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Supply
Chain by the Numbers |
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- May 13, 2021
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US Tariffs on Chinese Imports Worked- Sort of; Thousands of Gas Stations Closed Due to Ransonware Attack; US Manufacturers Under Supply Stress; Inflation Seems to be Here |
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$250 Billion |
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That is about the annualized value goods imported currently by the US from China that are subject to Trump administration tariffs. That is down from about $370 billion worth of imports in 2018 before the tariffs were imposed in several rounds. That according to a Wall Street Journal analysis of information from Trade Data Monitor released this week. So, it would appear the tariffs did have a major impact on US imports from China. What they did not appear to do is move those import dollars to US sourced goods, with US companies moving to alternative Asian countries for product sourcing. The Journal says, for example, that Vietnam has benefitted nicely from change, now ranking as the sixth largest exporter to the US, up from 12th place in 2018. The Journal cites semiconductors as a prime example: US chip imports from China have declined significantly since 2018 - but seen strong growth coming from Vietnam, Taiwan and Malaysia. |
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| That is about the percentage of gas stations in North Carolina that were out of fuel Wednesday as a result of the ransomware attack on the operator of the longest fuel pipeline in the US caused supply issues and in turn panic buying. That wiped out gas inventory at thousands of gas stations. There were also many stations out of fuel in South Carolina, Georgia, Florida and Virginia. If the pipeline shutdown extends past the weekend, it could create broader fuel disruptions. What a crazy world we live in. The hacked systems control the Colonial Pipeline, which delivers from Texas about 45% of the fuel consumed on the East Coast. Multiple US agencies are coordinating to relax rules and enable fuel to be shipped faster using trucks, trains or ships, but those changes are having little impact so far. While the impact is likely to be short-lived now, the incident is raising major concerns about the vulnerability of US energy infrastructure, from pipelines to the electric grid, to cyber attacks. |
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50% |
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That is by about how much corn prices have risen in commodity markets so far in 2021, making the price of a bushel almost double what it was a year ago, as inflation is raging in many product markets. And interestingly, rising corn prices impact the cost of the many items that use corn as an ingredient, not just corn flakes makers. Many food and beverage items rely on corn syrup, bourbon is made from the vegetable. Prices are also soaring for lumber, copper, gasoline, used cars and many other products, such that the US consumer price index rose at a year over year rate of 4.2% in April, according to the Bureau of Labor Statistics this week. That is up from a 2.6% rate in March and just 1.7% in February. The good news is that the price push data tis in part the result of a strong economy with lots of demand, but is worrisome in the mid-term nonetheless, with inflation potentially occurring for the first time in many years. In fairness, some of the April jumped was the result of weak comparisons in April 2020, but there is no questions right now prices are jumping. |
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That’s about how many of its about 100 suppliers that a factory in West Virginia of Italian auto parts maker Sogefi has on its “crisis management list” in terms of concerns about deliveries. Normally, perhaps one or two suppliers would be in such a status. But these are not normal times. An article this week in the Washington Post says there may never have been the level of stress points currently in US manufacturers. Start with generally strong demand, as the US economy continues to expand. Addd in a complex interplay of labor shortages, port delays, rising costs and more are leading to extreme variability and uncertainty. And that means delays, expediting, missed or late shipments from suppliers or to customers – and for many manufacturers constant firefighting. And communication about shipment issues from suppliers often is short notice. In regular environments, “You had time to react,” Todd Gregory, the plant’s purchasing manager, told the Post. “Now you’re told you’re going to miss shipments two days from now.”