[#98] Supply Chain in Numbers - Oct 25, 2021
Fertilizer prices are soaring, Warehouse vacancy at 3.6%, VLSFO prices are at a record high of $600/mt, Fastenal is experiencing 58 days of the port to DC, Coca-Cola is hiring 3 bulk vessels.
Welcome to “Supply Chain in Numbers.” This newsletter tracks significant digits from the world of the supply chain. Five prominent numbers are published every Monday. If you have any feedback, please send it to me.
$996.32 per short ton
A gauge of North American fertilizer prices soared to a record high, driving up costs for farmers and threatening to worsen food inflation. The Green Markets North America Fertilizer Price Index rose 7.9% to $996.32 per short ton, soaring past its 2008 peak to set a new benchmark for the index that began in January 2002. [Bloomberg]
3.6% vacancy rate
Warehouse availability in the U.S. fell to record lows in the third quarter, according to figures from real-estate firms that show industrial space is all but disappearing near some of the country’s busiest distribution hubs. The third-quarter demand for industrial real estate exceeded supply by 41 million square feet, pushing the vacancy rate to 3.6%, down from 4.3% in the same quarter of 2020 and the lowest level in data going back to 2002. The vacancy rate for warehouses near the ports of Los Angeles and Long Beach, Calif., the gateway complex that is a major chokepoint adding to global supply-chain snarls, reached 1% in the quarter. [WSJ]
$600/mt
A benchmark price for very low sulfur maritime fuel (VLSFO) has more than tripled since April to a record level. VLSFO prices at Rotterdam have jumped above $600/mt for the first time since this indictor was launched. The lowest was $149.50/mt (4x lower than the current) in April 2020 driven by the Covid-19 pandemic and OPEC disagreements that led to a price crash. [Ship and Bunker]
58 days
Industrial components supplier Fastenal says its average transit time for deliveries from port to destination reached a company record 58 days in August. Compare this to conditions just prior to the pandemic in Q1 2020, when that number was in the 30s. The company’s CEO summarized the outlook like this — “I honestly don’t know how this is going to work its way out because a lot of capacity was taken out from the steamship lines last year and part of the issue is the capacity just isn’t there. So is this something that’s part of our new normal that we’re going to have this kind of consternation and we need to build an extra 30 or 45 days of time into the supply chain”. [Industrial Distribution]
60,000 tons of material
Coca-Cola is using three bulk vessels to ship materials, a way of “thinking outside the box (or container)” and keeping goods moving while vessel space is limited. There are three bulk vessels being loaded to keep production lines running across the world. The ships are carrying more than 60,000 tons of material, which is approximately 2,800 TEUs, and are heading to some non-congested ports to avoid delays. [SC Dive]