Today’s pickup: the signs of supply chain inflation are popping up all over the place

Photo: Shutterstock

Good day,

The anecdotal evidence of creeping inflation keeps coming through in news story after news story. It’s freight; it’s tariffs; it’s labor costs. In the past 24 hours, these stories all popped up. In Arkansas, three companies that make tire cords–Bekaert Corp., Kiswire America and Tokusen USA–are seeking exclusion from the tariffs on the steel wire rod that is the intermediate product used to make tire cords. Specifically, they say they can’t get grade 1078 wire rod that they say is needed to make the tire cords. A coalition of U.S.-based manufacturers of wire rod is pushing back. Next up, the biggest maker of recreational vehicles is blaming steel tariffs as the reason for higher costs and weaker earnings. Bob Martin, the company’s CEO, said in a statement Wednesday that while labor costs during the fiscal third quarter moderated, “we are experiencing inflationary price increases in certain raw material and commodity based components due in large part to the headwinds created by the announcement and implementation of the steel and aluminum tariffs and other regulatory actions, as well as higher warranty costs.” Finally, that peanut butter and jelly sandwich you like to have at lunch may be getting more expensive because of transportation costs. Smucker’s cited higher transport costs–but not solely that–in saying it would need to raise consumer prices.

Did you know?

After taking a significant downturn in recent years, the movement of petroleum and petroleum products on railcars is growing again, possibly driven by the wider Brent-WTI spread. In the latest weekly report of U.S. rail traffic, the number of cars moving petroleum was up 17.7% from last year, by far the biggest gainer year-on-year. Coal, by contrast, was down 7.7%.


“I still believe there are a significant number of trucks on the road that don’t have e-logging capabilities. This is based on the people we talk to every day.”

Ken Evans, the CEO of Konexial

In other news:

Smuckers raises prices, and transportation is cited

It isn’t the only reason, but it’s a big one (Wall Street Journal)

Infrastructure bill gets past Senate committee

It authorizes significant spending on a wide variety of projects. (LandLine)

A cooperative arrangement in the telematics and insurance fields

Omnitracs aligns with Verisk (CCJ Journal)

Daseke acquires a Canadian company

The aggregator of flatbed haulers chalks up another acquisition (Truck News)

U.S. dockworkers reach agreement on a contract

The deal needs ratification, but would span six years for the U.S. East Coast and Gulf Coast (Loadstar)

Final Thoughts

I chaired a panel in an earlier life that had as a panelist Daniel Nadler, the founder and CEO of Kensho, an artificial intelligence company recently acquired by S&P Global. Two things about his appearance that day. First, this brilliant Harvard PhD in his mid 30’s dressed in what I would call high-class pajamas. (S&P Global has since paid more than $500 million for Kensho, so presumably he can upgrade his wardrobe). Second, he noted that while his system was brilliant and fantastic, it would only be as good as the data requests given to it. For example, he said, you could ask it to look at the relationship between the price of Apple stock and the public speeches of the finance minister of Norway. But let’s face it: those two things are not related. I thought of that story and how it relates to some of the data coming out of telematics suppliers like Zonar. Earlier this week, Freightwaves’ Chad Prevost wrote that Zonar’s data showed that the two most dangerous days of the year for truckers are October 11 and June 7, which was yesterday. It also revealed where in particular those greater occurrence of accidents was likely to happen those days. Maybe it doesn’t mean anything; maybe it’s Norway and Apple stock. After all, out of 365 days, two of them must be the worst. But for example, some of the data on October 11 shows a very bad stretch of road in Colorado, with an abnormally high number of accidents. It all comes back to what you do with the data. Good data scientists will be able to mine data for those patterns, and the entire industry will benefit as a result.

Hammer down everyone!


Show More

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.