Who knew there was such a great name as the Dunning-Kruger effect for…
Who knew there was such a great name as the Dunning-Kruger effect for the state of being ignorant of being ignorant! Can we develop a list of supply-chain related areas where this applies? I know one: the US Postal Service (USPS) has been running at a deficit for years – with, up until now, price increases capped by law at the rate of inflation. The relaxing of the law allows USPS rates to increase up to 2% above inflation. Postal-reform legislation, which among other things would have shifted retired postal workers to Medicare and changed the funding schedule for some retirement benefits, has stalled in Congress…leaving USPS $40 billion behind in funding retirement benefits. Meanwhile, the likes of Amazon are enjoying a subsidized ride for their USPS package freight.
Some short takes:
- Inventories are piling up in the UK to mitigate “Brexit Chaos”. Warehouse vacancy rates have fallen by 50% and some companies are concerned about cash flow as they tie up working capital in inventory
- Crude oil prices stay in the $58 range as Opec continues to cut its supply. This is offset by increased shale output that has jumped by nearly 300,000 barrels/ day in September
- Freight rates continue to rise – but now at an accelerated rate
