Supply Chain by the Numbers

- Feb. 24, 2012


Supply Chain by the Numbers for Week of Feb. 24, 2012


Smucker's Pricing Push Doesn't Stick; China Workers Staying Down on the Farm; Maersk Decides It has Emough Mega-Ships Coming; Oil Prices - Of Course



The amazing rise in the prices food manufacturer Smucker's charged in the latest quarter versus the same period in 2011, as it responded to rising commodity costs. That included a led by a 30% increase on Jif and Smucker's peanut butter due to a shortage in last year's peanut crop. Alas, customers didn't go along with the idea, as Smucker's said sales in the quarter fell 10%, leading to an 11% decline in earnings and a stock price drop of 8%.




Price per barrel of West Texas intermediate as we went to press, up quite a bit over the last few weeks as concern about a conflict with Iraq, a falling dollar and who knows what is once again driving oil, gas and diesel prices higher, driving loud cries from the usual quarter. We were about 10% higher than this last April, we will remind readers, and then saw a sharp pullback not long after that. But it seems $100 oil, once feared, is simply here to say.


The number of migrant workers in China's Hubei Province said to be "missing" right now, meaning they have not returned to work in the factories from going back to their rural homes for two weeks to celebrate the country's Spring Festival. Other provinces are reporting similar issues. A New York Times article says that now not only rising labor costs are an issue for China, as has been well reported, but labor shortages as well, which means wages have to rise even higher to lure them back.



Amount of container TEU capacity that ocean shipping giant Maersk as expected backed off of this week, declined an option to acquire 10 more of the giant Triple E-Ships that each will hold 18,000 from Korean shipbuilder Daewoo. That in the face of continued and substantial overcapacity in the industry. Still, it has 20 of the giant ships on the way, even as Maersk said last week it is reducing capacity on Asia to Europe routes by 9%.