Logistics Management - July 2010 - Page 10-11

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Transportation cost predicted to increase accross all modes. Supply Chain Management solutions will be the buzz words for the next few years.

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Supply Chain Management: Surge in U.S. chip sales confirms forecast - Article from Supply Chain Management Review

Supply Chain Management: Surge in U.S. chip sales confirms forecast

By Patrick Burnson, Executive Editor

July 06, 2010

The Semiconductor Industry Association (SIA) reported today that worldwide sales of semiconductors in May were $24.7 billion, a sequential increase of 4.5 percent from April when sales were $23.6 billion and a year-on-year increase of 47.6 percent from May 2009 when sales were $16.7 billion. As expected, the year-on-year growth rate declined slightly from the 50.4 percent reported in April. All monthly sales numbers represent a three-month moving average.

“Global sales of semiconductors in May reached a new high and remain on pace to reach the SIA forecast of 28.4 percent growth to $290.5 billion in 2010,” said SIA President George Scalise.  “Chip sales have been buoyed by strength in sales of personal computers, cell phones, corporate information technology, industrial applications, and autos. Unit sales of personal computers are now expected to grow by 20 percent this year and cell phone unit sales are predicted to be up 10 to 12 percent over 2009 levels.

“Emerging markets, including China and India, are fueling sales of computation and communications products,” Scalise continued. “The automotive market is also slowly recovering after several years of weak sales. Demand from the corporate information technology and industrial sectors that had pushed out replacement cycles during the global economic recession is beginning to come back.”

SIA once again noted that the industry year-on-year and sequential growth rates are likely to continue to slow during the second half of 2010. “Recent chip sales have shown robust demand, but the year-on-year growth rates also underscore the very depressed market conditions of the first half of 2009. Going forward, the year-on-year growth comparisons will reflect the industry recovery that gained momentum in the second half of last year.

“Growing concerns about issues such as government debt, declining consumer confidence, and pressures on government spending do not appear to have affected worldwide semiconductor sales to date, but given the semiconductor industry’s growing sensitivity to macroeconomic conditions, these issues bear watching in the second half of 2010,” Scalise concluded.

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at pburnson@ehpub.com

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What Shippers Need to Know About Comprehensive Safety Analysis

 

CSA2010 will have a significant effect on all motor carriers & operators

Please take the time to learn more about CSA 2010 at:

 

csa2010.fmcsa.dot.gov/

 

Or to take the Online Course please visit:

http://elearn.landstar.com/login/index.php

 

The Federal Motor Carrier Safety Administration has rolled out CSA 2010 is to create a more efficient and effective way to monitor and levy enforcement against carriers of all sizes.

 

Beginning in 2010, ALL roadside violations (not just out of service violations) will be assessed against the carrier and operator.

 

Violations received will be placed into 6 categories that have been shown to cause crashes. These categories will be monitored on a federal and state level. If a specific category exceeds a predetermined threshold sanctions will be initiated against the carrier and driver to include fines, inability to transport hazardous materials, and ultimately (in the future) declaring the carrier unfit.

Violations a carrier receives will be assessed against the carrier for 24 months. Violations an operator receives at a roadside inspection will follow that operator for 36 months, regardless of which carrier the operator was with when the violation was received. Roadside performance becomes a part of the carrier's "report card" and the operator's "report card". CSA 2010 is scheduled for initial implementation November 30, 2010, with full implementation in 2011.

 

CSA 2010 will directly affect every interstate motor carrier

 

How can Shippers help?

Make sure cargo weight is correctly distributed (Violation = 21 CSA points)

Make sure sealed loads are properly blocked & braced (Violation = 36 CSA points)

Make sure
cargo weight is correctly distributed (Violation = 21 CSA points)

Make sure sealed loads are properly blocked & braced (Violation = 36 CSA points)

Make sure operator is able to load/unload in a timely manner (Violation = 21 CSA points) Hazardous Material Paperwork/Placards/Labels are compliant (Violation = 3 CSA points)

Li & Fung says China low-cost era over

Li & Fung says China low-cost era over


Speaking at the Reuters Consumer and Retail Summit on Wednesday, President and Executive Director Bruce Rockowitz said China was still a dominant and unique player in the whole supply chain despite everything that was happening in the country, including growing costs.

"We believe that over the next few years there is not going to be a radical change in where people source from," he said, adding that other countries did not have and would never have the same scale as China.

Li & Fung, which this year expects to export $8 billion worth of goods from China and $1 billion of goods from Vietnam, said China would continue to be its biggest sourcing country, while Vietnam would be the second-largest.

"China is still a very dominant and unique player in the whole supply chain," Rockowitz said.

He said structural problems restricted India from becoming as dominant as China, while Bangladesh, Indonesia, and Vietnam would grow dramatically.

Li & Fung would switch to sourcing from China's cheaper interior as infrastructure had improved with high-speed railways linking remote areas and major Chinese cities, he said.

"Over the next few years, I think still 50 percent of our production will be based in China. I don't think it will change dramatically at all, it may go up or down 1 or 2 percentage points, but I think China is still the dominate supplier of the world," he said.

On the potential of China's consumer market, Rockowitz said: "It has not developed national retailing yet" as the top 100 retailers accounted for only 10 percent of total domestic retail.

LOW-COST ERA OVER

The last 20 years had been a deflationary environment for costs of goods and was unique because China added so much production very quickly to the world, depressing global prices of consumer goods, Rockowitz said.

"Now what we and the industry are facing is that the party is over," he said. "Basically China has a lot of the same issues that all developing countries have when they become developed."

"What you are moving into is an era for higher prices," he said, adding that the Foxconn effect was the "natural evolution" of a country developing and part of "a greater movement of prices going up", including commodities prices and labour costs.

"The ultimate answer to all of this is consumer goods prices are going to get higher. On the other hand, retailers will have a hard time passing that on to consumers," he said.

U.S. BUSINESS TRENDING UP

The exporter, which supplies retailers such as Wal-Mart Inc (WMT.N) and Target (TGT.N), said it expected its U.S. business to trend up and did not see a double-dip in the U.S. economy as it had already emerged from recession.

Li & Fung gave a positive view for growth in 2010, helped by a strong recovery in the United States, which accounts for about 65 percent of its business and was expected to remain steady to slightly higher in the years ahead.

"If you look at the optimism and confidence of our customer base, its a complete change in a positive direction from last year, and in the last three to four months ... its been incrementally better every month," he said.

Commenting on areas that would see strong growth opportunities, Rockowitz said: "All areas have pretty big opportunities, including sourcing".

"For our sourcing business, growth is pretty established now for the next three to five years. Other businesses, like our beauty business, will be in a high growth position and are likely to grow much faster."

With $1 billion war chest for mergers and acquisitions, Li & Fung is aiming to expand its onshore businesses in the U.S. and Europe.

Li & Fung would look at acquiring footwear-, and health and beauty-related assets in Europe and in the U.S. and may consider acquiring food-related assets in future, Rockowitz said.

"This year will not disappoint shareholders at all from that point of view," he said, adding the company would announce its half-year results on Aug. 12 and would have other announcements to make at the same time.

To view full article:

http://www.supplychains.com/en/art/3732/