Weekly Supply Chain Pulse - 2

August 23, 2024 • Estimated Reading Time: 7 minutes

📰 Supply Chain Pulse | Weekly Edition – August 23, 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, we have only seen an increase of about 0.54% when looking at the 40ft container Shanghai to New York shipping route. It is good to see such a minor change but we still want to see these rates drop. We are now 128% higher the average rate in January!

DAT Truckload Freight Rate Index

The DAT is reporting a 0.6% decrease in cost for Van Spot Rates from the previous week. That takes us from $2.02 to $2.01 per mile including fuel surcharges. Nice, a whole cent!

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 and overall cost trends for goods across the market.

Fluctuations in the CRB Index impact production costs for a wide range of industries, from manufacturing to food production. Monitoring this index helps businesses anticipate price changes in products to adjust their strategies accordingly. If the index is rising, costs across your supply chain are likely to follow, signaling a need for strategic planning. If the index is decreasing, it may signify a slowdown in economic activity. Between last week and this week, there was only a 1.93 point decrease (0.695%).

Annual Benchmark Revision to Nonfarm Payrolls

Instead of sticking with all of the same charts every week, we will change the last chart weekly to give a more well rounded view.

So what exactly does the nonfarm payroll growth chart exactly track? It tracks the monthly changes in employment across all sectors of the U.S. economy except farming, government, private households, and non-profit organizations. It serves as a key indicator of economic health, reflecting job creation and broader business activity. Economists, business owners, and policymakers rely on this data to gauge labor market strength, which in turn influences decisions on spending, investments, and interest rates.

The Labor Department revised its nonfarm payroll growth down by a significant 818,000 jobs over the past year, marking the largest downward revision since the 2007-2008 financial crisis. Typically, annual revisions are around 0.1%, but this correction was five times larger at 0.5%. This correction suggests the labor market may not be as resilient as initially believed, potentially affecting economic decisions for both individuals and businesses. For everyday people, it highlights possible slowdowns in job availability and wage growth. Business owners may need to reassess hiring plans, adjust pricing strategies, or reevaluate supply chain management based on potential shifts in consumer demand.

The August edition of the ITS Logistics US Port/Rail Ramp Freight Index emphasizes the ongoing challenges facing ocean shipping and the broader supply chain. The report highlights critical issues such as severe bottlenecks in Southeast Asia, a shortage of vessel space, and increased container costs, which could lead to a surge in container traffic later in Q3 and early Q4. Notably, the explosion at Ningbo Beilun’s Phase III Terminal in China will likely disrupt transpacific trade lanes, impacting global supply chains. Additionally, the possibility of tariff increases under a potential Trump administration has shippers strategizing preemptive inventory pulls.

Why It Matters: For businesses relying on international and domestic supply chains, staying informed of these shifting dynamics is key. At Ena Source, we proactively navigate these challenges by leveraging our vast network and expertise, ensuring our clients’ supply chains remain resilient, cost-effective, and secure amidst such disruptions.

🇺🇸 U.S. Hot Topic: Canada orders a third party to mediate a labor dispute between railways and employees

The recent Canadian railway strike revolves around ongoing disputes over wages, working conditions, and benefits between unions and rail companies. Government intervention has temporarily halted the strike, with operations expected to resume soon, though no clear timeline is provided. The severity of this strike lies in its potential to paralyze supply chains, given that Canadian railways are crucial for the flow of goods across North America.

Why It Matters: The strike underscores the fragility of North American supply chains and highlights the need for businesses to proactively prepare. Ena Source can help mitigate these risks by securing alternative logistics routes, diversifying suppliers, and ensuring stable product flow even during items of uncertainty.

📈 Giorge’s Weekly Stock/ETF Pick

$VTI- This is another pick that is a key part of a strong foundation. A pretty boring ETF but one that everyone should consider being in to strengthen their foundation. Talk about diversification, this tracks the performance of the the WHOLE U.S. stock market, including large, mid, small, and micro cap stocks. This has a relatively low expense ration as well. Year to date, it has produced a 16.84% return!

  • 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!