Weekly Supply Chain Pulse - 5

📰 Supply Chain Pulse | Weekly Edition – September 13, 2024

Your Go-To Source for Supply Chain Insights, Trends, and Actionable Advice

📊 Key Metrics

Staying competitive means keeping an eye on the data that matters most. Here are four supply chain metrics that we monitor and will provide updates on within each newsletter.

Drewry World Container Index (WCI):

Between last week and this week, the 40ft container shipping rate from Shanghai to New York declined by 21.18%—an extraordinary one-week decline. This sharp decrease may be due to reduced global trade activity, seasonal fluctuations, or improved supply chain efficiencies. Such a steep drop is unusual and signals a potential shift in market conditions. It’s worth monitoring closely as it could indicate broader changes in global trade and shipping dynamics.

DAT Truckload Freight Rate Index

This week, the DAT is reporting the national average Van Spot Rate to be at $1.99 per mile. This matches April’s rate, which was the lowest recorded rate in the past year.

Commodity Research Bureau (CRB) Index

This index is a basket of 19 commodities including energy, agriculture, and metals. It’s widely considered a leading indicator of inflation, economic health, and overall cost trends for goods across the market. An increase tends to signify an increase in economic activity while a decrease tends to signify a slowdown in economic activity.

Between last week and this week, we have seen an increase of about 2.64 points, or a 0.97% increase.

GEP Global Supply Chain Volatility Index

The GEP Global Supply Chain Volatility Index tracks global supply chain conditions by measuring factors such as demand, shortages, transportation costs, inventories, and backlogs. A positive value indicates stretched capacity and higher volatility, while a negative value shows underutilization and reduced volatility. In August, the index dropped to -0.37, marking the highest spare capacity of 2024. This decline reflects weakening global demand and lower procurement activity, especially in the U.S. and China. For businesses, this suggests lower supply chain pressures but hints at potential economic slowdowns.

🌍 Global Hot Topic: Conflicts in the Red Sea Region Not Dying Down Anytime Soon (Click To Read Article)

The Red Sea shipping diversions, combined with ongoing regional conflicts, continue to disrupt global shipping routes. Over the past 9 to 10 months, many major carriers have rerouted through the Cape of Good Hope, leading to extended shipping times and higher costs. This situation is compounded by other challenges such as potential labor strikes at East and Gulf Coast ports and additional tariffs. While the Panama Canal is expected to return to normal capacity soon, the broader shipping disruptions may persist for the foreseeable future, maintaining elevated shipping costs globally.

Why It Matters: Ongoing disruptions like this highlight the importance of resilient supply chains. Businesses reliant on timely imports and exports should prepare for potential delays and rising costs, making it crucial to seek alternative routes, develop contingency plans, or secure partnerships to minimize disruptions.

🇺🇸 U.S. CEOs Say Their Supply Chains Have A Resiliency Problem (Click To Read Article)

A recent survey of 3,000 CEOs from the U.K., U.S., and Europe shows that many business leaders are struggling with supply chain disruptions in 2024. According to Proxima’s Supply Chain Barometer report, 87% of U.S. CEOs see resiliency issues in their supply chains, while 96% are spending more time addressing these challenges. CEOs are turning to strategies like right-shoring, with 44% focusing on onshoring and 41% on nearshoring. AI initiatives are also in the spotlight, with 99% either using or considering AI for their supply chains.

Why it Matters: The report highlights the ongoing complexity of global supply chains, with CEOs balancing efforts to reduce costs, decarbonize operations, and integrate AI. These challenges emphasize the need for businesses to remain adaptable, and businesses should anticipate evolving strategies in supply chain management.

📈 Giorge’s Weekly Stock/ETF Pick

$RIO- Rio Tinto Group, headquartered in London, is one of the world’s largest mining and metals companies. They focus on the extraction of critical minerals like iron ore, aluminum, copper, and diamonds, which are essential to industries such as construction, technology, and automotive. $RIO offers a strong annual dividend yield of 7.03%, as of today. With their minerals playing vital roles in innovations like space exploration, AI development, and updated infrastructure, Rio Tinto is well-positioned for potential long-term growth.

• As always, it’s not about timing the market, it’s about time in the market

• Disclaimer: This is not financial advice or a recommendation for any investment. The content is for information purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

🚀 Why You Should Consider Ena Source

In today’s rapidly changing supply chain landscape, staying ahead is all about having the right partners. Ena Source specializes in helping small and mid-sized businesses navigate supply chain disruptions, find reliable suppliers, and implement strategic sourcing plans that drive cost savings and operational efficiency. With no upfront costs and a commitment to delivering measurable savings, Ena Source is your trusted partner in turning supply chain challenges into growth opportunities.

Let’s talk about how we can help—reach out to us today!

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