Supply chain issues account for 50% inflation
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Good morning. Not only is it Friday - but it’s also National Bring Your Dog To Work Day. A.K.A… the best day of the year. 🐶
Inflation is bringing American consumers to their knees. But what is the root cause of the issue? Approximately half of the inflation concerns are spurred by supply constraints, mainly accredited to war in Eastern Europe. The PCE price index rose 6.6% in March since the previous year, making it the most significant leap since 1982.
Check out today’s featured article from Supply Chain Brain for details on the supply constraints created by Russia’s invasion of Ukraine and what it may mean for months to come. ☕️
Toilet Paper Money GIF By Petter Pentilä via GIPHY
Featured Article:
Supply Issues Account for Half of Surge in U.S. Inflation, Study Says | Supply Chain Brain
“Supply constraints, exacerbated by Russia’s war in Ukraine this year, account for about half of the surge in U.S. inflation, with demand currently making up a third of the increase, according to new research from the Federal Reserve Bank of San Francisco.”
Water Cooler Topics
🌎 The clean energy tech market is foaming at the mouth over the UN Climate summit’s decision to further regulate GHG emissions. Companies across the transportation industry are searching to create a “Net Zero” supply chain and investing in heavy-duty technology to make it a reality. McKinsey is estimating that $9.2 trillion in annual average spending on physical assets will be needed to achieve a global transformation to net-zero carbon supply chains. All before the year 2050.
👕 Apparel company Abercrombie & Fitch's Q1 freight costs were over $15 million more than what was predicted. Unpredictable rising rates and shipping issues along with supply chain disruptions are leading the list of reasons for this far-off projection. CFO Scott Lipesky has advised that the company will mitigate these issues going forward by assuming longer lead times and reducing its dependence on air freight.
⛽️ Some economists aren’t celebrating Biden’s proposal to halt federal gas taxes for three months. American Trucking Associations President and CEO Chris Spear spoke up, encouraging Congress to focus on lowering energy prices instead. As it currently stands, a 90-day federal tax break would lower diesel costs by a maximum of 60 cents a gallon and gasoline by 50 cents.
Tariffs imposed on imports can have unpredictable results
Very few countries can singularly focus on domestic industries. Our global economy requires interactive operations. However, when tariffs/duties are imposed on a country or specific imports, the goal is using to stimulate domestic production. Local businesses and industries can capitalize on this move and can properly compete with foreign prices.
But do tariffs do more harm than good? Experts are weighing in - it all depends on the situation.
AI-operated cab-less trucks are hitting the road after NHTSA approval
The National Highway Traffic Safety Administration (NHTSA) approved the operation of autonomous vehicle technology created by the Swedish freight tech company Einride. Public roadways in the U.S. may start seeing cab-less vehicles in commercialization use during the late summer months of 2022.
While some fear this will lead to a loss of jobs, Einride claims the opposite. They announced a pilot program, hoping to revolutionize transportation and create thousands of new jobs.
Business Strategy 💡
Driving Growth Through Increased Efficiency in the Last-Mile | Logistics Viewpoints
“As retailers across the U.S. struggle with disrupted supply chains and volatile economic markets, returning a profit has become more challenging.”
Supply Chain Graphic of the Week: Segmenting Parcel and Last Mile Delivery | SC Digest
“CSCMP and partners Kearney and Penske Logistics are fresh out this week with the Annual State of Logistics Report for 2022, and as always it's packed with information.”
‘Mongoose Method’ Helps Carriers Fight ‘Reptile Theory’ Attorney Tactics | TT News
“For more than a decade, plaintiff attorneys have been beating up on truckers in accident litigation using a courtroom strategy known as the ‘reptile theory,’ which aims to manipulate jurors’ fears and emotional responses to elicit multimillion-dollar ‘nuclear’ jury verdicts.”
Slow supplier onboarding 'hurting procurement's reputation' | Supply Chain Digital
“Manual ESG due diligence is slowing supplier onboarding processes, says Graphite Connect European Advisor of Business Development, Elvire Boinet-Bondon".”
Trade & Border Issues 🗺
Thinking of exiting China? Think twice | Supply Chain Management
“China’s potential sphere of influence accounts for over half the world’s population. Exiting China potentially puts those areas off-limits.”
Shipping Costs Soar as Russian Fallout Upends Global Fuel Flows | Supply Chain Brain
“The dislocation of global fuel markets after Russia’s invasion of Ukraine has boosted the cost of shipping products such as diesel by sea.”
Shipping costs soar as Russian fallout upends fuel flows | AJOT
“The dislocation of global fuel markets after Russia’s invasion of Ukraine has boosted the cost of shipping products such as diesel by sea.”
