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Supply Chain by the Numbers

- Aug. 25, 2022

  Supply Chain by the Numbers for Aug.25, 2022

China Manufacturing Share Growing; Drone Startup Planning many NewHires; Mixed Data on Freight Tonnage; China Heat Wave Shuts Factories




That was China’s share of global exports by value in 2021, up from 13% in 2019 before the pandemic. That according to according to new data from the United Nations Conference on Trade and Development. That means rather than losing its position as the world’s factory as companies supposedly rethought Chinese sourcing strategies in the face of disruptions, China actually gained strength from the pandemic. Major competitors’ share of global exports shrank over the same period, suggesting China’s gains came at the expense of others. Germany’s share of global exports fell to 7.3% in 2021 from 7.8% in 2019; Japan’s share declined to 3.4% from 3.7%; and the US’ share slipped to 7.9% from 8.6%. Generous handouts by governments in the US and other advanced economies to tide workers through the pandemic pushed Western spending up. Chinese factories were swamped with orders and China’s share of key exports rose. It appears the reshoring rhetoric remains a lot more talk than action.


95 Degrees F

That was the overnight low temperature last week in some of Chinese cities, as the country undergoes a heat wave that is having major supply chain implications. As a result, factories located in extremely hot provinces are shutting down. Toyota and Contemporary Amperex Technology, for example, suspended operations in Sichuan to save power. Contemporary Amperex Technology is the world’s biggest battery maker. Other companies, such as Tesla and China's largest automaker SAIC Motor, have seen operations affected in Shanghai, as suppliers in the area can’t ship parts because the rivers have dried up. On Sunday, the government of Sichuan - a major Chinese manufacturing hub for the electric vehicle industry and home to several of Tesla’s suppliers - told factories they’d have to go without power for several more days as the region reserved power for residents. Wow.




That’s how many jobs drone delivery start-up DroneUp plans to create over the next couple of years, the company announced this week. Fueling the new hires: DroneUps growing partnership on drone deliveries with Walmart. The company will spend $7 million expanding its Virginia Beach headquarters, a move it says will create 510 new jobs. DroneUp also plans to establish a new testing, training, research and development center for drone operators at nearby Richard Bland College, creating 145 more new jobs. DroneUp has been partnering with Walmart on its nascent drone delivery program since last year.




That was the rise in the American Trucking Associations’ Freight Tonnage Index for July versus 2021, according to the ATA this week. But as with most freight data lately, the numbers were mixed. Despite the year-over-year gain, the ATA index was down 1.1% versus June. Through the first seven months of 2022, US tonnage is up 3.4% compared with year-ago levels. The July number also marks the 11th consecutive month of gains versus prior year. However, the ATA says the month-over-month decline was tied to softer consumption of goods, declining home construction, and slower manufacturing activity.

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