cscmp 2014 supply chain innovation us manf boom

Supply Chain Innovation: US Manufacturing Boom

ByCurtis Spencer

President, IMS Worldwide Inc.

How Much RE-Shoring is Occurring?

• Boston Consulting Group’s report in 2012 had everyone expecting “25% Re-Shoring to the USA in the next 5 years” Not going to happen!

• However, we are seeing a resurgence in Mexican Manufacturing in auto, home goods and other “heavy products” for US consumption.

• AND…we are seeing a huge ‘boom’ in basic, heavy manufacturing being started up in the USA-plastics, chemicals, steel, basic metals – all based around Cheap Natural Gas for the next 100 years.

Chemical, Resin and Plastics MFG.

• 191 new or expansions in petrochemical processing

• This is $117 billion in the US petrochemical industry• By 2020, the cumulative impact will boost real GDP

by 2.0% to 3.3%• Creating from 2.7 million to as high as 3.6 million

new jobs.• Representing cumulative capital investments

totaling $117.0 billion in the United States, fully 62% of this is foreign direct investment.

• 62% of this investment is foreign direct investmentSource: American Chemical Council, 2014

Here is a look at the Evidence for Mexico!

www.imsw.comForeign Trade Zone, Logistics and Supply Chain Consulting

www.imsw.comForeign Trade Zone, Logistics and Supply Chain Consulting

Since 2003, wages in Mexico have risen only 25%

compared to 218% in China

5SOURCE: International Labour Organization, U.S. Bureau of Labor

Statistics

U.S

. Dol

lar

www.imsw.comForeign Trade Zone, Logistics and Supply Chain Consulting

2011-2013 WSJ

Supply Chain Innovation:Intermodal Routing

New Options By

Curtis SpencerPresident, IMS Worldwide Inc.

Source: ShipmentLink.com (Evergreen) Sailing SchedulesFrom China, it takes about 2 weeks to bring cargo to the west coast and about 4 weeks to bring it in on the east coast. (2000)

3517

34

36 36

17$1,720

$3,214

$3,165

Shanghai to North American Ports: Slow Steaming Effects –2000 & 2014Pricing as of June 20, 2014

$1,200

$800

Seattle/Tacoma

Los Angeles / Long Beach

Lazaro Cardenas

Oakland

Houston

Savannah / Charleston

NorfolkColumbus

Prince Rupert

Mexico City

Intermodal Routes to Major Inland Ports

Dallas/FW Atlanta

Memphis

Chicago

Kansas City

NY/NJ

Cent. PA

Jacksonville

Vancouver

z

Megapolitans

Sources: Population, employment, and real estate growth forecasts by Robert Lang and Arthur Nelson of the Metropolitan Institute at Virginia Tech

and Phil Hopkins of Global Insight; Business 2.0, November 2005

East Coast-West Coast TEUCost Line Equilibrium-September 2014

I-35 Corridor +40%

Gulf Coast Belt +31%

Cascadia +38%

Norcal +35%

Southland +35%

Valley of the Sun +81%

Great Lakes Horseshoe +10%

Atlantic Seaboard

+12%

Southern Florida +52%

Equilibrium

Line Q2 2014

I-85 Corridor +35%

About IMS Worldwide Inc.

• IMSW has completed over 325 FTZ Projects during 45 years. We have conducted 36 Logistics/Drayage studies for Industrial RE firms, RRs and land-owners.

• We work with Large Gateway Zones (Houston, LA, Miami, Dallas, Chicago, PHX, El Paso and NJ)

• We work with Fortune 1000 companies: Target, The Limited, Dell, Home Depot, Abbott Labs, TJX, Dicks Sporting Goods, CEVA, FedEx, UPS, Yusen, NFI, Nippon Express, etc.

• We work with the largest REITs in the USA: LPTPrologis, Duke, Majestic, Clarion, USAA, IIT, etc.

www.imsw.comForeign Trade Zone, Logistics and Supply Chain Consulting

IMSW Overview of National FTZ and Strategic Development Projects 1977-

2014

www.imsw.comForeign Trade Zone, Logistics and Supply Chain Consulting