It was an interesting year in supply chain in 2024. Key themes and trends include a lukewarm economy with mixed signals, with that continued sluggish freight volumes, and the strange scenario of so-called Hoothi rebels in Yemen attacking cargo ships, causing carriers to divert routes from the Suez Canal around Africa, sending rates soaring.
We can't stop this?
Here, my choices for the top or most interesting chain story by month in 2024. I's all have room for here. I will have a much longer list next week in our OnTarget newsletter.
Gilmore Says.... |
 |
There were many other important stories in 2024 - what did I leave out?
|
 |
What do you say? |
|
| Click here to send us your comments |
| |
|
|
|
January
UPS announces it will reducing its overall employee head count by 12,000 workers, which the company says will save more than $1 billion, citing higher labor costs and softening demand parcel shipping. It also says it will sell off its Coyote Logistics freight brokerage business, which it later does in June to RXO. USP parcel deliveries, fresh off a new contract in 2023, are spared any layoff, UPS says.
February
The Wall Street Journal publishes a report on the woeful state of US ship building, with almost 50% of commercial ship building was done in China in 2023, far outpacing number 2 South Korea and number 3 Japan. Western countries are hardly in the fight, with all of Europe producing just 5% of ships and the US barely enough to register. This state of affairs is has geo-political and military implications, beyond the economic and logistics ones.
March
On March 26, a cargo ship hits the Francis Scott Key bridfe near the Port of Baltimore, causing it to collapse almost instantaneously, killing three people and closing the port for many weeks. The ship’s crew issued a mayday call moments before the crash took down the bridge, enabling authorities to limit vehicle traffic on the span. The port, a key link in imports of automobiles from Europe, was immediately closed, not fully reopening until June 12th. The accident happened when the ship lost power and thus control, veering off course into the bridge.
April
After losing two high profile unionization campaigns in the past decade at a VW assembly plant near Chattanooga, TN, the United Autoworkers won a decisive victory to organize the factory, making it the first auto foreign-owned plant in the US to organize. But the euphoria doesn’t last long, as the UAW lost a vote in May (56% to 44%) at a Mercedes factory in Alabama. UAW membership fell 3.3% in 2023 to 370,000, its lowest point since 2009, according to US Labor Department data. In 1970, the union had 1.5 million members.
May
Gartner releases its top 25 Supply Chains for 2024, with Schneider Electric taking the top spot for the second straight year – sort of. I put it that way because again in 2024, Apple, Procter & Gamble, Amazon, and Unilever were left off the formal top 25, as those four companies have been placed in a separate relatively category called "Supply Chain Masters," a sort of supply chain hall of fame. With Amazon, Apple, P&G, and Unilever withdrawn from the competition, the rest of the top 5 after Schneider Electric were: (2) Cisco; (3) Colgate-Palmolive; (4) Microsoft; and (5) Johnson & Johnson.
June
CSCMP and partner Kearney release the 2024 State of Logistics Report, with the headline news that US Business Logistics Costs (USBLC) actually fell on an absolute basis in 2023 to $2.37 trillion, down from $2.6 trillion in 2022, for a drop of 11.2%. That was after an increase of a huge 25.3% in 2022. Among the other many data points, trucking-related spend (including private fleets but excluding parcel) comprised 62.2% of total transport costs and 39.2% of total logistics spend, down from 42.9% in 2022.
July
The Federal Aviation Administration cleared Wing and Zipline International to fly their drones simultaneously over the suburbs of Dallas and Fort Worth, Texas, without visual observers, using technology to manage traffic and keep the drones apart. The agency expects initial flights using the drone-traffic system to begin in August and that it will issue approvals to additional companies in the near future.
August
Walmart announced a series of moves that extends it logistics capabilities and infrastructure outside the company. That includes a new offering that will provide fulfillment services from its large DC network for virtually any retailer, not just those selling on Walmart’s Marketplace service. Those services, putting Walmart clearly in the 3PL arena, are end-to-end, including storage, pick/pack/ship, and returns processing. The new offering, called Walmart Fulfillment Services (WFS), is slated to start doing business September 10.
September
Amazon announced it was raising pay for all fulfillment center workers by at least $1.50 per hour, taking minimum wages to over $22.00. The raises will take effect almost immediately. In addition, starting next year, all FC employees will receive membership in Prime, Amazon’s fast shipping and video subscription service. All this of course will put tremendous pressure on other distribution operations nearby Amazon facilities.
October
International Longshoremen’s Association (ILA) union and the US Maritime Alliance (USMX), which represents East and Gulf Coast port operators, reached an agreement to end a two-day strike. But the end of the three-month contract extension is coming soon again in January, with port automation said the be the huge issue.
November
Donald Trump re-wins the presidency, bringing many likely impacts to supply chain, notably on promised tariffs on US imports, energy policy (drill baby, drill), and programs/regulations that push electric vehicle adoption.
December
FedEx announces plans to spin off its LTL division into a separately publicly traded company sometime in 2026. FedEx is the largest US LTL carrier by revenue. FedEx positioned the move as good for shareholders, which have seen FedEx’s stock in the doldrums for several years.
Hope you enjoyed this. Again, look for a more complete list next week in our OnTarget newsletter.
Any other top supply chain stories in 2024? Let us know your thoughts at the Feedback section below.
Your Comments/Feedback
|
