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Supply
Chain by the Numbers |
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- March 16, 2023
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Retail Sales Drop in February, as Credit Card Debt Soars; Most Supply Chain Tech Investments Disappoint; Low Forecast for eTrucks from Amazon Worries Rivian; Logistics Jobs Fall over eCommerce Slowdown |
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0.4% |
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| That was the change in US retail sales in February versus January, including restaurants and cars, as consumers pulled back after spending jumped in the prior month, with inflation perhaps starting to take a toll. That according to new data from the Commerce Department on Wednesday. The data also shows that consumer have been shifting more of their budgets toward activities and outings, where prices continue to rise. Shoppers spent about 2% less on cars and parts, and 2.2% less at restaurants and bars, the report showed. People bought less furniture, fewer clothes as well as home-improvement and gardening supplies. Spending at department stores dipped 4%. People did spend 0.6% more at grocery stores and 1.6% more on online shopping. And overall, retail spending remained 5.4% higher than it was in February 2022, but that can mostly be accounted for by higher prices, meaning unit volumes are flat or down. But also of concern, more consumer retail spending is happening on borrowed money: credit card debt — which slowed dramatically during pandemic lockdown - is now rising at one of the fastest rates in history. |
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| That is how many all-electric delivery vans Amazon is going to order this year from supplier and partner Rivian, according to Wall Street Journal late last week. That’s news because the number is at the low end of a range previously provided to Rivian. In 2019, Amazon entered into an agreement to buy 100,000 delivery vans from Rivian by 2030. But with a big slowdown in ecommerce growth, Amazon apparently doesn’t need as many e-vans as it thought. And with the new forecast, Rivian and Amazon are said to be in active discussions about ending the exclusivity provision of their delivery van deal, according to multiple media reports. However, an Amazon spokesperson told the Atlanta Journal-Constitution that “nothing has changed with our agreement with Rivian.” Meanwhile, a Rivian spokesperson declined to comment about the reported negotiations, saying “We continue to work closely together [with Amazon] and are navigating a changing economic climate, similar to many companies.” Rivian hoped to produce 50,000 vehicles this year across delivery vans and consumer trucks and SUVs. Sounds like that target is in jeopardy. |
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16,900 |
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That's how many US jobs at trucking, warehousing and parcel-delivery companies were cut in February, following a drop of 2,200 jobs in January, according to seasonally adjusted preliminary employment figures released Friday by the US Bureau of Labor Statistics. The pullback came even as the broader economy added 311,000 jobs. What's going on? The slowdown in ecommerce sales is getting some of the blame. For example, February parcel volumes were down in the estimated mid-single digits compared with a year earlier, according to ShipMatrix, which analyzes package shipping data. Overstocked retailers holding off placing new orders is also said to be impacting logistics demand and jobs. |
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That is the share of 300+ executives surveyed by the consulting company PwC that say that their supply chain technology investments have not fully delivered the expected results. The reasons, according to “PwC’s 2023 Digital Trends in Supply Chain Survey,” range from the implementation process not yet being finished and it therefore being too early yet to judge results (21%) to undefined ownership and vision (4%). However, PwC believes the failure to see expected results is not due to the technologies themselves but is the result of lack of effective planning on the part of the adopters. “Technology initiatives typically do not have a well-articulated value delivery plan, and therefore struggle to meet expectations and end up with a 'go live' being the sole marker of success,” says Matt Comte, PwC Operations Transformation Practice Leader. In spite of lack of satisfaction with existing technology adoption, companies are still pursuing new ones. Looking ahead, the technologies that will be seeing the most investment in the future are artificial intelligence and machine learning. Twenty-two percent of respondents said their companies plan to invest at least $5 million in those technologies in the next two years.
