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Supply
Chain by the Numbers |
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- Aug. 24, 2023
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Atlanta Fed sees Hot US Economy; Freight Tonnage Falls again in July; Amazon Shipping is Back; Yellow Freight's Network Up for Bid |
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5.8% |
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That was the new estimate last week for Q3 US GDP growth from the Atlanta Fed's GDPNow weekly forecast. That was up from 5.0% previously. If the 5.8% GDP growth number held, it would mark the most robust period of economic growth since the fourth quarter of 2021. The upbeat estimate came after recent jobs data showed the economy is still adding workers while unemployment remains historically low and monthly wage growth has begun to outpace inflation, providing a potential boost for consumer spending growth. The growth has become so robust to the upside that some economists are now beginning to question if the positive data could be detrimental to recent improvements on the inflation front. All that after GDP came in at a 2.4% clip in the second quarter and 2% in the first quarter.
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| That apparently was the offer last week from LTL carrier Old Dominion Freight Line to purchase newly bankrupt Yellow Freight’s North American terminal network, according to reports. The Wall Street Journal reported that Old Dominion’s bid comes in nearly $200 million more than a bid submitted by another LTL carrier Estes Express Lines and could trigger a potential court-supervised auction. The winner will get a network of 169 trucking terminals and Yellow would get more than the needed money to pay off loans brought on before filing chapter 11. Yellow, which has 180 days to entertain higher bids for its real estate assets, also plans to sell its thousands of tractors and trailers. The acquisition of the Yellow network could also greatly increase the size of thee winning carrier. |
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11% |
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That is the share of UPS’ annual revenue coming from Amazon, based on the most recent annual data. That is in the news because based on report from the Associated Press last Friday, Amazon Shipping is back. The service offers its Marketplace sellers an alternative to other major parcel carriers. Amazon was testing the service four years ago, but scuttled the strategy in 2020, when the pandemic sent ecommerce volumes soaring, straining Amazon resources to handle its own volumes, let alone those of its third-party sellers. It’s a different story in 2023, with ecommerce volumes at Amazon flat. Amazon Shipping is designed for its Marketplace sellers who have chosen not to use its Fulfillment by Amazon (FBA) service, which holds a supplier’s inventory and then manages the pick, pack and ship process as well as last mile fulfillment. For that shipping, Amazon uses own Delivery Service Partner (DSP) network but also other carriers such as UPS. With Amazon Shipping, sellers still do their own order picking and packing, but handoff to Amazon for the parcel shipping. |
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That was the decline in seasonally-adjust truck tonnage in July compared with the same month in 2022. That according to the monthly Freight Tonnage Index this week from the American Trucking Associations. That also marked the fifth consecutive year-over-year decline and an indication that softness in the freight market persists. “Headwinds for freight remained in July, pushing the truck tonnage index lower,” ATA Chief Economist Bob Costello said in a news release. The index also slipped 3.1% when compared with June, when it measured 116.5. That compares to the baseline year (index = 100) of 2015. “As has been the case for several months, a multitude of factors have caused a recession in freight, including sluggish spending on goods by households as consumers traveled more and went to concerts this summer,” Costello added.
