Gauging the Economy: Supply Chain Snapshots (Part 1)

Courtesy of supply chain expert and unfortunate malware perpetrator Bob Ferrari -- Google blocked access to his site for over a month even after he solved a malware issue in a number of days -- I came across a number of useful logistics numbers that provide insight into the overall state of the manufacturing economy at the end of Q1. For those interested in digging both into technology and the broader economics of supply chain management, I can't recommend Bob's blog, Supply Chain Matters, enough. In the above-linked post, Bob highlights the financial results of DHL, Fed-Ex and logistics and 3Pl providers, suggesting these numbers can be a useful tool in gauging the economy.

Bob starts with DHL, sharing that "their volume growth continues to accelerate: Asia is strongest (up 30.3%) but Europe is weakest" with "Air freight volumes up 34%" and "Ocean Freight up 15.1%." DHL suggested this shows "Clear signs of economic recovery" -- or at least a lot of busy work and the moving of highly subsidized/government manipulated goods coming from and going to China. Moving along to Fed-Ex, Bob notes that their "International priority shipping volumes are up 18%, led by exports from Asia; U.S. domestic average daily package volume grew 1%." Ground volume was not bad either: "Average daily package volume grew 5% year-over-year, due primarily to growth in B2B markets." And LTL shipments "increased 26%" as well.

Some of the highlights from UPS' results include an "average daily shipment volumes of 14.93 million packages, up 2.6% from a year ago" and "International domestic package volume up 18%." Moreover, "export volume increased more than 9%" and "supply chain and freight businesses [were] up 14%, with strength in high tech and healthcare sectors." All in all, there are positive signs. As I examine this data, the numbers that jump out the most are overseas volumes. Granted, DHL, UPS and others are only a single proxy area for the market -- we most also look at the Baltic Dry Index to understand container pricing and demand, among other sources -- but they're useful in helping us plan for where things may go the rest of the year.

Personally, I'm not holding my full container, LTL or parcel breath that the economy will sustain the momentum that these numbers clearly show. But I certainly hope it does.

- Jason Busch

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