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Supply
Chain by the Numbers |
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- July 7, 2022
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Walmart to Add New Logistics Fees on Vendors; US PMI Falls Again; Amazon adds to Prime with Grubhub Deal; US Factory Constuction is Soaring |
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Unknown Dollars |
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That is how much some Walmart vendors are going to be asked to pay in a new fee to transport goods to the retailer's distribution centers and stores, according to a memo viewed by the Wall Street Journal and reported this week. The new fee will include a fuel surcharge and a “collect pickup charge” starting August 1. The shift “is a result of Walmart adapting to the significant transformation and increased cost seen in the transportation industry over the past few years,” said the memo sent to suppliers last Friday. But the size of the fees apparently is not clear. The collect pickup charge will be calculated as a percentage of the cost of goods received by Walmart. The fuel surcharge is based on the cost of fuel to transport the goods. Walmart vendors can stop using Walmart’s collect shipping service and switch to prepaid shipping, where the vendor itself arranges and pays for shipping into Walmart’s distribution network, the retailer said on its internal website for vendors. |
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| That was the level of the US Purchasing Managers Index for June, as released last Friday from the Institute for Supply Management. That is above the key 50 level that separates US manufacturing expansion from contraction, but also is down 3.1 percentage points from the reading of 56.1 in May, and represents the lowest score in two years. In worse news, the New Orders Index fell into contraction territory at a level 49.2, 5.9 percentage points lower than the 55.1 recorded in May. Still, the PMI of 53 indicates expansion in the overall economy for the 25th month in a row after the last contractions in April and May 2020. |
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116% |
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That is the increase in the number of new manufacturing facilities in the US over the past year, dwarfing the 10% gain on all building projects combined, according to Dodge Construction Network. Is the long predicted reshoring wave finally actually happening? There are massive chip factories going up in Phoenix. Intel is building two just outside the city and another in Ohio. Taiwan Semiconductor Manufacturing is constructing another one in Phoenix. And aluminum and steel plants that are being erected across the south, including in Alabama (Novelis), Arkansas (US Steel); and Kentucky (Nucor). There are many other projects planned or underway. But they all point to the same thing — a major re-assessment of supply chains in the wake of port bottlenecks, parts shortages and skyrocketing shipping costs that have wreaked havoc on corporate budgets in the US and across the globe. |
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That is the potential ownership share Amazon can take in food delivery firm Grubhub, under a deal that will include the service as part of the Amazon Prime program. Amazon has the option to take a 2% stake in Grubhub, with the possibility to acquire up to 15% if certain business performance conditions are met. In addition, the deal, announced Wednesday, will give Amazon’s paying subscribers the option to sign up for a free one-year Grubhub+ membership (normally $9.99 a month) and receive unlimited free deliveries when they order from restaurants listed on the service. This naturally makes Prime membership more attractive. DoorDash dominates US meal deliveries, with 59% of the market compared to Uber Eats' 24% and Grubhubs' 13%, according to data published last month by Bloomberg's Second Measure.
