[#198] Supply Chain in Numbers - Sep 25, 2023
Panama restrictions, Nordstrom improved DC productivity by 20%, Sheetz planning a $145M food prep DC, Kale Logistics raises $30M, Ulta Beauty has 400 stores with SFS capability
Welcome to “Supply Chain in Numbers.” This newsletter tracks significant digits from the world of the supply chain. Five prominent numbers are published every Monday. If you have any feedback, please send it to me.
1 ft of draft or 300 to 350 containers
About 55% of sea shipments from Asia to the US pass through the Panama Canal. Even though the Panama region gets 5th highest rainfall worldwide, the rain has steadily decreased. A year ago, Panama’s water levels were 89 ft above sea level. But now, it is at 79 ft. This reduction has prompted the canal authorities to mandate lesser draft constraints on container ships. For every one-foot draft reduction requirement, the container must carry 300 to 350 containers less. In the past, the canal’s draft limit was 50ft, but it has been reduced to 44ft. This resulted in a 10 to 20% reduction in containers per ship passing through the canal. 75% of the cargo passing through either bound to or originated from the US. Without the canal, ships would take via Cape of Good Hope, which takes at least 10 days extra. [WSJ]
20% improvement in DC productivity
It looks like Nordstrom’s supply chain optimization initiatives are reining in expenses and getting products to consumers faster. After improving distribution and fulfillment center productivity and throughput by 20 percent in 2022, the retailer is seeing significant cost benefits as it scales its 1-million-square-foot West Coast omnichannel fulfillment center in Riverside, Calif. Compared to the first quarter of 2022, supply chain costs per unit in the second quarter this year were 5 percent lower despite inflation. Nordstrom said delivery speed was up 9 percent from the year prior. The company stopped fulfilling online orders from Nordstrom Rack stores in the third quarter of 2022 because doing so negatively affected sales. [Sourcing Journal]
$145 million food prep DC
Sheetz has outlined plans to spend $145 million building a new food preparation and distribution facility in Findlay, Ohio. Once complete, the facility will support Sheetz’s expansions in Ohio and Michigan, a company spokesperson said. Sheetz currently operates 76 locations in Ohio and is building its first store in Michigan, where it has ambitious plans to grow. The facility is expected to create more than 700 jobs over the next five years, according to the announcement. It’s slated to open in 2026. This will be Sheetz’s fourth distribution center, joining similar facilities in Burlington, North Carolina, and Claysburg and Prospect, Pennsylvania. [Supply Chain Dive]
$30 million funding
Kale Logistics Solutions, an Indian startup offering a vertical SaaS platform to assist logistics needs, has raised $30 million in a fresh funding round, as the 14-year-old startup eyes expansion in the U.S. and Europe. Handling logistics and shipping cargo usually requires coordination among several parties, much like an international journey for an individual. Yet, a major part of this process often entails extensive paperwork. Kale Logistics aims to eradicate paper-based processes in these activities through a suite of cloud-based software tools that facilitate digital data transfer among all stakeholders in cargo and logistics. Kale Logistics has over 100 airports and ports worldwide, serving clients in 36 countries. Its customer base includes cargo companies, airports, and seaports. [Tech Crunch]
400 stores with “Ship-from-Store” capability
Ulta Beauty has expanded its ship-from-store capabilities to 276 new locations. That represents a sharp jump from the 115 Ulta stores that fulfilled e-commerce orders in January this year. The company now fulfills e-commerce orders from 400 stores in total. Ulta has also expanded same-day delivery availability from almost all its 1,362 retail stores through DoorDash. In fiscal year 2022, Ulta stores fulfilled 31% of the company’s digital orders, up from 28% the year prior. That metric increased further in the company’s most recent quarter, covering 39% of digital orders. [Supply Chain Dive]