The question many people are asking: ‘Is this product actually sustainable or just more sustainable than its competitors?” The answer is not always that simple.
How Sustainability Has Made Supply Chains More Resilient
With consumers, governments and other stakeholders demanding that companies pay more attention to the size of their carbon footprints, the burden has fallen onto sourcing teams to meet those demands and help achieve these sustainability goals.
Companies now realize that their sustainability practices contributed to the “resilience of their value chains” and helped them endure the COVID-19 crisis, according to a recent study.
In the past year, 81% have increased their commitment to sustainable procurement.
While supply chain objectives may be clear, achieving them remains a significant challenge for many companies.
A Shift in Priorities; A Weak Link in the Chain
LOGISTICS
Asia to Europe is now facing an “Extremely critical space situation,” according to Flexport data. The situation is worsened by blank sailings and overcommitted carriers who are limiting booking acceptance or rolling shipments.
Congestion charges look set to become a permanent fixture on Europe’s inland waterways, as the logistics sector battles back from the havoc wrought by July flooding, according to LoadStar.
As bulk carriers start to take on containers, insurance companies cautioned that modifying bulk carriers to carry containers could constitute a change of use and could undermine claims should there be accidents, according to LoadStar.
The big retailers are now not only chartering ships, they are also chartering flights, with availability of aircraft becoming scarce.
Air cargo rates to the US hit new record highs, topping $10 per kg to the West Coast this week, at $11.50 to Chicago and $12 to $13 per kg to the East Coast as orders delays due to Covid forcing buyers to airfreight products.
Air Cargo rates rose 112% from pre-Covid levels in August, following a local lockdown in Vietnam and the cargo handling problems at Shanghai, according to Clive Data Services.
The spread of the Covid-19 Delta variant in South-east Asian countries has caused significant disruption to manufacturing, and many buyers are having to airfreight their products to reduce the lead time it takes to get the stock to market.
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TRADE AGREEMENTS
Cambodia-Korea free trade agreement (CKFTA) negotiations were wrapped up in February, the deal looking to be signed next month.
MATERIALS
Aluminium surged to its highest level in 13 years this week, with concerns about the effect of the coup in Guinea – a major producer of raw material bauxite – on already limited supply.
Cotton prices are expected to remain high for the next 6 to 12 months, driven by strong consumer demand.
In Pakistan, increases in cotton prices and electricity rates are pushing cotton yarn prices to a 10-year high.
Brazil’s CEPEA/ESALQ Index for cotton increased by 7.9% during the month of August.
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