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Supply Chain by the Numbers

- Sept. 17, 2021

  Supply Chain by the Numbers for Sept. 17, 2021

Amazon Plans another Huge Hiring Spree; Containers Handled per Ship Stop is Soaring; US Manufacturing Output Flat in August; Metals Prices See Huge Rise



That incredibly is the amount of workers – most of them in fulfillment centers – that Amazon is going to hire for this year’s peak season, according to a company statement this week. That’s hardly all. Amazon says these will mostly be permanent positons. And to attract workers to fill all of those slots in the tough labor market, Amazon is raising wages yet again, saying it has lifted pay for workers in distribution to an average of $18.32 an hour. But that news is frankly less amazing than the fact that Amazon is also going to open another 100 logistics facilities (FCs, sortation centers, delivery stations, etc.) across the country in September alone. It also announced it has opened 250 such facilities already in 2021.


That was the increase in the amount of ocean containers handled per vessel call at the Port of Long Beach in the first half of 2021, according to a new report from the researchers at IHS Markit this week. In fact, ports all over the world saw major increases in this metric, which the report says is a key factor in the delays and congestion now commonplace in port operations. In North Europe, container move increases were led by Felixstowe, which saw and 18% leap in boxes handled, followed Antwerp, with an increase of 14%. In Asia, Singapore’s 27% surge was followed by a 24% jump at Yantian and a 23% increase at both Shanghai and Ningbo. Interestingly, IHS Markit notes that Asian ports load or unload a container in 27 seconds, on average, from large vessel calls, compared with the 46-second average at North European hubs and only 76 seconds at US ports, more than double the time in Asia.




That was the US manufacturing output index for August, according to the monthly report from the Federal Reserve Bank this week. That was up just a bit from the 99.5 reading in July. The good news: the level of US manufacturing output was up 5.9% from August 2020. The bad news: the index is still about 5% below the 105 level seen in February 2020, before the start of the pandemic in March. And it remains still a bit below the baseline year of 2012, when the index is set at 100, now almost 10 years later.




That is the approximate cost per ton in the US Midwest for steel, compared with just about $560 in September of both 2019 and 2020. This incredible rise is obviously causing big cost problems for manufacturing companies that need steel. Aluminum prices have also experienced a similar spike. A US government index tracking the price of steel and iron increased almost 100% in August versus 2030, the largest relative increase since records began in the 1920s. And the rising metals prices are a key factor in rising inflation - for example, household appliance prices rose by 6.8% in August, according to the Labor Department, with metal costs a key factor. The prices are soaring due to a confluences of factor, including strong demand, steel makes idling capacity in 2020, and the on-going effects of the Trump metals tariffs, which the Biden administration has continued.

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