Germany declares gas crisis as Russia cuts supplies to Europe | CNN Business
“Europe's biggest economy is now officially running short of natural gas and is escalating a crisis plan to preserve supplies as Russia turns off the taps.”
Safety 🦺
Increase in containers overboard sees industry boost research into losses | Loadstar
“Shippers have welcomed the World Shipping Council (WSC)’s move to increase its carrier surveys on container losses to annual events rather than tri-annual surveys.”
Shortages 🛒
“Less than four months ago, copper was setting record prices and experts were forecasting long-term supply gaps due to a collision between the growing demand for copper in clean-power technologies and the cost and difficulties of developing new mines.”
Troubleshoot the tech shortage with area schools | Fleet Maintenance
“You need more service technicians. If not today, you will need them soon.”
Trucker’s Lounge 🧢
Trevor Milton Indicted on New Fraud Charge | TT News
“Nikola Corp. founder Trevor Milton, who is scheduled to go on trial next month on charges he misled investors about the company’s business prospects, was indicted for allegedly defrauding the previous owner of his Utah ranch, which Milton used as collateral for his bail.”
Maintenance & Repair 🧰
“The Jacksonville Port Authority (JAXPORT) announced today the completion of the final phase of $100 million in berth enhancements at the SSA Jacksonville Container Terminal (JCT) at Blount Island.”
“Governor Kay Ivey joined leaders of Farpoint Development and the Macon County Economic Development Authority at a Wednesday event to mark the launch of an ambitious project to build the Regional East Alabama Logistics (REAL) Park, which aims to supercharge economic growth in the Tuskegee region.”
Leadership 🏆
EU Parliament Votes to Include Shipping in EU Carbon Market | G Captain
“The EU Parliament has voted in favour of including shipping in its carbon market, adding pressure for the industry to accelerate its decarbonization.”
FedEx Faces Big Changes as New Boss Confronts Higher Costs, Angry Contractors | Supply Chain Brain
“FedEx Corp.’s new chief executive officer, Raj Subramaniam, had plenty to contend with when he took over from package-delivery legend Fred Smith this month.”
“Could be better” | Seth’s blog
“Three words that open the door for insight, understanding and improvement.”
Tech 📟
Peak Technologies continues its consolidation tear through AIDC sector | Supply Chain Brain
“Private equity-backed systems integrator buys up 7th and 8th firms since 2021, extending its reach into Europe.”
Fuel ⛽️
Is there a chance the national gasoline tax is going to take a break? | Logistics Management
“Now, there is talk about President Biden “considering a gas tax holiday to ease high fuel prices,” through the end of September, according to a New York Times report published this week.”
EXPLAINER: How Biden’s proposed gas tax holiday would work | The Trucker
“Facing stubbornly high gas prices that average about $5 a gallon nationwide, President Joe Biden on Wednesday urged Congress to suspend federal gasoline and diesel taxes for three months.”
Gas prices sting US workers who depend on their cars | AP News
“Reid, who drives for Uber and Lyft in New York, fills up his Lexus at least three times a week.”
Industry Forecast 📊
“That is about what it costs to ship a 40-foot container from China to the US West Coast, according to the most recent Freightos Baltic Index.”
DAT May Truckload Volume index sees some declines in May | Logistics MGMT
“May’s TVI dry van freight reading—at 256—was down 3.7% compared to April (April was down 10% compared to May), with the refrigerated TVI—at 190—also down 3.7%, and the flatbed TVI—at 240—rose 4.8%, for the same period.”
TMS 💻
Suppliers set sights on enhancing tractor-trailer connectivity | Fleet Owner
“Today’s fleets require increased asset visibility, ease of software integration, and the knowledge that their units are operating safely as one.”
Electric Vehicles 🔋
Elon Musk Says New Tesla Plants Are Losing Billions | TT News
“Elon Musk said Tesla Inc.’s new plants in Germany and Texas are losing “billions of dollars” as the electric vehicle maker tries to ramp up production.”
Intertrust, Clean Fuels Ohio Collaborate on EV Charging Station Infrastructure | NGT News
“Intertrust, a provider of distributed computing technologies, and Clean Fuels Ohio, a nonprofit and the designated Clean Cities Coalition for the state of Ohio, have entered into a partnership to use Intertrust’s CleanGrid energy data toolkit to orchestrate the data needed to plan the development of electric vehicle (EV) charging infrastructure along Interstate 80 in Ohio.”
“The Biden administration turned to Tesla for help with renewable fuel policy reform: Reuters.”
Fuel Tech ♻️
Things That Go Poof in the Night | Trucking Info
“ACT Expo 2022 really opened my eyes to the potential and pitfalls of the future of fossil-fuel-free transportation.”
