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Supply Chain by the Numbers

- May 5, 2022

  Supply Chain by the Numbers for May 5, 2022

Amazon Workers on Staten Island Say No to Union this Time; US PMI for April Positive but Slowing; Joint Venture to Build Refridgerated DCs; Now Chip Making Equipment cannot get Enough Chips



That is the percent of workers at an Amazon sortation center in Staten Island, New York that voted to reject unionization, in a somewhat surprising result, as announced by the National Labor Relations Board (NLRB) Monday. Facility “LDJ5” is just about a four-minute drive from Amazon’s JFK8 facility, which made big news when in April its workers approved joining a makeshift union organized by former Amazon workers. Many thought the momentum would continue for LDJ5 to join the same union in a vote just a few week later, but the workers not only voted not to organize, they did so in decisive fashion. Many labor forces were certain the success at JFK8 would quickly spread to other Amazon facilities, but now have to really question that thesis.



That is how many class A, state-of-the-art cold storage warehouse projects are planned under a partnership announced this week between private equity company Bain Capital and Barber Partners, a commercial real estate developer. The joint venture launches with the objective of deploying $500 million of asset value over the next several years. The first project will be speculative freezer/cooler facility located in the Dallas-Fort Worth area. Situated on approximately 34 acres, the building will be 302,400 square feet and feature a 50-foot clear height, allowing the latest in racking technology and material handling systems to be used. Construction will commence in early summer 2022 and the joint venture is poised to add several additional sites across the country in the coming months. The market has recently seen major shortage of refrigerated space in the US.




That was the level of the US Purchasing Managers Index (PMI) for April, released Monday by the Institute for Supply Management (ISM). That was comfortably above the key 50 level that separates US manufacturing expansion from contraction, and also indicated expansion in the overall economy for the 23r d month in a row, since the last contractions in April and May of 2020. But the PMI showed perhaps some signs of a slowing economy. The April score was down 1.7 percentage points from the March reading of 57.1. It was also the lowest level seen in the index since July of 2020. Both of those data points could be signaling a slowdown in the face of rampant inflation, the Ukraine war effect, a now sinking stock market, and other pressures. Most other measures in the ISM report were also headed in the wrong direction, though modestly. For example, the important New Orders Index came in at 53.5, down just 0.3 percentage point compared to March. Similarly, The Backlog of Orders Index registered 56, falling a steeper 4 percentage points lower than the March level of 60.




That is the lead time in years now seen in orders for new semiconductor manufacturing equipment, way up from just a few months before the pandemic. That according to an article this week in the Wall Street Journal. The irony: the long lead times for the equipment are in large part coming from the same shortage of chips used to power the sophisticated equipment that auto makers and many other sectors have seen for now nearly three years, holding back production in a number of industries. Chip testing machines, for example, use up to 80 semiconductors. And the problems are not expected to end any time soon, with many chip executives saying the shortages will persist into 2023 and 2024 - or even longer. Chip companies are pressing for preferential treatment, arguing that if deliveries to semiconductor makers are given priority, the shortage will ease more quickly.

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