Tech’s ‘Feature Creatures’
“Before using a product, people will judge its value based on the number of features it has. Only after they start using it do they realize more features can create unnecessary complexity and usability issues”. – Hiten Shah, founder of Crazy Egg, KISSmetrics, and Nira.
LOGISTICS
AP Møller-Mærsk has warned it could take months to reopen the Red Sea trading route.
Market demand is moving up for the second half of January and all ships are filling up, per Flexport.
Daily rates as of Monday for Asia – Mediterranean containers had increased by more than $1,000 to about $6,700/FEU as mid-month GRIs start to be introduced. Asia – N. Europe and N. America rate increases are expected to push prices up significantly this week as well, per Freightos.
As the Red Sea crisis continues, it’s now estimated for a vessel to take 2-4 weeks (round trip) depending on the destination, per Flexport.
Carriers should be able to establish an alternative to the Red Sea route that will keep containers flowing and avoid significant congestion. Post-Lunar New Year, transit times will remain longer but should become more predictable, and it is likely that prices will subside somewhat as well, per Freightos.
The disruptions and demand increases are putting enough pressure on prices that some shippers with long term ocean contracts are also facing surcharges and others may not be seeing all the containers moved, per Freightos.
The first week of 2024 saw a continued decline in worldwide air cargo tonnages, with significant declines noted particularly in shipments from the Asia Pacific to North America and the Middle East & South Asia, and within the Asia Pacific region, per Flexport.
INSIDE SOURCING
While consumer sentiment is more positive than last year, buyers and suppliers are somewhere between ‘hopeful’ and ‘concerned’.
Right now, one of the biggest concerns is the likelihood that interest rates will remain at current levels until mid year.
That will keep costs high at a time when brands and retailers are reluctant to raise prices at retail. Read more
PODCAST
Successfully Sourcing in India
Suddenly everyone is talking about India.
India has always had a lot in its favor – a huge population, domestic cotton, a strong textile sector for yarns and fabrics, and of course a legacy in apparel manufacturing.
But, it has almost as many challenges.
However, brands and retailers are now more motivated than ever to find ways to work with India.
In this podcast Dr. Stephen Patton, South Asia Director for Liverpool Department Store, a leading Mexican department store chain, talks about what he’s learned establishing a successful sourcing office in India.
One of Stephen’s zone’s of genius is his ability to see beyond the obvious. To understand market opportunities that many others overlook.
Even at only a year and half in, Stephen has already achieved impressive growth in setting up an India-based sourcing operation that is developing competitive new products for Liverpool.
You’ll Learn:
- What you need to know to work effectively in India.
- The timelines and benchmarks that you need to understand when sourcing in India.
- Sourcing opportunities in India that you won’t find anywhere else.
MATERIALS
Cotton prices remained stable as traders assessed the prospects for demand and supply.
Oil prices inched up, but remain well below their late September peak of $91/bbl, despite the conflict in the Middle East.
MARKETS
European Central Bank President Lagarde indicated a probable interest rate cut in the summer, but emphasized that caution is required as uncertainties persist
The US jobs market is tight, inflation is above target, consumer spending is holding up and recent Fed commentary suggests they are in no hurry to loosen policy. “As such we continue to favor May as the start point for interest rate cuts rather than March as the market currently favors,” said ING Bank.
US retail sales rose 0.6% month-on-month in December, above the 0.4% consensus. Clothing sales rose 1.5% and department stores reported a 3% month-on-month gain.
- Consumer spending could face headwinds as consumer borrowing costs continue to rise with credit card, personal loan and car loan borrowing rates all at 20+year highs.
China’s economy grew 5.2% in Q4, up from 4.9% in Q3, per the National Bureau of Statistics.
CURRENCIES
Bets that the US won’t cut interest rates until mid-2024 have supported a strong dollar against most leading international currencies.
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