Supply Chain by the Numbers

April 3 , 2014

  Supply Chain by the Numbers for Week of April 3, 2014

Carrier Alliances to Dominate Container Shipping Volumes; Mars Finally Needs a New Place to Make M&Ms; Walmart to Spend More to Keep Shelves Stocked; Drop in US Corn Export Share is "Earie"



Level of capacity from Asia to the US West coast that will be controlled by one of the three, new container shipping alliances (G6, CKYH and P3), according to analysis from Drewry Shipping. Actually, the figure will be somewhat higher than that, as Evergreen is now joining CKYH too, making it CKYHE. That if all these consortia are approved by various regulators, amidst shipper concern over reduced competition in the industry from the alliances, though they are supposed to only be pooling capacity and sailings, maintaining individual sales and marketing efforts. The US recently approved the P3 plan from Maersk, CMA-CGM and Mediterranean Shipping Co., and Europe and China are expected to follow suit. The industry is changing dramatically and quickly.




Number of years it has been since candy maker Mars last opened a new US factory - but that string is now broken, as the producer of M&Ms, Snickers, and many other candy brands opened the doors to a new plant in Topeka, Kansas last week. The 500,000-square-foot facility is bringing about 200 jobs to the Topeka area, and cost some $270 million to build. Before the Kansas facility was built, the company's last new plant in North America was in Cleveland, Tenn.


$3 Billion

Revenue gain possible at Walmart US stores from improving its on-shelf inventory positions. That news from company executives speaking at its recent Year Beginning Meeting of store managers in Orlando, according to a report on Bloomberg. This echoed similar comments by a Walmart executive in early 2013 that was very critical of Walmart’s out-of-stock levels - but with a bit more of a positive tone this year (opportunity vs criticism). Perhaps surprisingly, the execs noted plans to add labor hours in-store as part of an effort to bolster "in-store execution." Increasing labor costs? It must be a big opportunity.



Level of world corn exports that the US saw in 2013 - down from more than 60% as recently as 2007. The reasons for the dramatic fall last year are complex, and include the fact that much US domestic corn production went not for exports but for internal production of ethanol. While experts predict the US share will rise to 34% again in 2014, the US dominance in corn production and global sales is perhaps over and clearly under assault from countries such as Ukraine, Brazil and Argentina. And China seems increasingly interested in buying corn from these other sources rather than the US. As with all commodities, after prices soared to $8.30 a bushel in 2012 at the height of the U.S. drought, farmers across the globe rushed to plant corn seed in 2013. The resulting increase in supply has pushed prices back down to around $5.00/bushel currently, but that is still well up from price levels in the 2000s.