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Supply Chain by the Numbers

- June 18, 2014 -

  Supply Chain by the Numbers for Week of June 18, 2014

P3 Container Shipping Network is Surprisingly Kaput; US Manufacturing Almost Back to Pre-Recession Levels; Food Prices are Spiking; Parcel Shipping Rates Headed Higher for Many



The percent of Asia to Europe container traffic that Chinese regulators believed the proposed PC Network would control if the consortium was allowed to operate. So, this week they nixed the idea of letting the three largest container shipping lines – Maersk Lines, CMA CGM, and Mediterranean Shipping Co. – form a joint operating company to move boxes on pooled vessels, though each would do its own sales and marketing. The stunning Chinese move came after US and European regulators had recently given a thumbs up to the deal. The P3 Network, first announced a year ago, had plans to start shipping this fall as a separate operating company only, and likely would have changed the face of the container shipping industry – but now is apparently simply dead.




The year over year rise in May of the price of meats, poultry, fish, and eggs, according the US government’s index of such prices. That index, seasonally adjusted, hit an all-time record of 252 last month, according to numbers just released by the Bureau of Labor Statistics. Last May, the index was at 234. When the index was launched in January of 1967, it was at 38, meaning prices have risen more than 600% since then. Whether that is faster than general inflation over the same period we’re not sure, but rising food prices globally are likely to cause tensions in many countries if the pace doesn’t slow.


The US manufacturing output index for May, as just released by the US Federal Reserve. That puts it just half a percentage point below the 100 mark of the baseline year of 2007, to date the US' top year for manufacturing production, six years or so since the great recession first started in 2008. Note this is specifically for manufacturing, not the broader industrial output number than includes the more volatile mining and utilities numbers as well. The number could be revised down (or up) in coming months, but this is as close as the US has been to getting all the way back since the recession, and even if the economy treads water for awhile, US manufacturing seems almost certain reaching that 100 level sometime this year - and just maybe next month.



Estimated rise in costs per parcel ground shipment as UPS and FedEx enforce so-called dimensional pricing regimens that factor in total cube, not just weight. UPS plans to start using dimensional weight to price ground shipments this Dec. 29, a few days before FedEx Ground makes the shift Jan. 1. The shift toward dimensional pricing comes as e-commerce shipping volumes ramp up, with many small products shipped in larger packages at low prices, driving costs up for carriers. Of course, shippers can parry this move by getting more efficient in packaging at multiple levels, from items to multi-item cartons. UPS and FedEx have already been using dimensional pricing for air express packages for several years. Similar moves may be coming soon to less-than-truckload carriers.

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