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Supply Chain by the Numbers

- Oct. 14, 2021

  Supply Chain by the Numbers for Oct. 14, 2021

Inflation Surges in September; Israel with Major New Drone Delivery Test; Cass Linehaul Index Way Up in August; The Sad Story of Stranded Sailors across the World



That was the rise in the US consumer price index (CPI) in September, the Labor Department reported Wednesday. The CPI also rose 0.4% in the month compared to August. The year-over-year gain in prices was the highest for any month since 1991. Energy and food costs led the way. Gasoline prices rose another 1.2% for the month, bringing the annual increase to 42.1%. Overall food prices at grocery stores rose 1.2% in just one month, with the cost for meat rising even more, up 3.3% just in September and a whopping 12.6% year-over-year. There is much debate among economists on whether this inflation will be around for a good while or be transitory. But the Social Security Administration announced this week that the cost of living increase in social security payments for 2022 will be a huge 5.9% - good news for the 70 million US retirees, but it will add significantly to the ever growing US budget deficit next year.


That’s about how many commercial drone deliveries will be made daily by drones in Israel in the latest phase of testing in the country, towards the goal of creating a national drone network. There are five companies participating in the test, each focusing on different applications, from making sushi deliveries to a beach near Tel Aviv, to ice cream deliveries to a park area to shipments of blood, platelets and plasma to an Israeli hospital. Interestingly, the drones from all five participating companies will be managed by a single centralized control system. What’s more, some of the drones will make their deliveries by flying over heavily populated urban areas, so far a no go in the US. But this makes SCDigest believe the drone era may really not be that far away.




That bizarrely is the estimate of how many sailors are currently on ocean container or bulk cargo ships who have been abandoned by the employers in foreign ports – with some existing in near starvation conditions. Abandonment cases are counted when ship owners fail to pay crews two or more months in wages or don’t cover the cost to send crew members home, according to the International Maritime Organization, according to a story last week in the Wall Street Journal. There are probably many abandoned sailors not counted in that number due to a reluctance to speak out for fear of being blacklisted in the industry. As just one of many terrible examples, one shipping company abandoned seven container ships In the United Arab Emirates in recent months, leaving behind dozens of crew members, each owed a full year’s pay. With larger shipping lines gaining marketshare, many smaller lines are one delay or cancellation away from going out of business. When debts pile up, or the cost of repairs becomes too high, some firms choose to abandon a ship, leaving the crew economically trapped on the vessels, in some cases for many months. That in part because some countries require sailors to remain aboard as guarantors until ship owners pay port authorities for berth fees and other charges. But more commonly, sailors refuse to disembark, worried they will never get paid for months or years work if they leave.




That was the year-over-year rise in the Cass Linehaul Index, which measures per mile contract truckload rates before any fuel surcharges or other accessorials, according the Cass freight report released this week. The index was aslo up 1.1% compared to August. Cass expects US truckload rates to continue heading higher, and notes that the long-haul mix related to intermodal chassis shortages is pushing more freight off the rails and into West Coast to Midwest truckload lanes, continuing to pressure truckload rates. The Cass Shipments Index, however, slowed to just 0.6% year-over-year growth in September, falling 4.9% versus August. The shipment index includes freight moves across a number of modes, but is heavy on truckload carriage. Nevertheless, the Cass Expenditures Index rose 32% versus 2020, and with shipments rising a much lower 0.6%, it implies a rise in overall freight rates across modes of a hefty 31% year-over-year in September.

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