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Supply Chain by the Numbers

- June 15, 2023


Supply Chain by the Numbers for June 15, 2023


Inflation Down but not Out; UPS Drivers to get Chill; Walmart to Green eCommerce Fulfillment; Cass Says US Truckload Rates down Big in May



That was the rise in the US Consumer Price Index (CPI) in May versus 2022, according to data from the Labor Department this week. While still about double the goal of 2% inflation, the 4% increase compares to 4.9% in April and was lowest annual rise in a month since March 2021. The falling inflation number took pressure off the Federal Reserve to continue raising interest rates, and indeed later in the week the Fed decided to leave interest rates steady for now, though noting it could still send rates higher later in the year. Excluding volatile food and energy prices, the picture wasn’t as optimistic. So-called core inflation rose 0.4% on the month and 5.3% from a year ago, indicating that while price pressures have eased somewhat, consumers are still under price pressures.



That is how many delivery vehicles of all types UPS manages in the US. That is notable because this week, the Teamsters union announced UPS had agreed to equip its delivery and logistics vehicles with air conditioning systems, new heat shields and additional fans on the trucks. The union says the language in the agreement mandates the company equip in-cab air conditioning systems in all larger delivery vehicles, smaller sprinter vans, and all of UPS’ brown package cars purchased after Jan. 1, 2024. This was a major point of negotiations in the on-going talks between the union and UPS relative to a new contract. “Air conditioning is coming to UPS, and Teamster members in these vehicles will get the relief and protection they’ve been fighting for,” Teamsters General President Sean O’Brien said in a statement. We must confess we didn’t realize UPS delivery trucks had no AC.



6.5 Million


That is how many plastic bag mailers, representing more than 2,000 tons of plastic, will be eliminated in the US by the end of the current fiscal year as part of new strategies by Walmart, which announced plans to reduce the amount of packaging waste associated with its on-line orders this week. Among other things, the retailer will move from plastic to recyclable paper mailers, offer "right-sized" cardboard box packaging, give customers the option to consolidate shipping on ecommerce orders, opt out of single-use plastic bags for on-line pickup orders, and improve last-mile delivery efficiencies to reduce mileage and delivery times. Walmart added that early tests indicate promising adoption rates in terms of consumers opting out of single-use plastic bags for their on-line pickup orders, potentially helping eliminate millions of single-use bags each year from circulation.




That was the year-over-year drop in US truckload freight rates in May, according to the Cass Linehaul Index. That index measures US per mile truckload rates before fuel surcharge and other accessorials. That May drop came after rates fell 12.2% in April. Truckload rates in May also fell 2.6% month-over-month. As usual, Cass noted that the Linehaul Index includes both spot and contract freight, adding that the larger contract market is likely to continue heading down. But the market may be close to a bottom, Cass says, noting that “"net of grants and reinstatements, DOT [carrier] operating authorities are being revoked at a record rate of about 2,000 per month since October 2022. So, capacity is contracting at a record pace, which is key to the bottoming process." So shippers should expect rates to start heading back up sometime this year, Cass says.

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