Supply Chain by the Numbers for Week of April 26, 2012
Panama Canal Authority Tolls for Thee; Manufacturers Say China Cost Estimates Too Low; Walmart was Using Some Walking Around Money in Mexico; Port of Savannah Needs to Start Dredging
Number of years it will take to deepen the Port of Savannah river and harbor from its current 42-fooot depth to 47 feet. That from a port spokesperson to SCDigest this week, after the US Corps of Engineers issued its final environmental impact and overall project assessment reports in recent weeks. The Savannah Harbor Expansion Project (SHEP) is needed to support some of the larger megaships that will want to use the port for import or export business and take advantage of the increased Panama Canal capabilities when that expansion is complete in 2014. The Savannah project, which has been studied by the Corps for an incredible 15 years, still must be approved by four Cabinet-level US departments, and see finalization of the federal government funding which accounts for 60% of what is required. Good luck.
Percentage of manufacturers that said that total costs in sourcing from China winds up being more expensive than the initial analysis on paper looks, according to new research from Boston Consulting Group. The consulting firm surveyed just over 100 US manufacturers. All had over $1 billion in annual sales. The headline news was that 37% of those companies said they either are or are strongly considering bringing some manufacturing back to the US from China. Perhaps surprisingly, the largest companies (over $10 billion) were more likely (48%) to be doing or considering reshoring than were more mid-sized firms with $1-10 billion in sales (30%).
Amount Walmart is alleged to have spent in Mexico in roughly the 2000-2005 period to bribe Mexican officials to receive expedited permit approvals for new story construction and other help that enable the retail giant to rapidly expand its Mexican operations there much more rapidly than would otherwise have been possible. That according to an article early this week in the New York Times, which spent months investigating the story. As usual, the potential problems for Walmart are probably less about the bribes themselves and more about how the company shut down an internal investigation on them and did not report the incidents to US or Mexican authorities at the time. Could be trouble for some current and former executives.
Approximate increase in tolls for passage through the Panama Canal across most “segments” starting July 1 of this year, under a proposal released this week by the canal authority. That would be followed by another toll hike of about the same magnitude in July 2013. That all ahead of expected completion of the project to deepen and widen the Canal in 2014. The proposal still has to be approved the canal authority’s board, and you can make comments on the change through mid-May before the vote, but we’re thinking this is "sailing" through. They are moving a lot of dirt down there, and someone needs to pay for it.