🔋 Electrifying Chip Dilemma
Good morning! Happy National Junk Food Day! 🍔🍕🍟
Indulge in a dose of deliciousness as we celebrate all things greasy, sugary, and oh-so-tempting. From guilty pleasures to guilty treasures, join us as we take a tasty detour into the world of supply chain snacks and the secret logistics behind our favorite guilty pleasures. Let's dig in! 🍩🍿🍫
——————
While the memory of the 2021-22 semiconductor chip shortage fades, the push for electric vehicles could bring about another shortage.
The automotive chip industry is a fraction of the larger semiconductor industry, and few manufacturers are investing in developing chips specifically for EVs. With the increasing demand for autonomous driving, connectivity, and electrification, supply chain complexities and limited production capacity pose challenges for the automotive industry's transition to EVs.
Check out today’s featured article from Supply Chain Management Review to read about the growing manufacturing capacity for EVs - will the semiconductor industry continue to splinter under the surging demand?
Photo by Pok Rie/Pexels
Featured Article:
As EV production ramps up, semiconductor supply chain concerns grow | Supply Chain Management Review
“With few companies making the specialized chips, work needs to be done to ensure smooth supply.”
Company Culture & Deliveries
Possibility of UPS Strike Triggers Changes in Logistics Sector as Negotiations Continue
Photo by Tiger Lily/Pexels
As negotiations between UPS and the Teamsters Union continue, the possibility of a strike is already having an impact on the logistics sector. While analysts say a strike is currently "possible but not yet probable," the risk will increase if the stalemate persists. The Teamsters are seeking more stable pay scales and higher wages for part-time employees, and with over half of UPS Teamsters being part-timers, the outcome of negotiations will have significant implications. UPS and rival FedEx have both begun making contingency plans, with UPS launching a business continuity training program and FedEx encouraging shippers to transfer their business preemptively.
Fuel & Ethics
FuelTrust Study Exposes Ethical Issues in Maritime Fuel Market, Leading to Billions in Losses
Photo by Johannes Havn/Pexels
FuelTrust, a start-up based in Houston, has conducted research exposing the lack of transparency and ethical issues in the maritime fuel market.
Their study reveals fraudulent practices, contamination, discrepancies, and unethical behavior in the bunkering industry. FuelTrust highlights that fuel-related problems can significantly impact ship operators' profitability, as fuel represents over half of a vessel's operating expenses. They estimate that fuel issues have caused losses exceeding $5 billion to the global supply chain, leading them to develop AI technology to assess and validate the fuel supply chain.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
Photo by foc foodoncam/Pexels
🇻🇳 U.S. Treasury Secretary Janet Yellen Highlights the Importance of Strengthening Ties with Vietnam. U.S. Treasury Secretary Janet Yellen emphasized the importance of strengthening economic and security ties with Vietnam during her visit to the country, as part of the United States' efforts to build relationships in Asia. Yellen highlighted Vietnam's role as a key partner in promoting a free and open Indo-Pacific and expressed the desire to deepen economic and security connections in the future. She also acknowledged Vietnam's significance as an export production hub for global manufacturers.
🌾 Wheat Prices Surge as Russia Attacks Ukraine's Grain Supplies. Wheat prices experienced a significant increase following Russia's actions targeting Ukraine's grain export infrastructure. The bombing of Ukraine's facilities and the declaration that grain ships bound for Ukraine could be military targets caused prices to soar on European and US stock exchanges. The disruption in grain supplies raises concerns about global food security and affects countries heavily reliant on Ukrainian wheat exports.
