New week, new problem. That seems to be the chorus for supply chain management in what has become an era of never ending, unforeseen ‘events’.
LOGISTICS
Traffic from Asia to the US West Coast continues to worsen with the number of vessels awaiting berths surging – an estimated 70 vessels at LA/LB and 150 waiting at Shanghai and Ningbo, according to Flexport data.
The US East Coast is now facing growing delays as the Port of New York and New Jersey this week reported the highest number of container ships waiting for berths all year as the port struggles to unload ships fast enough.
Asia to Europe rates have stabilized but carriers are overcommitted and are limiting booking acceptance or rolling shipments causing schedule reliability to be very low, said Flexport. The platform notes an “Extremely critical space situation.”
Indian Subcontinent (ISC) governments are exploring ways to incentivise carriers to support the ISC market where shortages of equipment are causing shipments to be delayed.
Reduced factory output from Vietnam (Covid-related factory closures) and China (power shortages) has pushed down rates to the US this week. Still rates are 300% about last year’s levels.
SUPPLY CHAINS
Global supply chains are at risk of collapse unless governments worldwide restore freedom of movement to transport workers and give them priority over vaccines, international business leaders have warned.
Delays in Vietnamese production amid sky-high consumer demand in North America could create a surge in volume when factories reopen.
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ENERGY
China’s National Development and Reform Commission (NDRC) formally urged railway companies and local authorities to expedite vital coal supplies to utilities as the nation grapples with extensive power cuts.
- 20 provinces are believed to be experiencing energy shortages that are causing factories to reduce hours or close completely.
- Stocks of coal used to generate electricity – held by the nation’s six biggest power-generation groups – stood at a record low of just 11.31m tonnes as of 21 September – enough to produce power for 15 days.
- Thermal coal futures in China hit an all-time high of $212.92 per tonne on September 29, raising costs for power producers.
TRADE AGREEMENTS
A special EU delegation is reviewing Sri Lanka’s adherence to its commitments on human rights, labor laws and environmental protection, as well as enforcement of the Prevention of Terrorism Act.
- The outcome of this review will determine whether the EU continues to grant Sri Lanka Generalized System of Preferences Plus (GSP+) status.
- The EU is Sri Lanka’s biggest export market.
MATERIALS
Cotton prices are at a ten year high, defying market fundamentals. Learn more
Price pressure remains strong for most raw materials, driven by strong consumer demand and extraordinary logistics costs.
CSR
Crystal International Group Limited (Hong Kong) is continuing to roll out COVID-related initiatives in the countries in which it operates to support its employees and their communities during the ongoing pandemic. Read more
SUSTAINABILITY
Lululemon (Canada) has signed a 15-megawatt virtual power purchase agreement for renewable energy from Enel Green Power North America’s Azure Sky wind project. This will help the brand meet its renewable energy goals by aggregating the electricity load across 100% of its 380 company-operated stores, six offices and five distribution centers in North America.
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