Supply Chain by the Numbers

- Jan. 15, 2015 -

  Supply Chain by the Numbers for Week of Jan. 15, 2015

Never Again $100 Oil? Target Abandons Canada after Just Three Years - at Big Cost; Just One-Third of Needed Crane Operators at La-Long Beach; Here Come the Mexican Truckers - Maybe



The number of miles into the US that Mexican trucking companies had to date been limited to travel, resulting in the need for costly transfers to US truckers at warehouses or transload centers. But that's over now, as the US DOT finally gave approval for Mexican carriers to operate in the US as required by the NAFTA agreement some 30 years after the trade agreement was signed. That came after a second pilot program wrapped up in October. The DOT decision has plenty of critics, notably the Teamsters union and the Owner Operator Independent Drivers Association. It's not clear how many Mexican carriers will venture into the US - since they are not allowed to carry US domestic freight, if the carrier cannot book a return load to Mexico, the trips would involve lots of expensive deadhead miles after dropping off the load in the US.




That's the reduction in the number of yard crane operators that the International Longshore and Warehouse Union (ILWU) has sent to work the ships at the ports of Los Angeles and Long Beach since Nov. 3, according to data recently presented by the Pacific Maritime Association (PMA), which represents West Coast ports and terminals in labor negotiations. The PMA has been accusing the ILWU of an intentional work slowdown as part of a negotiations strategy, an allegation the union has been denying. With dramatic gridlock at LA-Long Beach and several other ports, operators also dramatically reduced containing unloading during overnight hours, saying there was nowhere to put the containers, as the acrimony jumped this past week even after a federal mediator was named the week before.


The approximate price per barrel of oil that we saw for so many years - and which we are unlikely to ever see again. That from someone who ought to know - Saudi billionaire businessman and oil magnate Prince Alwaleed bin Talal, who said as much in a recent interview with the USA Today newspaper. bin Talal said the price collapse is simply a matter of supply and demand, with rising production in Iraq, Libya and of course the US combined with falling demand in both sluggish Western economies and China. Perhaps the most interesting question, bin Talal says, is at what price US fracking operations will no longer make economic sense.


$5.4 Billion

That's the amazing write down Target stores will take in its Q4 after announcing it was closing all of its 133 stores in Canada, all opened since 2011. Target's Canadian operations have basically been a disaster since the strategy was launched, with more than $2 billion in operating losses over that time. There were a variety of factors involved in Target's Canadian fail, and supply chain was among them. The Canadian stores were plagued with empty shelves, which in turn were caused in part at the start from physical case counts tied to bar codes that did not match the information for those SKUs in the inventory system. (See Wrong Units of Measure on Cases Played Key Role in Disastrous Launch of Target Canada Last Year.)