🚢 Former US and South Korean Officials Discuss the Need for Western-led Trade Pacts in Asia. During a panel discussion, former officials from the US and South Korea debated the necessity of having both the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Indo-Pacific Economic Framework (IPEF) in the Asia-Pacific region. While both frameworks aim to counterbalance China's economic influence, concerns were raised about the tangible trade benefits of the IPEF and the need for US engagement. The potential expansion of the CPTPP and China's interest in joining was also discussed as factors to consider.
iLevel With You 🏡
More topics for the average American household to consider…
🤝 UPS Negotiations Resume as Shippers Hope for Resolution on Part-Time Employee Pay Issue. Negotiations between UPS and the Teamsters Union have resumed after a pause, bringing hope to UPS shippers. The key point of contention has been part-time employee pay, and the union is determined to ensure their members are paid more than new hires. As the current national contract expiration approaches, UPS is making contingency plans, including training managers to deliver goods in case of a strike on August 1. Rival FedEx and regional carriers may benefit from a work stoppage, but industry experts warn that they cannot handle all of UPS's daily package volume, potentially leading to delays for shippers without alternative plans.
👨💼 Survey Reveals Organizations Implementing Office Etiquette Training to Foster Professional Workplace Culture. According to a survey by ResumeBuilder.com, organizations are responding to changing work environments and declining interpersonal skills by implementing training programs to create a more professional and respectful office culture. The survey found that 45% of business leaders are providing office etiquette classes for employees, with around 20% planning to implement such classes by 2024. Inappropriate dress and communication were identified as major problems, and the top skills addressed in the etiquette classes include making polite conversation, dressing professionally, and writing professional emails. The success of these classes suggests a positive future for workplace culture and highlights the need for ongoing adjustments in response to social changes.
🛍️ Consumers Maintain Solid Spending Habits, Setting Record Back-to-School Sales. A report from the National Retail Federation (NRF) reveals that consumers remain on solid footing despite the cooling economy, with retail sales in June showing positive growth. Back-to-school and college spending is expected to reach new records, driven by consumers seeking the best value and deals. Online sales, health and personal care stores, and electronics and appliance stores saw significant year-over-year growth, while the overall retail sales in June increased by 0.2% from May and 1.5% from the previous year.
😡 Yellow's Possible Insolvency and Teamsters' Opposition Raise Concerns for LTL Trucking Segment. The possibility of a strike at UPS and the potential insolvency of Yellow, a prominent less-than-truckload (LTL) trucking company, has raised concerns among analysts about the impact on the parcel and LTL segments. Yellow, which operates in the LTL industry with a significant presence, is facing financial challenges and resistance from the Teamsters union regarding its restructuring efforts. Analysts warn that a Yellow bankruptcy could disrupt the LTL market and lead to rate increases inconsistent with current trends.
🦺 U.S. Workplace Safety Regulator Implements Rule Requiring Electronic Reporting of Worker Injuries. The U.S. Occupational Safety and Health Administration (OSHA) has finalized a rule that mandates employers in “high-hazard” industries to electronically submit detailed data on worker injuries. The rule, similar to one introduced during the Obama administration and subsequently rolled back by the Trump administration, will take effect on January 1, 2024, and requires companies with 100 or more employees in designated hazardous industries to annually submit forms detailing safety incidents. While OSHA aims to use the data to enhance outreach and enforcement efforts, business groups express concerns about the disclosure of sensitive information and the potential for misuse.
📦 Amazon Offers Delivery Partnership to Main Street Businesses. Amazon is seeking to recruit 2,500 small businesses across 23 states in the US to participate in its "Amazon Hub Delivery" program, aiming to enhance package delivery capabilities. By partnering with local businesses such as florists, coffee shops, and gas stations, Amazon expects these businesses to earn up to $27,000 in additional income annually. The program offers flexible delivery schedules and requires no prior delivery experience, presenting an opportunity for small businesses to expand their operations and generate additional revenue.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
Photo by Tom Fisk/Pexels
🔎 Real-Time Supply Chain Visibility Empowers Shippers with Actionable Insights. Real-time supply chain visibility has evolved from addressing basic use cases to helping shippers understand the impact of ETAs and dwell times. Shippers now seek assistance with complex tasks such as optimizing labor scheduling, inventory planning, and risk assessment. By integrating data from multiple sources and extending visibility to upstream processes, companies can provide actionable insights that empower teams to make rapid and accurate decisions, avoiding costly disruptions and escalations.
