Supply Chain by the Numbers

- June 28 , 2012


Supply Chain by the Numbers for Week of June 28, 2012


Global Energy Use Up, Led by Emerging Markets; FedEx Sees Tepid Economic Growth Ahead; Ocean Container Ships Often Late Pushing Off; Foxconn's Super Factory


1 Million

The almost unbelievable number of workers that apparently could ultimately be employed at a new Foxconn “super factory” that is being planned in Indonesia. Foxconn, a unit of Taiwan’s Hon Hai Precision Industry Co. and the largest contract manufacturer in the word, most known for its work assembling Apple products in China. The factory, now understudy by Foxconn, is being planned for the main Java island in the country, but Indonesia’s industry minister says the country will offer a range of tax incentives if they locate elsewhere in the island nation.




What FedEx, led by respected chief economist Gene Huang, said in its earnings call last week that it was predicting for economic growth for both the global economy in 2012 and the US economy in 2013. As FedEx’s volumes and need for capacity are highly levered to such economic changes, it calculates these numbers very seriously. The global growth estimate for this year would compare to levels of 3.6% in 2011 and 5% in 2010, as FedEx notes that even this weak number is dependent on a successful resolution to the seemingly never-ending financial crisis in Europe. The 2.4% growth for the US in 2013 would mark another year of tepid recovery here.


Growth in global energy consumption in 2011, according to the just released and as always excellent BP Statistical Review of World Energy for 2012. That figure is around the historical average, but well below the 5.1% rise in 2010 when overall economic growth was stronger. But continuing the recent trend, energy consumption in developed (OECD) countries actually fell .8% last year, while rising 5.3% in developing markets. China by itself accounted for 71% of all energy consumption growth.


Percent of ocean containers ships that left their first port on schedule in Q1, according to the latest Carrier Performance tracker by the analysts at Drewry Shipping. Obviously, if the first step is delayed, it often leads to other delays along the route and missed arrival times at the destinations. Once departed, Drewry says about 25% of container ships are on the sea longer than planned. Those factors together mean that just in about 57% of sailings does the actual arrival date of the container at the port of discharge meet the promised date. That uncertainty means companies have to carry inventory buffers.