Supply Chain by the Numbers

- Dec. 11, 2014 -

  Supply Chain by the Numbers for Week of Dec. 11, 2014

Amazon's New Delivery Mode; Delays at Port of Los Angeles Keep Getting Worse; Expectations for Hefty Truck Rate Increases in 2015; Apple Supply Chain Manager Off to Jail for Selling Secrets



Number of minutes that serve as the maximum threshold for "instant" delivery for orders from in new tests using, of all things, bicycle couriers in New York City. Amazon is testing this new "mode" in the Big Apple in an effort to meet the market segment that needs delivery in one hour or less. The report says Amazon has been holding time trials using bike riders from at least three courier services to identify which is the speediest and most diligent in the bicycle-based approach. The bike service has been dubbed "Amazon Prime Now" and is operating out of the company's new building in Manhattan. This obviously opens up a new fulfillment path in addition to use of its own trucks, commercial taxis, drones and other methods the company has tested in the past year or so.




Average delay in days in getting containers into and out of the port of Los Angeles of late, according to reports this week, as factors from rising volumes to a slowdown by union members working without a contract has pushed congestion up dramatically and reduced throughput. "We look to return to Los Angeles, but ultimately, we must regard this as a liability to our customers," Jeff Katz, director of logistics and trade compliance at Sharp Electronics, said at a recent conference. The JIMLAR Footwear Division of Global Brands has nine containers with 45,000 pairs of shoes bound for a West Coast customer’s DC. The ship originally had an estimated arrival time of Nov. 26, with a cancel date of Dec. 12. The carrier pushed back the delivery date to Dec. 12. The customer said it would give JIMLAR until Dec. 15, leaving only three days to get the containers to the DC. "So if we don’t get these goods there by the 15th, we’re losing money," a company logistics exec said. It's continues to be a real mess.


The consensus increase in truckload rates expected by US and Canadian shippers in 2015, according to a new survey by RBC Capital Markets released this week. That is a major departure from the view of shippers last year in the survey, when most said that pricing would range from flat to a 3% increase - though it's turned out to be much more than that. None of the surveyed shippers this year expects truck pricing to decline in 2015, compared to an also low 3% that did last year. "Truck pricing is still competitive, but it’s getting to the point where trucks can start commanding higher rates," one surveyed shipper told RBC Capital Markets. You can say that again - rates continue to rise.



Number of days former Apple supply chain manager Paul Devine will now spend in prison, as the sentence for his role in selling confidential supply chain information to Apple suppliers was finally handed down this week. He was also fined $4.5 million. Alongside Singaporean partner Andrew Ang, Devine was found guilty in 2011 on 23 counts including wire fraud, kickbacks, and money laundering for passing information about upcoming products to Apple suppliers, which used the information to gain leverage in negotiations with Apple and paid kickbacks to Devine and Ang. For some reason, it took three years to deliver the sentence. A lesson to all, we hope.