Union dockworkers played a vital role in the US logistics network, moving massive cargo volumes amidst pandemic-led supply chain bottlenecks. However, the expiring labor contracts of 22,000 West Coast port workers in the summer will most likely cause problems in the recovery plans of the Los Angeles and Long Beach ports. LA and LB handle 42% of US containerized trade with East Asia.
Negotiations between ILWU and Pacific Maritime Association representing 70 employers for new contracts started on May 10th. These meetings aim to address the supply chain issues that have pushed LA and LB ports to the bottom of the World Bank and S&P Global Market Intelligence’s container port performance index. With increased discussions around port automation to drive port efficiency, union members perceive dangers to their livelihood. Read More.
U.S. President Joe Biden’s first presidential trip to Asia has yielded significant results, with Japan, India, and ten countries committing to the U.S.-led Indo-Pacific Economic Framework (IPEF). Along with these countries, Australia, Brunei, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam are included in the IPEF.
With this initiative, the U.S. hopes to engage Indo-Pacific countries economically to counter increasing Chinese economic and political influence. According to the White House, the Indo-Pacific region “supports 3 million American jobs” and is “the source of nearly $900 billion in foreign direct investment in the United States,” while U.S. FDI in the region totals around $969 billion in 2020. Also, the United States is the “primary exporter of services to the region.” Read More.
Increasing inflation impacts Asian clothing and gadget manufacturers with a slump in demand from global customers. Furthermore, China's stringent Zero-Covid policy and the Russia-Ukraine conflicts have exacerbated supply chain issues worldwide, and the Asian shippers are now bearing its ripple effects.
Manufacturers say that pent-up demand is shifting from purchasing goods to purchasing services while rising interest rates and inflation reduce discretionary spending. In April, the World Trade Organization reduced its forecast for merchandise trade growth this year to 3%, from 4.7 % previously. Also, according to PMI data, Asia's manufacturing sector contracted in April for the first time since June 2020. Read More.
Quieter Ports
Shipments from trade powerhouses in Asia lose steam
Source: Customs General Administration PRC; Ministry of Economic Affairs Taiwan; Korea Ministry of Trade, Industry & Energy
Due to burnout and a desire for more wages, supply-chain managers quit their positions at the highest rate since 2016. The high turnover rate corresponds to a worsening of supply-chain issues in 2021. Manufacturing plants were closed, ports were backed up, and transportation prices quickly rose due to the pandemic. These issues have primarily fallen on supply-chain managers to resolve, making their jobs far more complex.
“With increasing opportunities against the backdrop of the supply chain crisis, it comes as no surprise that supply-chain managers have increasingly sought out greener pastures,” said Kory Kantenga, a senior economist at LinkedIn. Know More.
Rising Vacancies
Job openings for supply chain and logistics managers have surged
Source: ZipRecruiter
Includes the average number of open job postings at any time during the month for the job titles
CNBC has created the Supply Chain Heat Map, a new data tool, with global top ten maritime and logistics data providers. This insightful tool highlights critical supply chain challenges and sheds light on inventory problems faced by companies.
China’s stringent COVID lockdowns have impacted Shangai port’s productivity significantly. The CNBC Supply Chain Heat Map clearly shows the impact of workforce shortage and the drop in port productivity, and long dwell times at the Shanghai port. Meanwhile, Shanghai's warehouses, trucking service providers, and ocean terminals continue to operate under lower efficiency due to the lack of a needed workforce.
While the Supply Chain Heat Map emphasizes the Chinese port performance, it clearly shows that the problems are not limited to this part of the globe. According to MarineTraffice and Blume Global Data, the Port of Oakland is the most congested, with vessels needing six days to unload and load. Import containers wait for nearly 11 days before being moved. The Port of Los Angeles has the second-longest wait period, over 12 days. The ongoing West Coast congestion has increased the cargo flow to the East Coast, and New York and New Jersey have significantly benefitted from the changing trends. Read More.
Shanghai is slowly regaining its footing after a grueling COVID lockdown that has caused havoc in global supply chains. Shanghai port has remained operational throughout, although at a significantly reduced capacity. Shenzen, another significant Chinese port, has also been disrupted by the lockdowns. The Ukraine-Russia war has increased product and service costs while also complicating goods movement.
According to the New York Federal Reserve’s global supply chain pressure index, supply chains are under unprecedented pressure related to rising freight rates, delivery times, and backlogs. The rest of 2022 looks difficult for global supply chains even if the Russian-Ukrainian conflicts ease and China return to normalcy.
In particular, for smaller businesses, a failure to adapt to the changing environment could threaten their survival. But there could be some hope for the coming period as supply chains focus more on resilience than cost-cutting initiatives. There’s a shift in emphasis on product quality and availability. Companies are increasingly diversifying their supplier base to reduce dependence on China. Nearshoring has become an essential consideration while deciding on sourcing strategies. Learn More.
SAP has designated May 31 as SAP Mental Health Day 2022, an additional fully paid day off for all workers, to recognise the impact. SAP has a long history of supporting mental health efforts, as seen by the current Are You OK? campaign. SAP Mental Health Day allows employees to focus on their own personal needs rather than their daily job routines. Having every SAP employee in the world take the same day off makes it easier to "switch off" as a group. This is an excellent opportunity for all employees to recharge, reflect, and take care of themselves. Know More.
SMC³ has been named one of Inbound Logistics magazine's Top 100 Logistics IT Providers for the 13th year in a row. SMC³ has been recognized due to its continuous innovation and authority in freight rating and supply chain technology. 
Every April, the editors of Inbound Logistics honour 100 logistics IT firms that support and allow logistics excellence. Inbound Logistics picks the top 100 logistics IT suppliers in 2021 from a pool of more than 400 organisations, based on questionnaires, personal interviews, and other research.
SMCÂł has won 19 times in total on the 2022 list, which was announced in April. Read More.