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/

Global economics: IMF forecasts leadership role for Asian nations - Article from Supply Chain Management Review

Global economics: IMF forecasts leadership role for Asian nations - Article from Supply Chain Management Review

Ocean cargo/global logistics: FMC Scrutinizes Carrier Rates and Capacity

By Patrick Burnson, Executive Editor
June 01, 2010
As the Federal Maritime Commission ramps up its investigation of ocean carrier price-fixing, it is also keeping a vigilant watch on capacity and equipment shortages.
In a speech given before the Virginia Maritime Association last month, FMC commissioner Michael Khouri noted that U.S. exporters of agricultural products are particularly exercised about the impact of capacity limitation, equipment unavailability and rate increases on their ability to compete internationally.

“The capacity, equipment availability and rate increase issues and their impact on U.S. shippers are of great concern to the FMC,” said Khouri. “Last March, the Commissioners voted to initiate a Non-Adjudicatory Fact Finding Investigation into the current conditions concerning vessel and equipment availability in the U.S. export and import liner trades.”

Meanwhile, Khouri and his colleagues are concentrating on rate inflation too.

“Recent reports of increases in annual transpacific contract rates have heightened shipper concerns that these rate hikes are facilitated by carriers using, first, their legal authority to discuss voluntary general rate guidelines with, second, discussions to agree on capacity restriction,” he said. “The first discussion would be legal under the Shipping Act. The second discussions — if they occurred — would be outside of the Shipping Act purview and would therefore be a violation of the Sherman Act.”
While the FMC’s Fact Finding is not focused on the vessel operator’s antitrust immunity, the Commission is mindful of these concerns and plans to closely monitor the carriers’ collective activities. If there is any indication that capacity issues and higher freight rates are credibly linked to any improper use of antitrust immunity by foreign-flag or U.S. flag liner carriers, the Commission will take action, said Khouri. He said shippers may also see renewed attention by Congress and the Administration.

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards - Article from Logistics Management

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards - Article from Logistics Management

Green logistics/trucking news: President Obama and trucking industry agree on new fuel standards
By John D. Schulz, Contributing Editor
May 25, 2010
A fully loaded 80,000-pound tractor-trailer gets perhaps five miles per gallon of costly diesel fuel. If the truck is properly maintained. Going downhill. With a tailwind. Maybe.

President Barack Obama wants to change that. And, somewhat surprisingly, the American trucking industry largely agrees.

In a Rose Garden ceremony on May 21 with a handful of top U.S. trucking industry and heavy truck manufacturers on hand, President Obama signed a presidential memorandum that for the first time would set mileage and pollution limits for big trucks. The rules are set to take effect with the 2014 model year.

Although heavy trucks comprise just 4 percent of vehicles, they account for perhaps as much as 21 percent of air pollution from mobile sources. Heavy trucks consume 16 percent to 22 percent of this nation’s fuel, or about 54 billion gallons of fuel annually. When diesel reached its peak in 2008, the U.S. trucking industry had a fuel tab that exceeded $150 billion. Although this year’s figure cannot be determined precisely, the tab will approach that again.

After labor and equipment, fuel is the third-highest cost for a motor carrier. The average truckload carrier spends about 12 to 14 percent of its revenue on fuel, with the average LTL carrier spending perhaps 6 percent (The difference is because of the longer lengths of haul of a TL carrier, typically over 1,000 miles).

With the White House under pressure from environmentalists after the catastrophic BP oil spill in the Gulf of Mexico, the president chose to go the executive order route on truck mileage standards. That was an end-run around Congress, which could have been expected to dither for years (if not decades) on the issue. Instead, the presidential memorandum directs the U.S. Department of Transportation and the Environmental Protection Agency to develop national standards for fuel economy and greenhouse gas emissions for heavy- and medium-duty trucks.

“The nation that leads in the clean energy economy will lead the global economy,” Obama declared on May 18. “I want America to be that nation.”

Although a Class 8 truck is cleaner now that it has ever been, the nation’s 7 million commercial trucks are hardly pristine. According to the EPA, commercial trucks account for 21 percent of all greenhouse gas emissions in the transport sector even though they are roughly 4 percent of all vehicles.

“This is a small but commendable step,” Michael Levi, an energy and climate change expert with the Council of Foreign Relations, told the New York Times. “The oil spill can help focus people’s attention, but it will take something else to close the deal.”

That “something else” could be the surprising support of the organized trucking lobby. For an industry that fought deregulation, anti-lock brakes and other initiatives when they were first proposed, the trucking industry seems unusually sanguine and even supportive of the president’s proposal.

Hours after the president’s announcement where he was flanked by top executives of the trucking industry and its suppliers, the American Trucking Associations issued a press release trumpeting the announcement that the President “effectively endorses the ATA Sustainability Task Force recommendation” of 2008 that called for national fuel economy standards for trucks to reduce greenhouse gas emissions.

ATA Chairman Tommy Hodges, who also is chairman of Titan Transfer, Shelbyville, Tenn., attended the Rose Garden ceremony along with the heads of Daimler Trucks North America, Volvo North American Trucks, Cummins and Navistar International.

The trucking industry is determined “to be at the front of the fuel economy issue,” Hodges said. He said ATA would have “significant input” on the final rule to develop what the industry hopes will be beneficial and affordable fuel efficiency standards

SaaS and Outsourced TMS Strategies

The trend is up for Software as a Service and Outsourced TMS Strategies according to data from a recent Aberdeen Group White paper. With 69% of their respondents stating that they prefer to seek assistance through consulting on "best practice implementation".

We can break down the graph into three distinct groups:

1. Thought Leadership(69%) – Companies prefer to seek assistance on thought leadership with 69% considering consulting on "best practice implementation"
2. Optimization (40% range) – Companies prefer to seek assistance beginning with planning, shipment monitoring and problem resolution, and freight audit and settlement assistance
3. Execution (30% range) – Assistance in managed services for backhaul, inter-company coordinators, transportation execution and procurement / RFO management

The numbers of companies exploring release of control over execution-side capabilities is on the upswing. The aversions of the past to releasing control of execution-related areas is beginning to subside as SaaS hosted sites, B2B data exchange platforms and providers become more robust and secure, and 3PL options for managed systems and execution become more commonplace and expand their service offerings.
Source: Aberdeen Group