GM's Credit Boost 💰
Good morning! Welcome to "The Workday Dash," your trusted source for the latest updates and insights in the world of supply chain and logistics. As we embrace World Smile Day on October 6th, we're reminded of the power of positivity in the face of daily challenges. In this edition, we'll explore how the logistics industry continues to innovate and adapt, aiming to bring smiles to the faces of both professionals and consumers alike.
So, let's dive in and discover the reasons to smile in the world of supply chain and logistics. 😄😊
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GM Secures $6 Billion Credit Line Amidst UAW Strike Costs Soaring to $200 Million
General Motors (GM) has secured a $6 billion line of credit in anticipation of further strikes by the United Auto Workers (UAW) union. CFO Paul Jacobson cited concerns over messages from UAW leadership indicating the potential for prolonged strikes. GM has already incurred a $200 million cost in the third quarter due to lost production resulting from UAW strikes, primarily the initial strike at the Wentzville, Missouri plant, which has since expanded to other GM facilities.
GM CEO Mary Barra and Ford CEO Jim Farley have criticized UAW President Shawn Fain and the union's strike strategy, accusing them of not genuinely seeking agreements for the 146,000 workers at GM, Ford, and Stellantis. GM's new credit line stipulates that the company must maintain at least $4 billion in global liquidity and $2 billion in U.S. liquidity. This move follows Ford's securing of a $4 billion line of credit to address market uncertainties.
Check out today’s featured article from CNBC to read more about the multi-billion dollar credit line that General Motors just acquired. Will they have to resort to using the billions of dollars if this strike continues? Or will they find a way to resolve this strike before it gets too out of hand?
Featured Article
GM secures new $6 billion credit line as UAW strike costs reach $200 million | CNBC
“General Motors secured a new $6 billion line of credit as the automaker braces for additional strikes by the United Auto Workers union.”
Amazon & Inflation
Amazon Accused of Employing Covert Algorithm to Raise Prices, Say U.S. Regulators
Amazon reportedly used an algorithm called "Project Nessie" to assess its ability to increase prices in a way that would prompt competitors to do the same, boosting Amazon's profit margins across product categories. This led competitors to raise their prices or have Amazon automatically restore product prices to their original levels.
Project Nessie also allowed Amazon to match discounted prices from major competitors and maintain lower prices after rival sales ended. Amazon responded to allegations by stating that the FTC's portrayal of Project Nessie was inaccurate, emphasizing its goal to prevent unsustainable price reductions. Amazon noted that the project ran briefly on some products but did not achieve its intended goals and was discontinued years ago.
The FTC has not commented on the redacted content within the complaint.
Peak Season & Deliveries
Last-Mile Carriers Ready for Peak Season
After facing challenges earlier this year, last-mile carriers have rebounded and are better prepared to handle peak season demand, according to a report by project44. While on-time performance typically dips during peak season, carriers are now well-equipped to navigate the increased volume and potential weather disruptions. The report notes that the capacity needed to handle peak volumes is readily available, and shippers have diversified their carrier options to ensure timely deliveries to customers.
This year's peak season is especially crucial for carriers as they seek to attract and retain more volume in a market that has shifted in favor of shippers. Providing strong on-time performance will be a key factor in achieving this goal. Shippers have expanded their carrier choices beyond traditional options like FedEx and UPS since the pandemic strained capacity levels. On average, shippers utilized 6.1 carriers in the last-mile delivery process in August, a trend expected to continue throughout the peak season, driven in part by the diversification of carriers and resolved UPS labor negotiations.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
🇸🇬 Record High COE Prices Make Car Ownership in Singapore a Luxury. In Singapore, owning a car has become even more extravagant due to soaring Certificate of Entitlement (COE) prices. The 10-year COE, necessary to purchase a vehicle, has reached an unprecedented $76,000, which is four times the 2020 cost. This steep expense, along with other associated costs, makes car ownership impractical for most residents, given the city-state's quota system aimed at controlling traffic and emissions, with a median monthly household income of $7,376 in 2022.
🏆 Lynn Fritz, CEO of Fritz Companies, Honored in Supply Chain Hall of Fame. Lynn Fritz, Chairman and CEO of Fritz Companies, has received the 2023 Supply Chain Hall of Fame Inductee award from the Council of Supply Chain Management Professionals (CSCMP). This prestigious recognition acknowledges individuals who have made substantial contributions to the supply chain management field and served as role models. During his 30-year tenure at Fritz Companies, Lynn Fritz played a pivotal role in advancing third-party logistics and supply chain services, expanding the company's global presence to 120 countries with 11,000 employees and achieving Fortune 1000 status in 1997. His innovative approach and incorporation of technology have left a lasting impact on the logistics industry.
