[#227] Supply Chain in Numbers - Apr 15, 2024
Home Depots adds 4 new DCs, 0.1% global shipping fleet is recycled, China to Mexico containers are increasing, Tyson's new robot can product 4M lbs per week, 1 in new 7 iPhones are made in India
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.
4 new DCs to the existing 14 DC network
Home Depot’s new supply-chain investments mark a bet on the construction and remodeling professionals. The company plans to add four distribution centers this year to its 14 warehouses, targeting professionals with dedicated sites handling bulky construction materials — lumber, insulation, and roofing shingles, for instance — that are particularly in demand among contractors. Sales to the professional market account for about 48% of Home Depot’s overall sales. Home Depot estimates the market for bulky, big-ticket orders going to professionals is about $200 billion. To win more business from those customers, Home Depot is adding features such as the ability to reserve products, have products delivered to job sites, and pay when items are delivered rather than paying after each order, like retail customers. [WSJ]
0.1% of global shipping fleet
Ship recycling has dropped to the lowest point in decades, with just 2 million deadweight tonnes of ship capacity scrapped in the first quarter of this year. Things have been low for quite some time, this being the ninth consecutive quarter with recycling under 3 million deadweight tonnes scrapped, and it’s primarily thanks to an increased demand for ships and lower-than-typical orders for tankers and bulkers. The lull — only 0.1 percent of the global shipping fleet has been recycled over the past two years, compared to the 0.45 percent average over the past two decades — is thought to be temporary, as new deliveries and an eventual cooling of the ongoing crisis in the Red Sea should increase incentives to take old vessels out of service. [NumLock]
60% increase in containers
Container Shipments From China To Mexico Skyrocketed in January. China’s container exports to Mexico increased significantly by nearly 60% YoY in January. This growth suggests a potential strategy to circumvent tariffs, as some goods may be redirected into the US market through Mexico. Mexico’s ports, particularly those on the West Coast, have witnessed a substantial uptick in container activity, underscoring the strengthening trade ties between China and Mexico. This shift in trade dynamics is reshaping global trade patterns, with Mexico emerging as a pivotal player in trade routes to the United States. [Freightwaves]
4 million pounds of products per week
Meatpacking can be dangerous for workers, and the large companies that control the industry have long sought to automate the labor's more tedious and physically taxing elements. A new Tyson chicken processing plant in Virginia cost $300 million. It can produce 20 to 30 percent more chicken nuggets, strips, and wings with 250 fewer workers, producing 4 million pounds of chicken products per week. In 2023, meat processors spent 5 percent of their capital investments on advanced automation, much higher than in the past, in the quest to make a robotic butcher. [NumLock]
1 in 7 new iPhones
Apple assembled $14 billion of iPhones in India last fiscal year, doubling production in a sign it’s accelerating a push to diversify beyond China. The US tech giant makes as much as 14% or about 1 in 7 of its marquee devices from India. The ramp-up suggests Apple is accelerating efforts to cut its longstanding reliance on China as geopolitical tensions mount. The country remains its largest iPhone-making hub and biggest overseas market. As per the government of India, this growth in manufacturing has created 150,000 direct jobs for Apple’s suppliers. [Bloomberg]