Supply Chain by the Numbers

- July 3, 2014 -

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

Increased Competition Hangs over Port Talks; Cost of Chinese Engineers Rising Quickly Too;  Renewable Energy Growing Fast off Low Base; Intel Goes Conflict Mineral Free



Share of total US port volume moving through West Coast ports in 2013, down from just over 48% in 2008. That decline will certainly be a factor in the on-going negotiations between the International Longshore and Warehouse Union (ILWU), which represents dockworkers, and the Pacific Maritime Association, representing West Coast ports and terminals, as work continues at the ports even though the current contract expired June 30th. While the union has asked for a "fair" wage hike, most believe its demands will be modest in the face of volume pressures at the ports, as container volume growth has slowed substantially, the West Coast is already losing market share, and the Panama Canal expansion is scheduled for completion in 2015, opening up bigger ships to East Coast ports from Asia.




Share of global energy consumption that came from renewable sources in 2013, according to the just released BP Statistical Review of World Energy 2014. That's up from a 0.8% share a decade ago. BP says renewable energy used in power generation grew by 16.3% and accounted for a record 5.3% of global power generation in 2013 as well. China recorded the largest incremental growth in renewables, followed by the US, while perhaps surprisingly growth in Europe's leading players - Germany, Spain and Italy - was below average. Globally, wind energy (+20.7%) once again accounted for more than half of renewable power generation growth, while solar power generation grew even more rapidly (+33%), but from a smaller base.


The number of smelters in 21 countries across the globe that Intel has been working with since 2009 to verify the source of the minerals used to make raw materials used in its computer chips. The goal of this massive effort: eliminate use so-called "conflict minerals," meaning materials that come from Congo and elsewhere in Africa sold by militias that commit gross human rights abuses. This week, Intel said it has achieved that goal, after a massive effort and substantial costs to develop a program that can track the source of all incoming materials to the smelters it uses to process the minerals. Intel helped its suppliers developed audit programs to identify the origins of minerals and establish "a chain of custody" across the supply chain.



Increase in pay that Chinese automobile companies will offer native engineers working at foreign auto OEMs, according to an article this week in the Wall Street Journal. And just as with factories wages, pay for engineers in China is increasingly rapidly across the board. The article says Chinese auto engineers with under 10 years' experience are already earning between $29,000 and $48,000 before the bounty being offered by Chinese domestic manufacturers. This is an important development, as many Western companies have been moving or are considering moving not only production but product development and R&D to China as well. Ford, for example, started with 300 employees at an R&D facility in Nanjing in 2007, but plans to have 2000 employees there by 2018.