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Supply Chain by the Numbers

- Oct. 26, 2023


Supply Chain by the Numbers for October 26, 2023


US Economy Roars in Q3; Interesting Hydrogen Truck from Peterbilt; Investment in Logistics Startups is Collapsing; China May Curb Graphite Exports Key to US Battery Making



That was the annualized growth of US real Gross Domestic Product (GDP) in Q3, according to data released this week by the Commerce Department. That was higher than the consensus forecast of 4.5% and was at its fastest pace in nearly two years. It was also much stronger than the 2.1% growth seen in Q2, as the US economy continues chugging along despite many headwinds. Personal consumption expenditure spending rose at a 4% annual rate, adding 2.7 percentage points to overall growth. It reflects a summer surge in Americans' spending seen in a wide range of data. There were also strong contributions to GDP from a buildup in business inventories (which added 1.3 percentage points to the total), and government spending (which added 0.8 points).


$50 Billion

That was how much investors across the globe provided in financing to supply chain and logistics-related companies from 2018 till the end of 2022, according to the web site. But that investment is slowing down dramatically, at barely $1 billion so far this year, less than one-fifth the total raised in the same period last year. This is all in the news in part because of the failure of once much ballyhooed digital freight broker Convoy, which late last week announced it was closing its doors and laying off almost all of its remaining 500 employees, down from a peak of around 1500 a couple of years ago. That left big investors holding the bag. For example, in 2022 Convoy secured a $260 million round of new capital from investors, led by UK-based Baillie Gifford and Hercules Capital, while JPMorgan extended a $150 million line of credit to Convoy, valuing it at $3.8 billion just 18 months ago. There were also some celebrity investors, including Microsoft founder Bill Gates and Amazon founder Jeff Bezos.





That’s how many tanks to hold hydrogen that are on a prototype truck from OEM Peterbilt, on display at the American Trucking Associations annual management conference in Austin, Texas last week. The truck is not using the hydrogen to charge a battery in a truck, as some other OEMs are pursuing, notably Nikola, but rather to power an internal combustion engine, but one that is nearly zero emissions. It’s not quite zero emission, because the engine requires spark ignition, and there is a small amount of NOx produced. But such a truck could address many of the range and power issues associated with battery-powered trucks. However, there’s still a lot of work to do before a production version might be seen, a Peterbilt exec said at the show. The lack of hydrogen fueling infrastructure is also an issue.




That is how much of the graphite US battery manufacturers use in their products come from China. China dominates the market for graphite, which is used in the anode of nearly every EV battery. China is also a major player in other rare earth minerals used in EV production, including lithium. This is all news this week because China announced that starting in December it would require export permits for specialized forms of synthetic graphite and natural flake graphite. While the immediate impact of China’s actions are not yet clear, a ban on graphite exports to the US could bring battery makers for cars and trucks to their knees, and/or send battery costs much higher. The U.S does not have any active graphite mines and has few prospects to develop domestic reserves.

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