From materials to labor and logistics, managing supply chains has become an increasingly complex enigma that few brands are able to satisfactorily solve.
LOGISTICS
Walmart has joined Home Depot and others in chartering its own ships to ensure merchandise makes it to their stores.
The disruption in Ningbo was not as bad as feared, but has created a backlog in Ningbo and additional congestion at alternate ports in the region, according to Freightos.
Air cargo is facing challenges as well as outbreaks among ground handlers in Shanghai and other Chinese airports are resulting in cancelled flights and a lot of uncertainty.
Air cargo rates out of Shanghai have increased 15-25% to US destinations and 12-15% to airports in Europe.
SUPPLY CHAINS
The Eurozone’s “flash” composite purchasing managers’ index reading dipped slightly to a still-solid 59.5 this month, coming off a 15-year high the previous month. Any reading above 50 indicates expansion compared with the previous month, according to IHS Markit data.
- Hiring continued to surge across the eurozone, holding at the 21-year high reached in July.
UK economic recovery is being held back by record levels of disruption in supply chains, as backlogs and bottlenecks hit manufacturers and staff shortages slow growth, according to the Confederation of British Industry (CBI).
- The nation’s flash composite purchasing managers’ index (PMI) for August fell sharply to 55.3, from 59.2 in July, a six-month low.
- The number of companies reporting that shortages of staff and materials were hurting growth was a record 14 times the normal level, per IHS Markit data.
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MATERIALS
Cotton prices are now at 2018 peak levels of US$ 95 cents per pound.
- Brazil’s cotton index CEPEA/ESALQ Index is up 5.66% this month.
- Strong demand coupled with the low price (US$0.72 – $0.74 cents per pound) of Indian cotton in the international market pushed cotton exports to a 7-year high.
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