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Supply Chain by the Numbers

- Sept. 23, 2022

  Supply Chain by the Numbers for Sept. 23, 2022

ATA, Cass See Freight Volumes Strong in August; US Manufacturing Flat in August; Ford Sees Huge Jump in Supply Chain Costs, is not Happy; Amazon to Boost Contract DSP Driver Pay




That was the increase in the American Trucking Association’s (ATA) freight tonnage index in August versus July, as announced this week, somewhat contrary to reports of a slowing US economy. The index was also up a solid 7.4% versus August 2021. That growth number is consistent with recent numbers from the Cass Freight report, which found a 5.5% jump in shipments in August month-over-month. The 7.4% increase in the index year-over-year was the twelfth straight month of an increase in that measure, and the largest increase since June 2018. “The good news is that we continue to witness areas of freight growth in consumer spending and manufacturing, which is helping to offset the weakness in new home construction,” commented ATA Chief Economist Bob Costello.


$1 Billion

That is how much auto giant Ford expects to incur in extra supply chain costs in Q3, according to the company this week. And that surprise news led to a second announcement, that Ford was going to restructure its global supply chain. The supply chain restructuring aims to “support efficient and reliable sourcing of components, internal development of key technologies and capabilities, and world-class cost and quality execution,” the automaker said. As part of that initiative, Ford will fill a newly created chief supply chain officer position. In the first announcement, Ford said in inflation-related supplier costs were running $1 billion higher than previously expected during the third quarter, implying that that number should have been lower.




That was the level of US manufacturing output in August, according to the monthly report from the Federal Reserve Bank issued late last week. That was basically flat with July’s reading of 102.1, adding to concerns about the state of the economy. In fact, the index has been flat for the past six months, holding in a range from 101.5 to 102.4. However, the August reading was 3.3% above the level in the same period in 2021. With the national reading at 102.2, it also means US manufacturing is only 2.2% above the baseline year of 2012 (index = 100), now some 10 years later. It is also well below the all-time high of about 110 set in late 2010.



$450 Million

That’s how much money Amazon said it is going to invest in the short term in improvements for its delivery drivers, heading into peak season. It’s a little bit tricky, because Amazon does not directly employ the drivers. Rather, they work for one of 3000 Amazon’s Delivery Service Partners, generally entrepreneurs who manage fleets of up to 40 vans. The investments will include a new program called Next Mile that gives employees of participating delivery companies up to $5,250 per year for their academic studies; adding a 401(k) plan to the suite of services available to DSPs; and providing an “additional rate increases for DSPs to offer competitive pay to their drivers.” There have been sporadic complaints from drivers relative to pay and working conditions at Amazon, with some saying they cannot even take restroom breaks due to performance standards.
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