Trucking Cost Analysis 2014

There’s no essential change in the cost of trucking, despite fuel price decreases. ATRI has a new report that indicates other cost increases overwhelm fuel reductions.  Trucking is a difficult business and shippers won’t see any savings due to the fuel price declines.

Fuel Dip “Savings” Offset By Surge in Costs for Drivers, Equipment, and Healthcare – Supply Chain 24/7.

Here is the study from ATRI.   ATRI_Operational_Costs_of_Trucking_2014

Let us know what you think.

Is US manufacturing on the upswing?

We hear a lot of talk about the US manufacturing climate improving due to reshoring and to new technological developments.  But is it really true? What’s the evidence?  Is it any more than anecdotal, the story of one or two manufacturers coming back?

This article from the Information Technology Innovation Foundation says that there is little economic evidence.

2015-myth-american-manufacturing-renaissance

Since 2008 jobs are down, and so is the GDP from manufacturing.  Here’s a short review of the report.  http://www.scdigest.com/ontarget/15-01-15-2.php?cid=8881

While it may be true that those numbers would be much worse if conditions were not slightly better, it hardly presages a renaissance.  So complacency about manufacturing, like complacency about transportation, is unjustified.  We need to work harder to improve conditions for those industries.

Penske Logistics Asks U.S. Supreme Court to Overturn Adverse Ruling Over Truck Driver Rules

There’s a difference between California Truck driver rules and the national ones. Penske, a major trucking provider, is suing to get the rules regularized.  It has to do with length and timing of breaks for drivers.

Penske Logistics Asks U.S. Supreme Court to Overturn Adverse Ruling Over Truck Driver Rules.

Lakes rise to defend U.S. build requirement

Congress is considering a change to the Jones Act to relax the US build requirement.  Great Lakes shipping industtry participants don’t want to see this!

Lakes rise to defend U.S. build requirement of Jones Act | Jan 15, 2015 | AJOT.com.

Many US businesses support Great Lakes shipping.  John McCain, who lives in Arizona, is behind the change.  And the Jones Act also requires US built and manned ships to ply our Great lakes waters.  The interests in the story raise the spectre of foreign flag and foreign manned ships delivering local cargoes in our inland rivers as well as the lakes themselves.

Risk in supply chains?

PropertyCasualty360 blog has published a short article by Eric Jones, their SVP, on assessing risk in global supply chains.

Among the interesting results of their survey: the Midwest US ranks 10th in the world in resilience (good ability to respond to risky situations). The US as a whole does not fare too well on the world scene.  But it is considerably better than some other countries.

What is the most crucial goal for supply chains? | PropertyCasualty360.

One of the article’s problems is that it deals only with risks that are kind of insurable. That’s natural, being an insurance company blog.  There are other risks, however.

While I was writing this I thought of a type of risk seldom measured.  Suppose supplier A makes a component for you, and needs capital equipment from company C, such as a very expensive chip making machine.  Now a disaster takes out the supply pf parts from company C, and company A’s machine suddenly needs one of these parts.  company A is down, and your source of supply is disrupted.  But since the spare part for the machine is not part of your bill of materials, company C is not really on your radar as a related supplier. You could not exercise that wide a degree of foresight. Yet you are down, just a surely as if Supplier C was on your radar.

This suggests a flaw in the approach of assessing all suppliers’ capabilities in your supply chain. How far afield can you go in the areas of non-operating capital or equipment or MRO inventory?  Essentially the whole world might be involved!  Perhaps we need some simpler framework.