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Trends & Latest News 05/20/2022

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Continuing Impact of the Russia-Ukraine Conflict on Global Supply Chains

According to a new World Bank report, World Trade is likely to drop by 1%, lowering global GDP by just under 1%. Exporting countries like Vietnam, Thailand, and Mexico are witnessing a fall, especially in energy-intensive sectors. Other grain exporting countries like Turkey, Brazil, and India and fossil fuel exporting countries like Nigeria and the Middle East are experiencing an increase in exports to counter the gaps in supply due to the war. Commodity markets, logistics networks, supply chains, tourism, and FDI are the sectors most impacted by the conflict.

From the available data for 2019, Russia and Ukraine comprised 25% of the global wheat and 19% of the worldwide corn shipments. Multiple countries are heavily dependent on these exports leaving these nations in deep trouble with the current crisis. Soaring energy prices are the following most critical consequence of the war. Russia is one of the world’s biggest energy suppliers, providing 14 percent of its crude oil and 9 percent of its natural gas. Higher prices for natural gas, a key ingredient for ammonia fertilizer, will increase costs for farmers and reduce crop yields, further exacerbating food shortages. The war comes at a difficult moment for the world economy, with countries still recovering from COVID-19. Read More.

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Penalties at heavily congested ports to keep cargo moving

Aging containers are most likely to be penalized at the Southern Californian ports. Los Angeles and Long Beach port officials say that the backlog of containers at the docks has reduced by half in six months since the announcement of the fee despite the enforcement being pushed back so far. Older container moving is a significant improvement in times of supply chain bottlenecks, including growing numbers of containers. The backup of container ships lined up waiting to get into Los Angeles and Long Beach ports has been cut by about two-thirds since January. The number of containers sitting at terminals for more than nine days has decreased from around 95,000 boxes in late October to approximately 37,500 last week. According to the Marine Exchange of Southern California, the number of ships fell to 29 vessels on May 12, the lowest number since last August and down sharply from the 109 ships that were lined up waiting for berths on Jan. 9. However, the container stacks and vessel backlogs remain high, and the port officials still can’t predict whether the snarls will return as the peak shipping season begins. Read More.


Apple claims 51% market share in the US

The United States is experiencing soaring inflation and despite the market conditions smartphones shipments reached a new high in Q1 of 2022. A recent report by Canalys states that the total volume of shipments grew close to four percent from the previous time last year. For North America, Apple dominated the market claiming a 51% share up by 19% from the previous year’s numbers. Learn More.


COVID lockdowns end in Shanghai in June

Shanghai is set to return to normal life and has decided to end lockdowns in June amid a sharp slowdown in China’s economic activity. However, this development doesn’t mean that shipping bottlenecks will ease shortly. The shortage of rail, port, and trucking workers in China and the US is a lingering issue and needs a quick resolution. China’s zero covid policy has disrupted global supply chains and halted the production and delivery of essential commodities, electronics, automobiles, and many other products. From Los Angeles to Hamburg, scores of container ships are waiting for weeks to berth at ports. A queue of 130 vessels is waiting at the Shanghai port. The number of container ships spotted in the Shanghai and Ningbo-Zhoushan region is still 11% above the median in the last year. Learn More. 

Sources: Bloomberg, IHS Markit, Genscape

Note: Container ship counts based on the number of vessels both in port and in the surrounding anchorage area at a speed of under 2 knots.


Realigning World Trade with Globalization 2.0

Global trade is facing adverse effects from The US-China trade war, Covid 19 pandemic, and Russia's conflict with Ukraine. The cumulative impact of these crises has caused enough friction between free-market democracies and authoritarian nations, thus causing a rift in the global economy based on geopolitical faults. There could likely be an accelerated reversal of globalization with the current market conditions, leading to lower economic growth and higher prices. Learn more about what Globalization 2.0 can mean for global supply chains here. Read More.

Source: Bloomberg Economics

Note: PPP weighted quarterly data


Scrutiny for Global Supply Chain Financing

The global economy is getting an injection of funds worth $700 billion that could grease the wheels of economic growth. Supply-chain finance, a type of short-term borrowing that operates off corporate balance sheets, has become common. The idea behind supply chain finance is that companies would be able to pay their suppliers in over funds. The US Securities and Exchange Commission recently summoned big enterprises like Coca-Cola and Boeing to reveal details of their hidden debt. Read More.


Indian Wheat Shipments are trapped at Ports

New Delhi recently banned wheat exports as parts of the country struggled from a severe heatwave that reduced output and escalated domestic prices. The sudden ban on wheat has stranded approximately 1.8 million tonnes of grain at ports, forcing traders to incur significant losses.

According to trade and government sources, India is considering allowing traders to ship out some of their wheat sitting at ports after a sudden ban on grain exports prevented dealers from loading cargoes. Many wholesale grain markets have also come to a halt because of the sudden ban. Domestic wheat prices have dropped by more than 4%, but the hasty decision has left transporters and traders frenzied as their trucks wait at ports to unload wheat. Read More.

Source: Reuters

SAP News

SAP Annual General Meeting

SAP announced on Wednesday that the Annual General Meeting of Shareholders of SAP SE approved all Executive Board and Supervisory Board proposals. Prof. Dr. h. c. mult. Hasso Plattner was re-elected with 90.48 percent votes, followed by Dr. Rouven Westphal with 97.35 percent, Dr. Gunnar Wiedenfels with 98.77 percent, and Jennifer Xin-Zhe Li with 75.76 percent.

SAP shareholders will receive a dividend of €1.95 per share in 2021 and a special dividend of €0.50 to commemorate the company's 50th anniversary. This brings the total dividend for 2021 to €2.45 (€1.85 the previous year). Thus, the total payout to shareholders will be around €2.87 billion.

Click here for an Overview.

Partner News

FourKites Hires Supply Chain Veteran in Europe

FourKites announced the appointment of Philippe Salles as VP Strategic Solutions, Ocean. Salles brings more than 25 years of experience to the company's International Solutions division, which has grown by 79 percent year over year. Furthermore, new customers can now expect to be up and running on FourKites' Dynamic OceanSM platform in five days or less, allowing them to see value almost immediately. Salles will collaborate closely with FourKites shippers and carriers to support the change management efforts. Furthermore, as part of the company's "Live in Five" commitment, he will help FourKites users reduce operational pain points and maximise the effectiveness of their systems. Read More.

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Related Content

Blog - Warehouse Order Creation Process and its Benefits

CLICK HERE

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CLICK HERE

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