Samsung Shocker: Profit Plunge, Share Surge! 📈
Good morning! Welcome to the October 12th edition of "The Workday Dash," your go-to source for the latest updates and insights in the world of supply chain and logistics. As we dive into the heart of October, it's essential to note that this month is not just about falling leaves and pumpkin spice lattes; it's also National Cybersecurity Awareness Month. In this issue, we'll explore the critical role cybersecurity plays in the supply chain, along with other industry highlights and trends.
So, grab your coffee, and let's dash into the world of logistics and security. ☕️🕵️
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Samsung Anticipates 78% Q3 Profit Drop Amid Market Challenges, but Shares Rally
Samsung Electronics expects a significant 78% drop in operating profit for the third quarter, with revenue estimated at around 67 trillion South Korean won ($50.02 billion). This projection marks a substantial decline from the 76.78 trillion won in sales and 10.85 trillion won in operating profit reported during the same period last year. Despite this expected downturn, Samsung's Q3 guidance is slightly higher than analysts' predictions, who foresaw a 78.7% year-on-year decrease in operating profit. The company, known for being the world's leading memory chip manufacturer and a major player in the smartphone industry, has been facing a challenging demand environment and has implemented production cuts to address the situation. Nonetheless, SK Kim, executive director of Daiwa Securities, anticipates a "price recovery" for Samsung starting in the second quarter of 2024, emphasizing that geopolitical factors, such as the approval for Samsung to ship U.S. semiconductor manufacturing equipment to its China factories without separate U.S. approvals, could positively impact the company's capacity expansion in the medium term.
Despite the anticipated profit drop, Samsung's shares saw a notable surge of 3.16%, making it the top gainer on the South Korean Kospi and driving overall gains in the Asian market. The company's strategic measures, including production adjustments and potential capacity upgrades, are being closely watched in the volatile global semiconductor industry.
Check out today’s featured article from CNBC to learn more about why Samsung is seeing such a large drop in profit and what they are doing to improve its next quarter. Will their efforts help in the long run? How much more can they lose before they go bottom up?
Featured Article
Samsung Electronics expects third quarter profit to plunge 78% but shares surge | CNBC
“South Korean chip giant Samsung Electronics is expecting a 78% drop in operating profit in the quarter ended September, according to guidance released by the company.”
Army & Logistics
U.S. Army's New Cross-Functional Team Tackles Logistics Challenges for Modern Warfare
The U.S. Army's newest cross-functional team is dedicated to addressing critical challenges in logistics to adapt to the changing global landscape. Following Russia's invasion of Ukraine and recognizing the need to prepare for potential adversaries like China, the Army is focusing on sustaining the force in real-time, reducing logistics demands, improving supply distribution, and enhancing power provision on the battlefield.
This initiative involves multiple lines of effort, including precise data tracking to estimate equipment and resource needs, reducing demand through technologies such as hybrid energy solutions, improving supply distribution with a focus on autonomous resupply, and addressing advanced power needs and rechargeable battery standardization in the field. These efforts aim to ensure the Army's logistics capabilities are agile and efficient in contested operational environments.
DHL & Network Association
DHL Global Forwarding Assumes Full Control as Danzas AEI Emirates Brand Fades Away
DHL Global Forwarding is set to acquire the remaining 60% of shares in Danzas AEI Emirates, signaling the end of the Danzas AEI Emirates brand. This joint venture between Al Tayer Group and DHL Global Forwarding will be fully absorbed into DHL Global Forwarding's Middle East and Africa operations. The integration is expected to lead to shared management services, increased synergies, and improved efficiencies, ensuring a seamless collaboration. DHL has assured that there will be no impact on employees, who will become part of the DHL family, and the move is subject to approval.
Danzas AEI Emirates, with 1,200 employees and 20 facilities across Dubai and the northern Emirates, has been a significant player in the logistics industry, specializing in air, ocean, and road products, as well as customs brokerage. This move reflects Dubai's growing importance as a logistics hub, and the full integration into DHL's network is aimed at unlocking the potential to become a leading logistics provider in the region, according to Matar Humaid Al Tayer, vice chairman of Al Tayer Group.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
📦 FedEx Express Expanding with New Logistics Facility in Dublin, Ireland. FedEx Express is set to open a new logistics facility in Dublin, Ireland, strategically located in the Horizon Business Park south of Dublin Airport. Serving as FedEx's headquarters in Ireland, the facility will consolidate crucial operations, including pickup and delivery, aircraft operations, customs clearance, and more. With Ireland's substantial export volume of over €165 billion in 2021, this expansion underscores FedEx's commitment to a vital global trading market. The facility encompasses a sizable warehouse with environmentally friendly features, such as compliance with the Nearly Zero Energy Building (NZEB) standard, rooftop solar panels, and other sustainable design elements, emphasizing reduced environmental impact and operational efficiency. Construction is expected to commence in January 2024, with operations beginning in early 2025, pending planning permission approval.