🚛 On-Demand Freight Technology Can Be Leveraged to Tackle the Trucker Shortage. The delivery ecosystem in the U.S. is facing significant challenges that could threaten the sustainability of fast shipping services. Supply chains are still recovering from pandemic-related strains and the shift to e-commerce, while a trucker shortage of around 78,000 drivers (predicted to reach over 160,000 by 2031) adds further strain. To address the shortage and improve working conditions, the industry should leverage on-demand freight technology to create consistency, reliability, and better opportunities for truckers, allowing them to work flexibly and efficiently. Such technology can also benefit businesses by providing easier access to nearby trucks and ensuring speed and reliability for end-consumers.
🚚 There is Too Much Wasted Capacity in Truckload Shipping. A significant portion of shippers is uncertain if trucks leaving their warehouses are loaded to their maximum legal capacity, leading to wasted capacity due to sub-optimized load plans. A survey conducted among supply chain and logistics executives revealed that only 37% of respondents were certain about their load optimization practices. The use of software for load optimization was found to be low, with many relying on manual methods. Companies can benefit from addressing this issue by improving load quality, reducing freight costs, and achieving sustainability goals. By implementing technology solutions, such as load-building tools, businesses can optimize loads, ensure legal compliance, and minimize damage, leading to improved metrics and cost savings.
💸 Warehouse Rents Remain Resilient While Supply Chain Costs Decline, says Prologis CEO. The CEO of Prologis, the world's largest warehouse landlord, stated that warehouse rents will continue to rise even as other supply chain costs decrease. While transportation rates have dropped, warehouse rent hikes are moderating as the market returns to more normal conditions. Prologis expects rental growth of 5% to 10% across its portfolio this year, driven by rate increases and contract renewals, marking a shift from the exceptional growth seen in the previous years.
🚀 Raytheon's Wes Kremer Discusses Defense Contracts, Multi-Year Deals, and Co-Production in Europe. Wes Kremer, the head of Raytheon's defense portfolio, discusses the importance of securing contracts and multi-year deals to accelerate defense production and maintain supply chain stability. Kremer emphasizes the need for government support and funding, highlighting the lengthy process of contracting and the challenges of pricing and cost reduction in an inflationary environment. He also advocates for closer cooperation between the US and NATO to achieve interchangeability of defense systems, stressing the importance of co-production in Europe to maintain sovereign capabilities while achieving mutual benefits.
⬇️ J.B. Hunt Aims to Weather Freight Slowdown, Focuses on Customer Service and Cost Efficiency. J.B. Hunt, a transportation company, is planning to navigate through the current freight slowdown by remaining prepared to serve customers when demand rebounds. Despite the challenging market conditions, the company is focused on providing competitive pricing and assisting customers in reducing costs through route redesign and fleet optimization. J.B. Hunt is also investing in technology to drive efficiencies and maintain a disciplined approach to managing business and controlling costs.
💉 Healthcare Cold Chain Logistics Market to Grow at a CAGR of 9.0% by 2033. A recent report by Visiongain highlights that the global healthcare cold chain logistics market is projected to reach a value of US$17.8 billion by 2023, with a compound annual growth rate (CAGR) of 9.0% during the forecast period. The market is driven by factors such as the globalization of clinical trials, increased demand for temperature-controlled distribution services, and technological advancements in logistics. However, logistical challenges and the need to reduce the carbon footprint of cold chain processes present opportunities for supply chain innovation in the industry. Major players in the market include AmerisourceBergen Corporation, DHL International GmbH, and Kuehne+Nagel.
🌎 Companies Run Down Inventory as Transportation Demand Weakens. Recent reports indicate that companies are aggressively reducing their inventory levels, with safety stockpiles reaching just above the long-run average in June. The Logistics Managers' Index (LMI) Report highlights a contraction in inventory levels, while the GEP Global Supply Chain Volatility Index suggests weakening demand for transportation. Although there is a mismatch between capacity and demand, the stabilization of demand is expected to help companies right-size their logistics capacity in the future. While North America and Europe show signs of excess capacity and weakening input demand, Asia exhibits more resilience in purchasing activity.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 27, 2024, from iLevel Logistics Inc.