🛳 South Carolina Ports Authority Records 9% Drop in Cargo Volumes for August. The South Carolina Ports Authority reported a 9% year-on-year decline in cargo volumes for August, totaling 203,169 TEUs. This decrease is attributed to expectations of a slower peak season in the U.S. port industry, driven by reduced consumer demand and a more cautious domestic economy. Nevertheless, the Port of Charleston experienced a surge in its vehicle segment, recording a 9% year-over-year increase with 17,876 vehicles handled in August.
iLevel With You 🏡
More topics for the average American household to consider…
📈 Ford's Q3 2023 U.S. Auto Sales Soar with F-Series and EVs Lead the Way. In the third quarter of 2023, Ford Motor reported a substantial 7.8% increase in U.S. auto sales, driven by strong demand for crossover SUVs and pickup trucks. The F-Series, in particular, stood out with a 13.4% year-over-year sales surge, totaling 190,477 trucks. Ford's electric vehicle (EV) sales also saw a significant uptick, rising by 14.8% year-over-year, with the Mustang Mach-E experiencing exceptional growth, witnessing a 42.5% increase in sales and an impressive 153% increase from August to September 2023.
💨 Maritime Industry Adopts Wind Power Innovations. The maritime industry is increasingly turning to wind power as an eco-friendly alternative for its vessels. Cargill's new vessel, Pyxis Ocean, employs "wing turbines" to partially harness wind power, reducing daily fuel consumption by 3 tons and cutting emissions significantly. Additionally, Airseas, a French company, has developed a kite-like system that, when flown at 1,000 feet, has the potential to save up to 40% on fuel consumption for commercial shipping vessels.
🧑🏽⚖️ House Republicans Demand Answers on Delayed Small Business Tax Credit Claims Processing. House Republicans are pressing the IRS for answers regarding the delay in processing new claims for the pandemic-era small business tax credit known as the employee retention credit (ERC). Lawmakers are concerned about the backlog of unprocessed ERC claims, particularly those filed incorrectly due to bad advice from specialist firms. They have requested updates on the backlog, improvements in processing times, and enhanced measures to identify fraudulent claims. As of September 27, around 779,000 Forms 941-X used to amend quarterly federal tax returns remained unprocessed, but the actual ERC claim backlog may be higher, especially considering professional employer organizations (PEOs) representing multiple small businesses.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🚛 Strong Surge in Class 8 Truck Orders in September Signals Market Resilience. In September, Class 8 truck orders saw significant increases, with ACT Research reporting 36,800 units, a 67% month-over-month surge, marking the strongest order month in a year. FTR's data also showed a surge, with Class 8 orders for September reaching 31,200 units, a 94% increase compared to August. While there was a year-over-year decrease, this was expected due to the opening of build slots for 2024 production, and the market is normalizing after exceptionally high order volumes last year, with total Class 8 orders reaching 270,000 units over the past 12 months, according to FTR.
🪧 Temporary Workers' Struggles Highlight UAW's Push for Equity in the Auto Industry. Rhonda Naus, who began as a temporary worker inspecting Jeep Wranglers at Stellantis, expected her role to become permanent with better pay. However, six years later, she remains a temporary worker with lower wages than her permanent colleagues. This situation is part of a broader movement within the United Auto Workers (UAW) to demand higher pay, improved benefits, and the elimination of the multi-tier wage system. The use of temporary workers has become increasingly common in various industries, including automotive, as a way to cover absent full-time employees and manage production surges.
🇺🇸 U.S. Department of Transportation Forges Ahead with Mandatory AEB Systems for Heavy Trucks. Despite opposition from truckers and numerous negative comments, the U.S. Department of Transportation (DOT) is moving forward with its plan to mandate automatic emergency braking (AEB) systems on heavy trucks. The DOT's aim is to release a final rule by April 30, making this a regulatory priority. The proposed rule, jointly developed by the National Highway Traffic Safety Administration (NHTSA) and Federal Motor Carrier Safety Administration (FMCSA), requires AEB and electronic stability control systems on new vehicles over 10,000 pounds, with different compliance timelines for various vehicle classes. However, it does not mandate retrofitting existing heavy vehicles with AEB technology.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 22, 2024, from iLevel Logistics Inc.