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Supply
Chain by the Numbers |
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- Aug. 17, 2023
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Where will Yellow's LTL Volume Go? US Manufacturing Flat again July; Amazon adds New Fee to Marketplace Sellers; Warehouse Space Finally Opens in the Inland Empire |
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50,000 |
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That’s about how many shipments were handled per day by now bankrupt LTL carrier Yellow, which last week closed its operations. But the bad news for Yellow and its shareholders is good for Yellow’s former LTL rivals, many of which are seeing a surge in business as they pick up the slack. The Wall Street Journal reported this week that various truckers in Yellow’s markets have seen from 2,000 to 3,000 added shipments each day - a welcome infusion in a US freight market that has been turning downward this year. Beneficiaries include ABF Freight, Old Dominion Freight Line and TForce Freight (which acquired UPS’s LTL business last year). There’s more good news for carriers. Yellow’s demise likely will also cause LTL rates to rise now with the carrier's capacity and generally low prices off the table.
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| That was the level of the US manufacturing output index for July, as released this week as usual from the Federal Reserve bank. That was basically flat with the index level of 99 reached in June, and about the same as scores just about 99 since February, not so hot, but not recessionary either. The July score was also almost flat with same period in 2022. At an index level of 99.5, it means US manufacturing is still below output in the baseline year of 2017 (index = 100) now six years later. It is also well below the all-time high of about 108, reached in late 2007. |
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3.8% |
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That was the vacancy rate for warehouse space in the distribution heavy Inland Empire near Los Angeles in Q2, up from almost zero (1.2%) in Q2 2022, according to real estate services firm Savills. That is still below the nationwide vacancy rate of 4.8% - which is also low – but means some space is actually available there. More warehouse space became available during the past quarter than was leased, the first time that has happened in the Southern California market in some 20 years, said Mark Russo, head of industrial research at Savills, on the news. What’s going on? Among the factors, a slowdown in US imports through the ports of LA and Long Beach, which feed nearby import warehouses. The port complex handled about 1.3 million fewer containers in the first six months of 2023 compared with the same period in 2022. |
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That is the fee – somewhat surprising to SCDigest – that Amazon says it is going to charge its Marketplace sellers who don’t also use its Fulfillment by Amazon (FBA) logistics service, in which it operates like a 3PL. The new fee will start to be charged in October, according to documents reviewed by Bloomberg. That’s on top of the commission — usually 15% — that merchants already pay Amazon to sell products on the its web store. Amazon’s announcement did not offer an explanation to sellers why the fee was being added, but Amazon told Bloomberg it will help cover the costs of running a separate infrastructure and measuring its effectiveness. That’s not much of an explanation either. The move now is also surprising given the US government is poised to file an antitrust lawsuit against the ecommerce giant.