🇨🇳 Xpeng Suspends Supply Chain Chief Amidst Corruption Investigation. Chinese automaker Xpeng has suspended its vice president in charge of supply chains, Li Feng, as part of a corruption probe. The company stated its strict stance against corrupt activities and emphasized its commitment to promoting ethical conduct and integrity. Xpeng's shares were up approximately 2% in pre-market trade following the announcement. However, the company's stock had previously fallen more than 10% due to concerns related to the conflict between Israel and Hamas, impacting investor sentiment. Xpeng has been facing challenges including rising competition and a price war in China, affecting its profitability, but its car deliveries have recently increased.
🩺 UPS Healthcare has introduced a healthcare logistics service in Europe. UPS Healthcare has introduced UPS Pickup Points in response to the growing need for efficient healthcare logistics. These Pickup Points offer a reverse logistics solution for healthcare facilities dealing with various specimens arriving from different locations with different schedules. They provide collection confirmation and visibility for time-sensitive specimens, streamlining the process for healthcare companies by reducing the number of collection sites and enhancing reliability, control, and the shipment of samples to central labs. This initiative aims to address the challenges posed by the increasing development of new medicines and improve the management of specimen logistics for healthcare organizations.
iLevel With You 🏡
More topics for the average American household to consider…
🇮🇱 War in Israel Disrupts Global Supply Chain Operations for Logistics Plus. The ongoing conflict in Israel is causing disruptions in the global logistics chain, with the closure of airspace over Israel and Gaza presenting challenges for the movement of goods not only to these regions but also to neighboring countries. Logistics Plus, which has offices in nearby Turkey and Egypt, is actively working to assist by coordinating with NGOs and medical organizations to facilitate the delivery of goods to affected areas. The company is collaborating with partners and government entities, including the U.S. and Israeli governments, to explore humanitarian logistics channels and ensure the efficient transport of aid to Israel amid the conflict.
👷🏽 Bolloré Logistics Inaugurates New Distribution Center in California. Bolloré Logistics USA has inaugurated a new 111,000-square-foot distribution center in Ontario, California, strategically located 50 miles from the Ports of Los Angeles and Long Beach. This facility, dedicated to the Luxury and Beauty industries, aims to enhance B2B and B2C customer service by reducing time to market and carbon footprint. The company's comprehensive services include White glove deliveries and last-mile deliveries. In alignment with its sustainability commitment, the distribution center is LEED-certified. Wayne Brohier, Ontario Hub Manager at Bolloré Logistics USA, expressed the company's ambition to expand its presence in the Western United States to support current and future customer demands.
👎 Pentagon Faces Challenges Due to 'Immature' Hypersonics Tech and Supply Chain Issues. Efforts by the Defense Department to accelerate the acquisition of new hypersonic weapons are being hampered by the underdeveloped state of the underlying technologies and the limited size of the industry supply chain. Chris Mills, Deputy Director at the Army Hypersonics Project Office, noted that hypersonic technologies and supply chains are still in their infancy, with significant investments made to improve hypersonic materials capable of withstanding high temperatures during hypersonic flight. The industry base for these technologies is small, and companies involved must be kept in business to leverage their capabilities effectively. Additionally, supply chains for related technologies, such as missile boosters and electronics, are facing high demand, causing supply challenges.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🇺🇸 First U.S. Weapons Reach Israel as Biden Condemns Hamas Attack as 'Sheer Evil'. The Israeli Defense Force has confirmed the arrival of the first plane carrying U.S. armaments in southern Israel, emphasizing the strong cooperation between their militaries. In response, Hamas's al-Qassam armed wing launched hundreds of missiles at the Israeli city of Ashkelon, citing the displacement of civilians as a motive. Israel's military regained control of the Gaza-Israel border after a significant attack by Hamas, leading to ongoing airstrikes in Gaza. The death toll from the violence has risen, with both Israeli and Palestinian health services reporting casualties. Biden condemned Hamas's attacks as "sheer evil" and emphasized the importance of upholding the rule of law during a phone call with Israel's Prime Minister Benjamin Netanyahu.
💻 Supply Chain and Email Attacks Pose Ongoing Threats to Healthcare Groups and Patient Care. Supply chain and business email compromise (BEC) attacks pose significant threats to healthcare organizations, with 77% of surveyed professionals reporting that supply chain attacks have disrupted patient care, according to a report by cybersecurity firm Proofpoint and Ponemon Institute. Business email compromise attacks, though less common, resulted in poor patient outcomes due to delayed procedures, complications, and longer hospital stays. Ransomware and cloud network compromises also negatively affected care. The report found that 88% of organizations had at least one cyberattack in the past year, with an average of 40 attacks reported. The cost of healthcare cyberattacks averaged $4.99 million, including direct and indirect expenses, with operations disruptions costing an average of $1.3 million.
📉 Warehouses Turn to Gig Workers to Address Labor Shortages. The gig economy is making its way into the warehouse sector, with logistics companies offering more flexible scheduling options and shift choices to attract labor amid stiff competition. Warehouse staffing agencies and logistics firms are utilizing software similar to platforms like Uber and Lyft to fill temporary roles during peak seasons. However, hiring gig workers for warehouse roles is different from ride-hailing services, as industrial jobs often require specific training and expertise. Companies like HapiGig allow employers to select from a list of available workers based on their qualifications and availability. A survey by industrial staffing agency EmployBridge found that 21% of logistics workers now have gig-type jobs, where they can choose their shifts, up from 15.1% in 2021.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 22, 2024, from iLevel Logistics Inc.