Supply Chain by the Numbers

- July 21 , 2011


Supply Chain by the Numbers for Week of July 21, 2011


Small Ships Heading to Dock; Consistent Upward Forecasting Bias; China Currency Up Just a Bit and That's Probably It; Manhattan Associates Rocks Q2



The amount ocean shipping capacity in terms of TEUs that has been idles just over the last few weeks, according to the analysts at Alphaliner. That change was contrary to the general direction of ocean shipping capacity, where the amount of idled capacity has consistently and dramatically fallen since early 2010, but is a reaction to the softening global trade market here in mid-2011. That 20,000 taken to dock in July is almost one-fifth of the total of 95,000 TEU of idled capacity currently in the market. But what was most interesting about this data is that the idled capacity included no ships having over 5000 TEU capacity, as ocean carrier shed less efficient smaller ships. Alphaliner notes that unless cargo volumes increase more than expected in the coming months the idle fleet will “rise progressively," good news for shippers in terms of rates even if a bad sign for the economy.




The consistent upward bias in forecast error across major consumer packaged goods companies, according to a just released study from software provider Terra Technology. Weekly forecast error remains almost 50% overall in the CPG industry, the study says, which adds that "The 5 percent bias may be indicative of the optimistic nature of marketing." And of salespersons, we might also suggest.


The increase in the value of the Chinese renminbi currency in the past 12 months since it was allowed to float more flexibly against the US dollar. That rise was in large part a reaction to pressure from the US and Europe claiming that the artificially low value of the Chinese currency relative to the dollar and Euro was a key source of trade imbalances and lost jobs due to outsourcing to China. That 5% change, however, is "not enough to correct global trade imbalances that make China's exports far cheaper than goods produced elsewhere," according to a recent commentary from the Wharton School of Business. Wharton also points out that as the renminbi rises, it reduces the value of China's $3 trillion (with a T) of US dollar holdings, meaning China is unlikely to allow it to rise much more.


 $16.3 million

Amount of software license sales that supply chain software provider Manhattan Associates closed in Q2, up from $15.5 million in the second quarter a year ago, according to the just announced results. The news is indicative of a strong overall supply chain software market even in the face of a still tepid economy, as companies look to automate processes to reduce their costs structures and invest in supply chain excellence. Manhattan's overall earnings were up substantially, and the stock price rose more than 10% on the news.