Unemployment numbers skewed by holiday season surge
The 2011 holiday season brought more than just seasonal cheer, as the U.S. economy looked to be on the road to recovery, adding 200,000 jobs to help the national unemployment rate dip to 8.5 percent.
However, analysts have tempered their expectations for 2012 thanks to some of the news that broke in the supply chain industry late last week. According to CNNMoney, more than 40,000 new jobs created at the end of last year were couriers or messengers in demand because of the peak shipping seasons.
It’s unlikely many of those jobs will become permanent.
“People are happy to get those jobs for the time they have them, but come January, they’re out looking for jobs again,” Dean Baker, the co-director of the Center for Economic and Policy Research, told CNNMoney.
“The problem is that you have a lot of reporters touting this as a really strong report, and if that creates a view among policy makers that the economy is on the mend, then that undermines the need to do anything.”
SEE OTHER TOP STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK
UPS, for example, hired 55,000 temporary workers to help manage the stressful holiday season supply chain. According to the CNN’s report, however, “many of those jobs have already evaporated.”
According to Kara Ross, spokeswoman for UPS, many of the temporary new hires were drivers, truck loaders and unloaders and driver helpers. But will those new hires keep their positions deep in 2012?
“It just depends on our volume loads,” Ross said. “Some of them we might keep on; some of them we might not.”
UPS competitor FedEx faces a similar dilemma, according to spokeswoman Carla Boyd. According to Boyd, the Memphis-based logistics company hired 20,000 seasonal workers for the holiday season, an increase of 17,000 compared to 2010.
“There’s an incredible holiday surge,” Boyd told CNNMoney. “We had our busiest day in history on Dec. 12.”
Given the skepticism of many in the economy, however, the economy faces an uphill battle to continue the holiday season surge in 2012.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany