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Supply Chain by the Numbers
   
 

- July 11, 2013

   
  Supply Chain by the Numbers for Week of July 11, 2013
   
 

New Ocean Shipping Alliance Carries a Big Share; Walmart Battles New Washington DC Wage Law; US Retailers Partially Open Wallets for Bangladesh; Input Costs Continue More than Two-Year Decline

   
 
 
 

37%

Share of global ocean container shipping capacity controlled by the three largest carriers by total TEU capacity - Denmark's Maersk Line, Switzerland's Mediterranean Shipping Co. and France's CMA CGM. That is a number worth pondering, after the three recently announced plans for a new alliance, named P3, in which the carriers say they will begin pooling ships starting in Q2 2014. The proposed consortia will have to pass anti-trust reviews in Europe and elsewhere, and has some shippers worried it will drive rates higher and reduce service choices. (See New Ocean Carrier Mega-Alliance May Boost Rates, Causes Concern Among Shippers.)

 
 



 
 
 

$12.50

The proposed new minimum wage for large retailers in Washington DC in a bill that has been passed by city council there, far above the district’s $8.25 minimum wage for all other jobs. Why this move? Because Walmart has current plans to build its first six stores in the city, and some members of council want to ensure it pays workers a "living wage." As this legislation moves forward, Walmart wrote an op-ed in the Washington Post this week saying it will cancel three projects in the planning stage if the law goes into effect, and might even stop three other stores in the early stages of construction. The DC mayor could veto the bill, but that could be overridden.

 
 
 
 
 
$42 Million

Amount that a group of 17 North American retailers have agreed to spend over five years on activities related to factory safety in Bangladesh. The program will also make another $100 million in low cost loans available to factory owners there to make physical improvements. The move by the new Alliance for Bangladesh Worker Safety, led by Walmart and Gap stores, is a counter to a similar group of mostly European retailers and brand companies formed in May that will provide more direct support for factory improvements, and carried some legal risks that US companies were leery of. The $42 million will go for worker training, factory inspections (results fully available) and administrative fees. All this after a building collapse in Bangladesh earlier this year killed more than 1100 apparel workers.

 
 
 
 
 

24%

Drop in the Thompson Reuters/Jeffries Commodity Price Index from its recent peak in late April, 2011 through the end of Q2 in June. That index measures a basket of commodities from energy to metals to agricultural products. That consistent downward trend in input costs continued in Q2, with SCDigest's own summary numbers seeing price declines in all three commodity areas as well, led by a 12% decline in industrial metals pricing in the quarter (unweighted average). Energy costs were down 6% in our basket, though oil prices have soared in recent days resulting from fresh troubles in the Middle East. See Input and Commodity Costs Continue More than Two-Year Slide in Q2.

 
 
 
 
 
 
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