Supply Chain by the Numbers

- May 2, 2014 -

  Supply Chain by the Numbers for Week of May 2, 2014

Amazon Looking at Running its Own Parcel Trucks; Motorola Exiting Wireless and Scanning Business in Sale to Zebra - Wow; Walmart Continues to Roll Out Supplier Sustainability Index; US Driver Shortage Continues



Amount by which shipping costs rose in Q1 at Amazon, versus revenue growth of 23%, according to its recent earnings release. That of course means that such shipping costs are rising faster than sales - which has happened at Amazon every year since 2009, a key reason the on-line giant has struggled to be profitable despite soaring sales volumes. As a potential response, news this week that Amazon is piloting use of its own parcel delivery trucks in three US markets (New York City, Los Angeles, and San Francisco) not just for grocery deliveries but general merchandise - and may even compete directly with UPS and FedEx down the road.




$3.45 Billion

Amount that bar code printer and media provider Zebra Technologies is paying to acquire the wireless and scanner business of Motorola Solutions, which will now focus just on radio systems and other gear for governments and safety organizations after the sale. In what is one of the biggest deals in the supply chain hardware sector in recent years, Zebra will take on a business with $2.5 billion in 2013 sales that is 2.5 times its own revenues of about $1 billion. It will seem a bit odd when market leader Motorola’s brand leaves the industry, where it has held the top spot since it acquired Symbol Technologies in 2006.



The percent of truckload carrier Covenant Transport's tractor fleet of 2,652 units that was idle in Q1 due to a lack of drivers - some 150 units. That according to the carrier's Q1 earnings report, with that metric up from 4.4% in Q1 2013. That is some strong evidence that the long-predicted driver shortage might really be close to here in a big way. So while US truckload carriers have maintained asset discipline for some time now to keep the supply-demand balance in the carrier's favor, the temptation to add to that capacity is mitigated by the fact the carriers just can’t find drivers to fill additional seats. More drivers by far are currently leaving the industry than coming in, a variety of data sources say, even as freight volumes are growing.



Number of product categories for which Walmart is now using its Sustainability Index with its suppliers, according to its just released Global Responsibility Report for 2014. That index, really first launched in 2012 for just 18 categories, assesses a given supplier’s current status and opportunities for improved sustainability, in everything from packaging materials to transportation. Soon after, Walmart started to grade its buyers in part on how well they are using the index in making supplier selections. Walmart’s report also said the retail giant has started asking some suppliers what chemicals they use in their product and packaging designs, and will pressure them to make changes when more Green alternatives are available.