This weekend the New York Times published a story about the ongoing criminal trial over the 2008 crane collapse in NYC that killed two people. In brief, the crane owner, New York Crane and Equipment Corporation, needed a critical part manufactured to repair the crane and the owner found quotes from US-based companies to be too expensive; he then instructed an employee to find a cheap solution, leading the company to hire China-based RTR Bearing to manufacture the needed bearing at a comparatively low price. But during the trial, some troubling truths were revealed:
- Joyce Wang, RTR’s owner, claimed to have two factories. In fact, she was an agent who liaised with independent factories.
- RTR’s website claimed RTR had been operating since 1998. In an affidavit for the criminal case, Ms. Wang stated that the company had only been operating for six months when they were contacted about the crane part in 2007.
- RTR provided no references about their prior work to New York Crane and Equipment Corporation.
- Of the two parts RTR shipped to New York Crane and Equipment Corporation, one was deemed too defective for use upon receipt.
Notably, New York Crane and Equipment Corporation did not have anyone experienced in sourcing working on this project. The entire research-to-installation cycle was handled by a mechanic working for James F. Lomma, the company owner.
The tragedy highlights problems that sourcing professionals face often: ascertaining supplier company credentials and ensuring quality control can be difficult, especially when using company-provided information to do it. Top-level assessments of a manufacturer’s history and production levels can be made with services like Panjiva, but that is only the first step. These are real problems that require experience and attention, as well as comprehensive product assessments and quality control procedures, to deal with properly. They don’t—and can’t—afford shortcuts.
The word from the Panjiva research team: trade activity experienced declined significantly, but as expected, from January to February. Specifically, the number of waterborne shipments coming into the U.S. experienced a 20% month-over-month decline from January to February. In years past, we’ve seen Chinese New Year-related declines from January to February (-15% in 2011, -4% in 2010, -19% in 2009, -1% in 2008).
The number of global manufacturers shipping to the U.S. also went down — 12% — from January to February. January-to-February changes in previous years: -8% in 2011, -3% in 2010, -10% in 2009, and +1% in 2008.
- The percentage of significant manufacturers on the Panjiva Watch List remained at 19%.
- The percentage of significant buyers having done business with a Panjiva Watch List supplier in the preceding three months also remained at 26%.
- Manufacturers that have suffered a 50% or greater decline in volume shipped to American customers in the most recent three month period, versus the same period a year ago, are on the Panjiva Watch List.
- “Significant manufacturers” are companies that have sent 10 or more shipments to American customers within the last year. As of the end of February, there were 93,577 significant manufacturers.
- “Significant buyers” are U.S. companies that have received 10 or more shipments from overseas manufacturers within the last year. As of the end of February, there were 80,441 significant buyers.
Looks like some “cheers!” are in order! According to the Panjiva research team, stout shipments are up once again this year, possibly hinting at a particularly festive March 17th. January and February shipments of the brew are at a record 609 – an increase of over 23% over last year’s 494 shipments and a whopping 185% increase over the 214 shipments in 2010. Though the reasons behind the rising shipments could be attributed to several factors, one thing is for sure: you won’t be going thirsty this St. Patrick’s Day.