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1. PURPOSE OF THE JOB:
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Provide overall the support and co-ordination of the procurement & logistics and other related functions.
Ensure the procurement process which fully integrated with the business and the supply market place in a cost effective manner whilst fully comply with relevant PMI & VPM Branch P&P.
Cordinate with VPM to ensure a logistic system which fully integrated with production activities in an effective, efficient manner whilst fully comply with custom regulation and VPM Branch requirements.
Team Lead: Lead local planning team, develop capability of planning team and manage back-up within team etc.
Panama Canal Expansion: A Potential Supply-Chain Game-Changer
PANAMA CANAL EXPANSION: A POTENTIAL SUPPLY-CHAIN GAME-CHANGER
JOHAN ORDONEZ/AFP/Getty Images
Many investors, public and private alike, are making big bets on U.S. infrastructure projects tied to expansion of the Panama Canal, which started moving supersized container ships through its wider, deeper channel and locks on June 26.
The canal’s expansion was years in the making and cost a reported $5.25 billion. But that’s a fraction of what’s being spent here in the United States to make East and Gulf Coast ports accessible to the giant ships now able to pass through the canal.
The opening of the expanded canal will have a ripple effect on the economy – impacting not only U.S. ports and shipping, but the railroad and trucking industries as well, along with virtually every company involved in trade with Asia, or manufacturing or sourcing from Asia. Overall, according to research conducted by BCG and the transportation and logistics firm, C. H. Robinson, as much as 10% of container traffic between East Asia and the U.S. could shift from West Coast ports to East Coast ports by the year 2020.
This doesn’t mean West Coast ports will see a decline in shipping traffic. It means the West Coast ports, many of them already operating at or near capacity, will see traffic increase more slowly than they might otherwise.
Supply chain managers may have the toughest jobs of all. They will have to balance the relative value of time and cost, calculations that can be fraught with uncertainty. It’ll be slower, but cheaper – perhaps as much as 30% cheaper in some cases – to ship certain goods from East Asia to the East Coast. It’s a tradeoff that will be well worth making in some cases, but not others, as the research referenced above explains.
The savings that manufacturers, shippers, retailers and consumers may realize from the new routing patterns will need to be balanced, of course, against the bill taxpayers are being handed to deepen East Coast harbors and shipping channels and upgrade port facilities.
The Port Authority of New York and New Jersey – which oversees the largest East Coast port complex – will spend nearly $3 billion alone, if current estimates hold. Some $1.3 billion will be spent to raise the height of the Bayonne Bridge, which connects Staten Island, N.Y. and Bayonne, N.J. This will allow the bigger ships to pass under the bridge so they can get to the docks for loading and unloading. Another $1.6 billion will be spent deepening the harbor and shipping channel.
The South Carolina Ports Authority will spend a reported $1 billion through the end of the decade on dredging and other capital improvements at the Port of Charleston. When the work is done, Charleston harbor will be the deepest on the East Coast, they say. Another $4.5 billion will be spent on a new container terminal in Jasper County, S.C., adjacent to the Port of Savannah, a joint project with the state of Georgia.
Upstate South Carolina, where the state’s “inland port” is located – some 200 miles from Charleston, near Greenville – also expects to benefit from an increase in container traffic generated by the Panama Canal expansion. State and local officials see the area becoming a major rail hub and distribution center. The state also has plans for a second inland port, this one closer to Charleston, near the Interstate 95 corridor and CSX CSX +% rail lines.
The story is the similar elsewhere, from Houston and Tampa Bay on the Gulf to Philadelphia on the Atlantic: big investments in anticipation of large increases in container traffic.
How much is being wagered? According to the American Association of Port Authorities (AAPA), total public and private investments from 2016 through 2020 on port infrastructure and related projects are expected to approach $155 billion, about 30 times greater than the cost of the canal expansion. Whether the expected increase in shipping traffic justifies such massive investments remains to be seen.
Consider the Port of Charleston. According to the SC Ports Authority, the port posted operating earnings in fiscal 2015 of $30.4 million. If the canal expansion were to result in a 20% annual increase, we’re talking about less than $7 million per year in additional earnings. At that rate, it would take more than a century to offset the billion dollars being spent on the port’s upgrade.
And this assumes the projected traffic increases will live up to expectations.
There are still a lot of unknowns. For example, after the giant cargo vessels pass through the canal, a case can be made for off-loading them at intermediary ports in the Caribbean – the Freeport FCX -2.83% Container Port in the Bahamas; Kingston, Jamaica; or Mariel, Cuba, perhaps – where the cargo would then be reloaded onto smaller ships for delivery up and down the East Coast. This would cut into the competitive advantage of Charleston, New York and the other major East Coast ports.
Then there’s the matter of reshoring. China, as we’ve discussed here, is losing its cost advantage. Wage and other increases there, and increased use of robotics here, mean that it is now economically advantageous to manufacture many products intended for the North American market in Mexico and the United States. This will cut into traffic.
Whatever ultimately happens, the Panama Canal’s expansion is a potential game-changer for companies that continue to manufacture or source in Asia. In some cases, cost will win out. In others, time will be the determining factor.
Only time will tell whether it will be the game changer that ports and shippers anticipate. Now all we can do is watch…and wait.