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Supply Chain by the Numbers

- April 21, 2022

  Supply Chain by the Numbers for April 21, 2022

No Sign of Freight Recession Yet; Telsa Workers go Back to China Factory - and Stay There; US Manufacturing Output again Strong in March; USPS to Slow Some Package Deliveries



That was the increase in March versus February, according to the latest Freight Tonnage Index from the American Trucking Associations (ATA). That is pretty strong growth, indicating we have not slipped into a “freight recession” as many have been predicting quite yet. In fact, that was the largest sequential gain month over month since May 2020. Compared with March 2021, the seasonally adusted index increased 3.8%, which was the seventh straight year-over-year gain and the largest over that period. March was also the eighth straight month-to-month improvement, with a total increase of 7.4% over that period. Consistent with that ATA number, the Cass Shipments Index, also released about a week ago, was also up 2.7% in March versus February. “We’re certainly seeing a freight slowdown and spot market correction, but in our view, it is too early to call it a fr eight recession,” the Cass report says.



That is about how many workers at the Chinese Tesla factory in Shanghai were brought back to work this week, after weeks of shut down under China’s severe rules in reaction to the latest COVID outbreak in the region. That’s about half of the total workforce at the plant. There was just one catch: All of the workers must live on-site at the factory under a “closed-loop system” in order to reduce the risk of contracting or spreading Covid-19. The returning employees will be working 12 hours per day, six days a week under stringent working conditions. Living at the factory may be tough, but it could be better than being confined in their own apartments without pay, and possibly facing food shortage, as has been the case under the rules since a COVID outbreak started roughly three weeks ago. Tesla will provide returning workers with sleeping bags, mattresses and three meals a day. Workers will be sleeping on the factory floor in a designated area, with showering and entertainment spaces said to be coming soon. Other companies are facing similar requirements to bring workers back.





That was the level of the US Manufacturing Output Index for March, as reported last Friday by the Federal Reserve Bank as it does every month. That was a nice gain from the February reading of 101.7, which was also up nicely from 100.5 in January, making two consecutive month with strong manufacturing gains. The March reading was also up 4.9% from the same month in 2021. However, at 102.6, it still means the index is up just 2.6% from the baseline year of 2012, now 10 years later. The all-time high was 110 in late 2007.



That is how many exta days it will take longer for some package deliveries from the United States Postal Service, the USPS said Monday. The new service standards, scheduled to go into effect May 1, will add up to one or two days to some packages traveling long distances, representing about 30% of its total package volume. Most delivery times will be unaffected. Still, it seems possible the USPS will lose some market share on those longer deliveries. This all part of the the Postal Service’s plan to reduce more than $160 billion in projected losses over the next decade. Part of the savings will come from reducing the USPS' reliance on air transportation, using more trains and trucks to transport parcels over long distances before final delivery.

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