Global supply chains are now witnessing changing patterns of consumer demand. Automobiles, engineering, and manufacturing are experiencing strong demand, whereas demands for retail and consumer goods may be dwindling. Flexport’s , Post-Covid Indicator tracks such trends and a potential return to pre-pandemic spending patterns. Consumer demand and spending patterns underwent a significant shift with the onset of the pandemic, especially away from services to more towards goods in the past two years.
The above graph clearly shows a sudden split in the spending on goods vs. services. With the onset of the pandemic and subsequent lockdowns, consumer spending on goods increased significantly and averaged 31.3% of the total in four years. The second stage of the lockdowns saw consumers spending on home goods augmented by the government income support.
The Flexport Post-Covid Indicator, launched in June 2021, indicates changing consumer spending patterns and estimates how these patterns may change in the coming months. Learn more about the changing dynamics of consumer spending behavior and its impact on logistics and supply chain industry here. Read More.
China’s lockdowns to contain new COVID infections are complicated for global supply chains. Chinese ports are operational during the lockdowns, but factories struggle to continue producing goods. Production facilities in and around Shanghai have halted production due to the extended restrictions in the city. So far, 161 Taiwanese companies have shut shop in the region. Pegatron, another Taiwanese company and a major supplier of Apple products, and Rober Bosch, a German company and auto parts and chip supplier, were the recent ones to bear the brunt of the lockdown. Logistics has become a complex challenge for companies operating under such strict restrictions. Additionally, truck drivers need to test negative within 48 hours to drive into Shanghai. Learn more about the challenges the businesses operating in the region here.
The current growth in the US Consumer prices is the highest since 1981. The Labor Department data showed that the consumer price index rose 8.5% since 2021, following a 7.9% annual gain in February. The prices in the US are surging exponentially among the Group Seven advanced economies, followed by higher energy, food, and goods and services costs. The Russian-Ukrainian war has significantly disrupted energy and commodity supply chains that have also propelled the prices of a wide range of products, from gasoline to grains. Read More.
The US-Mexico border is witnessing blockades called by the Mexican truck drivers protesting an order by the Texas governor that intends to increase safety inspections. The blockades are a growing cause of concern for businesses and an already constrained supply chain. Two major international bridges connecting the countries have been effectively shut down. The Mexican Government has rejected the imposed inspections. The following delays are expected to cause further shortages of perishable products over the upcoming Easter holidays.
The Mexican National Chamber of Freight Transportation has estimated the delays at the Pharr bridge alone caused economic losses of $8 million per day. On Wednesday, Governor Greg Abbott agreed to stop police inspections of commercial trucks on Laredo’s Colombia Solidarity Bridge but continue the inspection on other bridges. Read More.
The heaviest rains have hit South Africa in sixty years, bringing port operations to a standstill at its main port of Durban. The Port of Durban serves as South Africa’s biggest container hub and handles approximately 60% of South African shipments. It is also a critical gateway for freight movement to and from nations. The heavy rainfall is expected to continue for a few more days. Transnet, the South African logistics firm, has requested shippers to refrain from sending trucks to the ports to avoid congestion. One of the largest container lines, Maersk, has suspended its operations partially in the region. Shipping will only resume when it’s deemed safe for marine craft and vessel navigation. The circumstances seem to worsen for the nation and may likely cause more supply chain disruption in the coming days. Read More.
Trucking seems to be bearing the brunt of the fall in shipping demand, which is a significant change from the last year’s tight freight market when the massive rush by retailers to stock goods sent the industry scrambling for capacity. Spot rates have been falling, and freight volumes have slivered down. While inflation may be causing added strain on the ongoing supply chain constraints, the present circumstances clearly show the vulnerabilities in the US economic growth. China’s zero COVID policies may have impacted the decline in shipping rates. Still, in hindsight, the fall in global liquidity could soon direct towards depressed shipping rates. Read More.
SAP is set to release its full results for the first quarter of 2022 on Friday, April 22. CEO Christian Klein and CFO Luka Mucic will host a virtual analyst conference with live webcast presentations that cover financial figures from this past January through March as well an outlook about what's coming up in their current fiscal year which ends next month! Read More
The SAP Innovation Awards honor and celebrate the achievements of forward-thinking companies who have harnessed new technology to make an impactful difference in our world. To learn more about the SAP Innovation Awards, as well as the winners and finalists, or even participating in next year’s awards, visit the SAP Innovation Award website.
Project44 is excited to announce that Bart De Muynck has joined the company as its newest Chief Industry Officer. His expertise will help project 44 improve industry collaboration and engagement with customers, in order for them deliver on their product strategies based off of his market interactions. De Muynck joins project44 after spending the last eight years as a vice president and analyst at Gartner. Know More.
Transplace, a third-party logistics provider based in Texas has launched an initiative to exponentially increase the number of full truckload movements out their customers' shipments moving across North America. The program is Transplaces first major action since being acquired last July by Uber Freight for $2 billion USD. Know More.