Supply Chain by the Numbers

- April 12, 2013

  Supply Chain by the Numbers for Week of April 12, 2013

Mexican Labor Costs Now Well Under China; How Much Should Arkansas Fork Out for New Steel Plant? Walmart Invests in Bangladesh Factory Safety; New Clean Truck Engines Are Pricy


$1.6 Million


The amount Walmart announced this week that is was giving to an organization called the Institute for Sustainable Communities (ISC), funding that will help the group start safety training programs for apparel factories in Bangladesh. You will remember there was a fatal fire in the country late last year at an apparel factory, killing 112 workers - and it turned out the factory was making clothes for Walmart stores through a sub-contract relationship. Many other factories have also had fires in the country's fast growing apparel sector.



$67 Million

The mount of funding Arkansas Gov. Mike Beebe wants to provide Big River Steel if it agrees to build a new factory in Osceola, along the Mississippi River. But the proposed subsidy, which is also generating strong opposition from forces saying the state doesn't have the money, comes at a time when there is a steel glut in the US, other steel plants in the region have closed, and the giant ThyssenKrupp mill in nearby Alabama can't find a buyer. The proposed new $1.1 billion factory would have about 500 full-time employees if and when it is completed.


Amount by which Mexican labor costs are lower today then those in China, according to a new research report from Bank of America. Then years ago, Mexican wages were 188% of Chinese ones, but Mexico's wages have stayed flat since then while China wages have risen substantially. That's having an impact on US sourcing: In the last three years, imports from Mexico have risen 32%, while imports from China are up 20%. See Rise in China Wages Now Means Labor Costs about 20% Lower in Mexico, New Study Finds.



Additional costs that carriers and private fleets will pay for new heavy duty trucks with engines that can meet new EPA emissions requirements, truck maker Navistar announced this week. The additional price for medium duty engines will be $6000 - costs that will be borne by shippers in the end. Volvo, which like most other truck manufacturers is using a different approach to reach the emissions goal versus Navistar’s technology, says its upcharge will be $9600. In both cases those prices are before sales and excise taxes that will add about another two grand to the total cost.