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
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