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Supply Chain by the Numbers

- May 13, 2022

  Supply Chain by the Numbers for May 13, 2022

Soaring Inflation Continues On; Negotiations between Terminals and West Coast Dock Workers Begin; Diesel Prices an Issue Across the Globe; Shopify makes Big Fulfillment Acquisition




That was the price of on the road diesel fuel in the US Thursday, according to the daily market survey from AAA. It also represented an all-time high in diesel prices for an unbelievable 14th straight day, as truckers suffer and the costs to move goods drives the price of everything up. Diesel fuel costs have risen 56% so far this year, far exceeding the increase in the benchmark price for crude oil. Retail unleaded gasoline prices have risen by a lower 34% to $4.41 per gallon. The shortage of diesel and soaring costs is a global issue. Global inventories of refined oil products including diesel have fallen to worrisome low levels, the International Energy Agency said Thursday.



 That is how many dock workers at 29 West Coast ports and terminals, including of course the dominant twin ports of Los Angeles and Long Beach, are represented by the International Longshore and Warehouse Union (ILWU). Next week, the ILWU begins negotiations on a new contract with the Pacific Maritime Association, which represents ports and terminals on the West Coast. The talks of course come after months of throughput issues at the ports, and now soaring overall inflation. ILWU International President Willie Adams wrote in an open letter dated Friday that the union seeks “a contract that honors, respects, and protects good American jobs and US importers and exporters.” Dockworkers are expected to demand higher wages, improved benefits, and limits to the automation of cargo-handling facilities. Most seem to agree the union enters the negotiations in a stronger position than usual. A stike or lock-out could bring the movement of goods to its knees.




That was the rate of US price increases in April versus 2021, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics this week. That represented a slight decline from the peak of 8.5% in Marc, but was still close to the highest level since the summer of 1982. Rising gasoline and grocery prices have been one problem, but inflation has now spread beyond those two areas into housing, automobiles, and a host of other areas. After that bad news, the BLS on said Thursday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, climbed 11% in April from the previous year. On a monthly basis, prices grew by 0.5%. Although again that marks a slight moderation from March's reading of 11.2%, it is still at almost crisis levels that deeply threaten the overall economy.



$2.1 Billion

That is how much web store front company Shopify is going to spend to acquire ecommerce delivery company Deliverr, in a deal announced last week. The move is just the latest in fast-growing Shopify’s push to develop its own fulfillment network that allows its customers to compete better with Amazon. The Canadian company said that it plans to merge Deliverr with its existing fulfillment network to form a broader logistics unit headed by newly appointed chief executive of logistics, Aaron Brown. The acquisition will help Shopify “accelerate its roadmap by assembling an end-to-end logistics platform that manages inventory from port to porch and across all sales channels,” Shopify Chief Financial Officer Amy Shapero. But Deliverr is really mostly a software solution. Deliverr’s main customers ship their orders through a variety of sites that may include Fulfillment by Amazon, their own warehouses or even garages in some cases.

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