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Supply Chain by the Numbers

- Sept. 10, 2020 -

  Supply Chain by the Numbers for Sept. 10, 2020

Stimulus 2 would be Great News for us Economy; Samsung Bio Building Massive Pharma Plant; Rail Car Makers Struggling; FedEx Plans Massive Hiring for Unprecedented Peak Season


$1.5-2 Trillion

That is the range of an expected second federal government stimulus program to spur economic growth slashed by the pandemic, according to a new research report from analysts at Morgan Stanley. The good news: Morgan Stanley says that forecasted stimulus, when coupled with the faster-than-expected pace of economic recovery, can bring the real US GDP back to pre-pandemic levels in the second quarter of 2021. That's two quarters faster than without the stimulus, the investment bank says. The Morgan Stanley analysts raised their 2020 GDP forecast to -3.4% from -5.3%, while the firm's 2021 estimate gained to 6.4% from 3.4%. Fourth-quarter growth will reach -1.5% this year instead of the previous forecast of -6.2, the analysts predict, all good news for the economy but at the price of an ever-rising deficit.


2.5 Million

That is about how many square feet a new pharmaceutical plant being built by Samsung Biologics will take up when it is complete in 2022, the company announced last week. That means the $2 billion factory will be bigger than the company's three existing plants combined and slightly larger than the Louvre. What's behind the massive investment? Samsung acts as a contract manufacturers, producing final products or intermediate compounds for pharma and biotech companies. The company expects a huge boost from coronavirus-related products – and also from the moves by many companies away from dependence on China for critical medicines and ingredients - perhaps to the new Samsung factory in South Korea. The company said production is already about maxed out right now at the three existing facilities. When complete, the new factory will be the largest of its kind in the world.




That was the decline in total US rail car volumes through August, according to the Association of American Railroads. That decline reverses years of growing rail volumes, with even the once fast growing intermodal sector seeing volume declines. With car loads falling, rail carriers need less equipment, and that in turn is putting pressure on rail car manufacturers. The Wall Street Journal reports that Dallas-based manufacturer and leasing company Trinity Industries is looking at ways to outsource the making of railcars so it can reduce labor costs permanently after losing $206.9 million in the second quarter. Greenbrier Companies had cut its North American workforce by 40% by midsummer and closed 11 rail production lines. Some 29% of North American freight cars were in storage last month, according to the AAR, up from 16% two years ago and a huge number.




That is the incredible number of temporary workers FedEx said this week it will hire for the 2020 Holiday season. In fact, FedEx in a statement said that it expects an "unprecedented peak holiday shipping season" this year, which is saying a lot given strong gains in ecommerce for many years running. The thinking is the pandemic will be just another reason for shoppers to stay out of stores and shop on-line. Rival UPS said recently that it will release its hiring numbers next week, but the company already hired 39,000 permanent employees globally in the second quarter, so any holiday hires would be in addition to workers brought on to help handle stepped up needs due to Covid-19. Over the past three years, UPS has hired about 100,000 peak season temps globally. Amazon will surely also add tens of thousands of workers despite strong hiring already in 2020 as well.

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