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!

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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

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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.

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IMSW Overview of National FTZ and Strategic Development Projects 1977-

2014

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