Supply Chain by the Numbers

- March 12, 2014

  Supply Chain by the Numbers for Week of March 12, 2014

Many US Ports Require Deep Thinking; Look Out, the Mouse is Watching; Leave the Drones Alone, Says Federal Judge; Commodities Continue Plunge


400 Feet

The altitude below which a federal judge has in effect ruled that the Federal Aviation Administration does not have the authority to regulate drone aircraft activity. That, it appears, gives the go ahead to a large florist in Michigan to continue with its tests of drone deliveries, very similar to what was shown by last November. After posting a video showing delivery of flowers by drone on YouTube, Flower Delivery Express received a communication from the FAA demanding it stop its tests. But in a separate case involving a videographer who used a drone to shoot a documentary, the judge told the FAA it did not have the authority to fine the man. So the flower tests are back on. See Michigan Florist May Beat Amazon to the Punch in Drone Delivery.



$1 Billion+

What Disney has apparently spent on a new system called My Magic+, the heart of which are RFID-based wristbands. The bands will allow guests to simply move their arms near tag readers for access into the parks and hotel rooms, pay for meals, enter attractions for which they have made reservations, and lots more. It will also enable Disney to track guests' every move at its theme parks. For example, guests could pre-order lunch at a specific time, and have their food brought to their table moments after sitting down, without checking in with anyone. Disney knows just where they are sitting. The program, to be officially rolled out this summer after months of tests, could ultimately have an impact on how we think about service, tracking and more far beyond Disney.


50 Feet

That's about how deep a port or its channels need to be to handle ships over 8000 TEU - vessels that should be commonplace at some US East Coast ports after the Panama Canal expansion is complete in early 2016 – and maybe sooner. Reports now say that changes coming from the new P3 shipping alliance with Maersk and the next two largest carriers, and the response from the rival G6 consortium, in the end will mean 8000+ TEU ships calling on US ports as early as June of this year. Right now, only New York/New Jersey, Baltimore, and Norfolk are deep enough. Savannah, Charleston, Miami and others have deepening projects in progress, but most are several years away from completion. New York also has a project to raise Bayonne Bridge to permit 13,000+ TEU ships to reach Port Elizabeth.



Drop in the global price of copper this year, as the commodity bubble continues to burst, continuing a more than two-year trend. Iron-ore prices were down 8.1% just this week. "The best way to define the mood in the market right now is panic," said Bob Haberkorn, a senior commodities broker at RJO Futures. "Everyone understands why we are going down, but nobody can tell where the bottom is." The reason is a general slowing of the Chinese economy and especially its building sector, as the government tries to get consumer demand up and infrastructure spending to a lower share of GDP. In 2013, China accounted for a stunning 66% of world iron ore demand. Some agriculture commodities are up, however, as soybean prices, for example, have risen sharply in 2014, driven by rising Chinese demand.