2020 -

  Supply Chain by the Numbers for June 4, 2020

Amazon Ends Hazard Pay for FC Workers; Nikola with New Sales Model for Its Hydrogen Trucks; May PMI Shows Big but Stable Decline in US Manufacturing; Renewables Exceed Coal Share for First Time



That was the (temporary) increase in hourly wages that Amazon rolled out to fulfillment center employees in March to encourage them to come in to work in the face of risks from the coronavirus at FCs – a form of hazard pay. Now, however, the pay bump is gone – as is the equally temporary double time pay for overtime hours. Always positioned as temporary and scheduled to expire at the end of May, both policies ended this week, as Amazon seems to have returned to mostly normal operations. In April, Amazon also phased out another policy of allowing workers to take unlimited unpaid time off to allow them to stay home if they felt unsafe coming to work. Don’t try that excuse now, FC workers. Amazon's starting pay for FC associates is $15 an hour, meaning since March when the wage hike was introduced, minimum pay for a while rose to $17 an hour, and more for experienced staff.



That is how many units of its hydrogen-electric Class 8 trucks new age emissions free truck maker Nikola Motors has recently forecast it will sell in 2024. But to get to those levels, the company will need to change its current go to market model. This week, Nikola and logistics service provider Ryder announced they have mutually agreed to end their exclusive partnership on Nikola’s tractors. In 2016, at the same time it unveiled its first electric Class 8 tractor, Nikola announced a strategic partnership with Ryder. And not much more than a year ago, Nikola was touting a different type of ownership model that the Ryder partnership would enable, a lease program under which truck payments, on-going maintenance, and the costs for the hydrogen fuel would be rolled into a single price monthly price. Nikola says with the ending of the Ryder arrangement it will now be working with major truck dealerships to sell and service Nikola trucks, and that it expects soon to see a large backlog of Nikola trucks on order.



That was the level of the US Purchasing Managers Index for May, as released Monday by the Institute for Supply Management. That is well below the key 50 mark that separates US manufacturing expansion from contraction, but that score was up 1.6 percentage points from the April reading of 41.5, which was the lowest seen since the bottom of the Great Recession in 2009, when it dropped to just 39.9. Some economists had predicted at the time that the April Index level would be as low as 35. In a negative sign for future manufacturing growth, the ISM New Orders Index registered just 31.8 in May. While that was an increase of 4.7 percentage points compared to the 27.1 reported in April, it also means new orders contracted for the fourth consecutive month. This is also the New Orders index's second-lowest reading since December 2008, only surpassed by the April number, In December 2008 it registered an extremely low 25.9.




That was the share of renewable energy sources in relation to US electricity generation in April according to the latest report from the Energy Information Administration. Why is that important news? Because it mean the share of renewables was greater than that of coal for the very first time, as coal's continued decline left its share at just 20% for the month. The EIA says that outcome reflects both seasonal factors as well as long-term increases in renewable generation and decreases in coal generation. EIA includes utility-scale hydropower, wind, solar, geothermal, and biomass in its definition of renewable electricity generation. Coal consumption fell 15% in 2019 compared with the year before, while renewable-energy consumption grew 1%, the EIA said. The agency added that the biggest growth in renewable energy has come in wind and solar energy. Wind is now the most-used source of renewable-power generation in the US annually, surpassing hydroelectric power in 2019 for the first time ever, according to the EIA. Natural gas remains the top source of power generation, keeping the lead after surpassing coal in 2016.

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