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Supply
Chain by the Numbers |
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- April 1, 2021
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US Purchasing Managers Index Jumps in March; Rail Freight Volumes from China to Europe Soaring; Hundreds of Ships Waiting to Go through Unblocked Suez Canal; Will China ever Overtake US Wealth Levels? |
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64.7 |
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That was the incredibly strong level of the March Purchasing Managers Index, as released by the Institute for Supply Management (ISMs ) on Thursday. That was up 3.9 percentage points from the already strong February reading of 60.8, and puts the index well above the 50 mark that separates US manufacturing expansion from contraction, and another sign the US economy is very strong. The March reading also represents expansion in the overall economy for the 10th month in a row after contraction in April. In a good sign for future US manufacturing activity, the New Orders Index registered 68.0, up 3.2 percentage points from the February reading of 64.8. But the report also again showed signs of emerging supply chain inflation, with Prices Index at an extremely high level 85.6, about flat with February, meaning almost all companies are seeing higher input costs. Of the 18 manufacturing industries tracked by ISM, 17 reported growth in March.
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| That's how many years it will take for China's GDP per capita to overtake that in the US, if it ever does, according to a new report from the Economist Intelligence Unit (EIU). The latest International Monetary Fund data available showed China's GDP per capita was forecast to be $10,582 in 2020 - roughly six times smaller than $63,051 achieved in the US. The inability for China to reach per capita GDP parity with the US will hold even if the Chinese total economy overtakes US GDP, which some say could happen as soon as 2028, others 2032. However, just a few weeks ago, Capital Economics projected that shift would come years later than that range, and even then may not last, as China's workforce contracts while that of the US continues to expand due to immigration. |
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357 |
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That was the last estimate we saw as to how cargo ships of all types were waiting to pass through the Suez Canal when authorities this week finally freed the giant Ever Given container ship and it huge load of cargo. The ship was stuck in the sand after strong winds push it sideways in the Canal. Estimates vary on long it will take to clear the backlog. Egyptian officials say the logjam will be cleared in three to four days, while some shipping executives said it would take days longer. "
The vessels are totally out of sync," Otto Schacht, executive vice president for sea logistics at freight forwarder Kuehne + Nagel, told the Wall Street Journal. "
Until all vessels are back in the positions they are normally in, we will still have the after-effects in June." Another shipping executive said "
A floodgate is going to open, and it will be a fight to get into the ports," with the Canal now open. The Suez connects the Mediterranean and Red Seas to shorten trips from Asia to Europe and carries as much as 13% of global maritime trade and 10% of seaborne oil shipments. |
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That is the number of freight trains that ran from China to Europe in the first two months of this year, double the rate a year earlier according to an article this week in the UK's Financial Times newspaper. As SCDigest has reported several times, volumes have been growing rapidly in the relatively few years the option has been available, with the strong support of the Chinese government, as a way to deepen its economic ties to Europe. The central Chinese government international infrastructure strategy has emphasized the symbolism of rail cars as "steel camels" and encouraged Chinese provinices to subsidize the cost of cross-border rail transport. And interest in the rail service seems clearly to be growing in the face of months of global ocean shipping delays, general chaos and soaring rates, even before the Suez Canal shut own that ended after six days this week. The rising cost of ocean shipping means the cost advantage of shipping via ocean carriage from China to Europe versus rail has dissipated, while the rail transport offers quicker delivery times than ocean and costs much less than air freight. There are also reports that a growing number of global freight forwarders are moving to manage freight on the Chinese rail service to Europe as well.