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Supply Chain by the Numbers

- Jan. 6 , 2011


Supply Chain by the Numbers for Week of Jan. 6, 2012


Ocean Carriers Under Water in 2011; E-Commerce Sales Roll On; Warehouse Space Rates' Absorbing Rise; Boeing Stresses Out its Supply Chain


$5.2 Billion

Amount of 2011 losses expected in the ocean container shipping industry, according to an estimate this week from the analysts at Drewry Shipping consultants, based on Q3 financial numbers and full year estimates. Drewry says industry fundamentals have deteriorated sharply since 2010, when carriers earned profits of about $20 billion. Yet, the carriers continue to bring on capacity. Shippers, the equation is still in your favor, though at some point the financials have to work for the carriers.




The increase in on-line sales during the 2011 holiday shopping season over 2010, according to fresh estimates from comScore, a retail analytics company. That took the total to $37.2 billion for the season. That compares to estimates for "brick & mortar" sales growth of 4%. While other groups will have slightly different numbers, there is no question that e-commerce sales continue to surge at rates that dwarf traditional store sales growth. This has major implications for the supply chain.


Expected average warehouse/DC rental cost per square foot in 2012, up from $4.23 in 2011, according to a new report from the real estate pros and Grubb & Ellis this week. (Of course, rates in individual markets vary greatly from the national average.) As we noted in an article a couple of months ago, the report reaffirmed that all of the industrial space abandoned during the recession had been "reabsorbed" by the end of the year. Grubb & Ellis says the vacancy rate for industrial space fell which fell 0.9% to 9.5% in 2011, is forecast to fall to 8.7% by the end of 2012. Thinking about new space? May be time to move while the deals can still be had.



The number of suppliers that Boeing is now subjecting to regular "stress tests," which conistently evaluate whether those vendors have the capabilities and capacities to meet Boeing's production plans. The strategy comes after Boeing's disaster with 787 Dreamliner aircraft - which was more than three years late due to supply chain snafus, and the company now enjoys a robust order book.  It has hired some 200 new engineers and supply chain managers for the role, according to an article in the Wall  Steeet Journal last week.

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