Supply Chain Strategist | Oct. 06, 2022

Capacity continues to increase in key ports; Materials prices remain weak; Frontline workers prioritized

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“Inventory levels have increased sequentially and are at the highest level relative to sales since the start of the pandemic.” – UBS Group analysts, in a widely quoted recent note.

LOGISTICS

Easing port congestion both in China’s hubs and at LA/Long Beach is effectively increasing available capacity – vessels leaving Asia for the West Coast are reportedly only about 70-80% full – and is combining with the continuing decrease in demand to push spot rates down especially quickly on this lane, per Freightos.

Long-term contracted rates fell by 1.1% in September, per Xeneta Shipping Index. It expects further decreases to follow.

In the UK Liverpool port workers are set to stage an additional week-long strike starting Oct. 11 in a dispute over pay, according to Unite, the union representing them.

Asia to US West Coast prices fell 16% to $2,516/FEU this week. This rate is still 88% higher than in October 2019, per Freightos.

SUPPLY CHAIN MANAGEMENT

The Importance of Diversifying, The Reluctance to Do So

The need to build resilient supply chains made more brands look at diversifying their sourcing programs. Yet, according to mills, there’s been a lot more talk than movement. Most say that only about 10-15% of their fabric orders are being delivered to manufacturers in alternative nations.

For brands, the deep relationships with suppliers that helped them navigate past few years of supply chain chaos, could be adding an increasing element of risk. READ MORE

MATERIALS SOURCING

Creating Beautiful Fabrics with Zero Waste

Turning agricultural waste into wearable fibers is getting a lot of attention, but making them into something that is also fashionable can be a challenge.

Today, many of those fibers are being blended with cotton to create yarn and fabric that is sustainable, and also has a special look and feel.

“Right now we are making fabrics that are cotton blended with pineapple, banana, bamboo, galangal, lotus, hemp and other fibers,” said Bandid Pongsarojanavit at S. T. Textile Co., Ltd. The company is mainly supplying brands in Japan and the EU.

They are also using some natural dyes made from tea, coffee, cinnamon and other plant-based materials. READ MORE

PODCAST

A Mindset Shift that Will Help Every Team Member Find Greater Fulfillment

If you’re wondering how a company can inspire people to change the world, then this is the podcast for you.

In this episode Dr. Akhtar Badshah, creator of Purpose Mindset Workshops, and author of Purpose Mindset: How Microsoft Inspires Employees and Alumni to Change the World talks about how small mindset shifts can make a big difference.

You’ll Learn:

The game changing value of focusing on who you want to serve as opposed to who you want to be.

How your values and mission combine to create your purpose.
Purpose Accountability: Why being transparent with your purpose is crucial.

Why we should prioritise being effective over being efficient.
Why doing things the right way might not be as rewarding as doing the right thing.

🎧 Listen to the podcast

MARKETS

Amazon (USA) is raising the average starting pay of frontline workers in customer fulfillment and transportation from $18 per hour to more than $19 per hour. Currently the same workers are earning $16-$26 per hour.

Tesco (UK) has said it plans to cut more than 300 head office jobs while raising pay for shop workers for the third time in 13 months.

MATERIALS

Oil price rose earlier this week after reports that OPEC+ agreed to cut oil output by 2 million bpd, the biggest production cut since the height of Covid-19 lockdowns, and double the volume cut previously flagged.

Materials prices overall inched down on weak demand.