The Friday Five: What does the power crunch mean for logistics?
A power crisis in Europe and Asia and desperation from global transport workers continue to fuel supply chain chaos. Plus, powerhouse Nike is still struggling and the toilet paper saga returns. Let’s get started!
The consequences of the power crisis for the supply chain [FreightWaves]
Like many other industries, energy supply in Europe and Asia is tightening due to a post-Covid demand surge. Apple supplier Foxconn already halted production in its Chinese facilities last weekend due to power shortages, with reports of outages in other facilities across the country. Delays in China could ripple on to U.S. imports, already on life support due to port congestion. However, the situation would mean opportunities for dry bulk shipping, with spot rates rising in parallel with a demand surge for thermal coal. Tanker shipping may also see a rise along with oil barrels, for the same reasons.
Open letter from workers warns of a "global transport system collapse" [CNN]
Seafarers, truck drivers and airline workers—who are crucial to keeping the supply chain together—have had enough. In an open letter to the leaders attending the United Nations General Assembly, the International Chamber of Shipping and other industry groups, representing a total of 65 million transport workers worldwide, called for the freedom of movement and priority vaccinations for workers. It also underlined labor shortages as the workforce leaves due to being treated poorly, further threatening the supply chain.
"Container haulage is f****d" [The LoadStar]
Forwarders in the U.K. have had enough, writes Alex Lennane for The LoadStar. In what is described as a “pay-to-play” environment because of high detention and demurrage fees, haulage costs, and additional costs for loading and unloading. Forwarders throwing money at it to solve the problem does not help. And with carriers opportunistically charging premiums for haulage, extra fees for storage, and only in some cases providing free times for failed bookings, the environment is described as incentivizing failure. Yikes.
Nike shortages on the rise amid supply chain turmoil [SupplyChainDive]
The time it takes for Nike to move products from Asia to North America has doubled from 40 to 80 days since the pandemic started. This has made the company unable to satisfy high customer demand. Inventory has been paralyzed by COVID-19 lockdowns in Vietnam and China, with months to come before output can return to standard. In the meantime, retailers will be looking to bypass delays and find suppliers outside of Vietnam.
Toilet paper crunch, again [Business Insider]
The pandemic restrictions may finally be lightening up around the world, but absurdity seems posed to be the new normal for a while. Take toilet paper. When the pandemic started, consumers infamously stockpiling this essential around the world became a running joke. Over a year later, some Costco shops are reportedly out of toilet paper again due to shipping delays and high demand. As a consequence, purchase restrictions have been reintroduced in some stores, though some haven’t waived them since 2020. Time to invest in a bidet.
In case you missed it, be sure to check out last week's logistics news roundup which explored the ongoing challenge retailers are facing to stock their shelves for the holidays. If you want to learn more about how Logistics Orchestration® by Slync.io can help you navigate the complexities of global logistics, just schedule a consultation. Until next time!
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