Industry News

Los Angeles Times, April 16 2010

The ports of Los Angeles and Long Beach, which together make up the nation’s busiest shipping container complex, showed gains in cargo traffic for the fourth straight month in March, boosting trade-related employment in Southern California.

In Los Angeles, the largest U.S. port, exports jumped 15.8% compared with March 2009, driven by such items as scrap paper, scrap metal, agricultural products and finished manufactured goods. Long Beach’s exports also rose strongly, 10.9%, as both ports benefited from the weakness of the U.S. dollar against other major world currencies.

Import cargo volume at the nation’s major retail container ports is expected to be up 8 percent in April compared with the same month a year ago, and solid increases are expected to continue through the summer as the U.S. economy improves, according to the monthly Global Port Tracker report released today by NRF and Hackett Associates.

“Retail sales are starting to improve and retailers are importing merchandise in the quantities they need to meet that demand,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “We expect these numbers to continue to climb as merchants and their customers move away from the recession and back toward normal shopping habits.”

U.S. ports handled 1.01 million Twenty-foot Equivalent Units in February, the latest month for which actual numbers are available. That was down 6 percent from January as shipping hit its traditional slow point for the year but up 20 percent from the unusually low numbers seen during February 2009. It was also the third month in a row to show a year-over-year improvement after December broke a 28-month streak of year-over-year monthly declines. One TEU is one 20-foot cargo container or its equivalent.

March was estimated at 1.02 million TEU, a 6 percent increase over last year as spring products began to head for store shelves. April is forecast at 1.07 million TEU, up 8 percent from last year; May at 1.12 million TEU, up 7 percent’ June at 1.18 million TEU, up 17 percent; July at 1.24 million TEU, up 12 percent; and August at 1.32 million TEU, up 15 percent.

The first half of 2010 is expected to total 6.5 million TEU, up 10 percent. Imports for 2009 totaled 12.7 million TEU, down 17 percent from 2008’s 15.2 million TEU and the lowest since the 12.5 million TEU reported in 2003. The forecast for first-half growth is down from the 17 percent increase projected a month ago as more recent data becomes available.

“Port volumes have begun to rebound and we expect growth to continue going forward,” Hackett Associates founder Ben Hackett said. “Retailers were maintaining lean inventories during the recession but are carefully building back up.” 

In a recent article in Supply Chain Digest, supply chain analysts at IDC’s Manufacturing Insights group,  presented their top 10 predictions in the supply chain for 2010.

The predictions come from IDC analysts Simon Ellis and Kimberly Knickle.  Here is an excerpt from the article and if you want to read the full story, click here.

1. “Dynamic Optimization,” will dominate capability investment to support redefining of the supply chain: Though it’s been projected before, IDC believes 2010 will really be the year of supply chain optimization technology to further drive out costs and waste. Key to this will also be the ability to respond to market and environmental changes rapidly and optimally.

2. S&OP will re-emerge as the synchronizing process for reconciling supply and demand: This one confuses us a little, as we didn’t see S&OP disappearing and thus requiring “re-emergence,” but IDC says that while always important, effective Sales and Operations Planning is even more so in dynamic times. “Manufacturing supply chains are not going to suddenly become simpler, as increasingly available data sets make business planning and execution more complex, not less,” IDC says.

3. Balancing supply and demand across the value chain will prompt a strategic redesign of supply networks: The need to penetrate emerging markets and increasing analysis of labor versus logistic costs will continue to drive changes to network strategies.

4. Supply chain and product lifecycle management (PLM) applications will increasingly converge as manufacturing companies focus on delivering innovation: Innovation today is critical to market success, but “the new product development and introduction process (NPDI) in many companies is poorly executed, with generally low levels of cross-functional involvement,” IDC says. Better integrating PLM tools into supply chain processes can help.

5. Intelligent supply chains will put broader supply chain visibility burdens on supply chain organizations, both owned and outsourced: “2010 will be the year that network visibility comes of age,” IDC says.  Essential for managing increasingly virtual supply chains.

6. Supply chain organizations will invest in capabilities that facilitate global operations: As we’ve noted before, the growth in globalization has in most cases outpaced corporate investment in global supply chain technology.  “While it remains to be seen how closely integrated global trade management needs to be with more traditional transportation management capabilities, we do think that this will be a hot application for manufacturers in 2010,” IDC says.

7. Transportation capacity will tighten, causing supply chain organizations to rethink fulfillment strategies: The current excess capacity in transportation markets, and by extension depressed lane rates, “are not sustainable and will not last,” according to IDC. “Shippers should prepare for higher rates as we move into 2010, and expect capacity shortfalls for next year’s holiday season.”

8. The increasing pace of supply chain outsourcing/offshoring will keep risk management high in the strategic agenda: Investment though will be focused on building risk awareness: Due to the economic crisis of 2009, most companies put supply chain risk management on the back burner, says IDC. “Leading manufacturers continue to find ways to develop the right combination — risk awareness and early detection, followed by rapid response, but for now, with minimal new IT investment,” it adds.

9. Smart services and the need for persistent assets will create the inflection point for RFID, sensors and M2M (machine-to-machine): Advances in technologies, experience, and operational need will lead to major advances in companies building “sensory networks.”

10. Armed with metrics, manufacturers will move from sustainability reporting to “intelligence”: While many companies have started carbon emissions reporting, “The next step is to create intelligence — to apply the information to make better decisions about their material selection, sourcing, use of limited resources, product life cycle, supply chain, and more. Companies are showing an increasing willingness to make changes to fundamental business processes, design for sustainability and cradle to cradle, or greening the supply chain.”