Trending Now

U.S. Railroad Industry Faces Uncertain Future Amid Economic and…

New Articles

PSA Singapore and Evergreen Marine Partner to Launch Joint Venture Terminal

global trade evergreen
Global Logistics, Global Trade Daily, News, Ocean Ports

PSA Singapore and Evergreen Marine Partner to Launch Joint Venture Terminal

Leave a comment

PSA Singapore (PSA) and Evergreen Marine Corporation (EMC) have announced a joint venture to develop a cutting-edge container terminal in Singapore, a move poised to strengthen global supply chain resilience and elevate operational efficiency. Scheduled to begin operations by the end of 2024, this strategic partnership ensures long-term terminal capacity for Evergreen’s rapidly growing global vessel fleet at one of the world’s busiest transshipment hubs.

Read also: PSA Singapore Boosts Capabilities to Tackle Global Supply Chain Disruptions

Advancing Operational Excellence and Innovation

This collaboration builds on the longstanding relationship between PSA and Evergreen Marine, emphasizing shared goals of operational excellence, digital innovation, and sustainability. The joint venture aligns with PSA’s Node-to-Network (N2N) strategy, which seeks to enhance supply chain connectivity and adaptability.

“Global trade fuels economic growth, connects communities, and drives markets,” said Mr. Ong Kim Pong, Group CEO of PSA International. “Through this partnership with Evergreen Marine, we’re reimagining how ports and shipping lines can synergize to ensure the seamless flow of trade.”

A Vision for Sustainable Growth

The partnership underscores Evergreen Marine’s focus on environmentally friendly shipping and high-efficiency terminals. “As we expand our operations, partnering with PSA allows us to create a terminal that aligns with our commitment to sustainability and operational excellence,” stated Mr. Y.I. Chang, Chairman of Evergreen Marine.

The new terminal will serve as a vital hub in Evergreen Marine’s network, reinforcing its presence in Asia and enhancing its global operations.

A Commitment to Collaboration

“This joint venture marks a new chapter in our partnership with Evergreen Marine,” added Mr. Nelson Quek, Regional CEO Southeast Asia at PSA International. “Together, we aim to meet the evolving demands of the maritime industry, delivering exceptional value and deepening our collaboration for long-term success.”

The joint venture exemplifies PSA and Evergreen Marine’s dedication to innovation, sustainability, and service excellence, paving the way for a more resilient and interconnected global supply chain.

global trade digital
3pls, Global Logistics, Global Trade Daily

Supply Chain Digital Twin Industry Insights: USD 8.7 Billion Revenue by 2033

Leave a comment

Introduction

The Global Supply Chain Digital Twin Market is experiencing, substantial growth, with projections indicating a robust increase in market size over the next decade. As of 2023, the market is valued at approximately USD 2.8 billion. This initial valuation sets the stage for significant expansion, driven by the increasing adoption of digital twins across various industries seeking to enhance their supply chain operations and decision-making processes.

Read also: AI in Supply Chain Industry Booms: USD 157.6 Billion Revenue by 2033

By 2033, it is anticipated to reach a valuation of around USD 8.7 billion and this  growth reflects a Compound Annual Growth Rate (CAGR) of 12.0% during the forecast period from 2024 to 2033. This impressive CAGR highlights the escalating demand for supply chain digital twins, as businesses aim to leverage advanced analytics and real-time data to improve efficiency, resilience, and profitability.

In 2023, North America emerged as the leading region in the supply chain digital twin market, securing over 32% of market share. The North American market generated approximately USD 0.8 billion in revenues in 2023, with significant growth anticipated throughout the forecast period.

A Supply Chain Digital Twin is an advanced digital model that replicates the physical aspects of a supply chain. This technology uses real-time data and analytics to simulate, predict, and visualize the supply chain dynamics, enabling companies to optimize their operations. By creating a virtual replica of the supply chain, organizations can test various scenarios and strategies without the risk and expense of disrupting their actual operations.

The Supply Chain Digital Twin market is witnessing a remarkable surge as industries increasingly recognize the need for sophisticated digital tools that enhance visibility and control over their supply chains. This technology offers a powerful solution for businesses aiming to streamline operations, minimize costs, and boost productivity by creating accurate simulations of their supply chains. 

By leveraging real-time data and predictive analytics, companies can foresee potential issues and adjust their strategies proactively, ensuring  smoother operations and better decision-making.

Key Takeaways   reveals that the software segment dominated the Supply Chain Digital Twin market in 2023, capturing more than 65% of the market share. This indicates a strong preference for software solutions that enhance supply chain visibility and efficiency.

Cloud-based deployment emerged as the preferred mode in 2023, holding over 70% of the market share. This trend underscores the growing adoption of cloud technologies, which offer scalability and flexibility to businesses.

Large enterprises held a significant market position in the Supply Chain Digital Twin market in 2023, capturing more than 65% of the share. This reflects the ability of larger organizations to invest in advanced technologies and leverage digital twins for improved supply chain management.

The manufacturing sector was identified as the leading end-user industry in the supply chain digital twin market, commanding over 20% of the market share in 2023. This highlights the critical role of digital twins in optimizing production processes and enhancing operational efficiency within manufacturing environments.

In 2023, North America took the lead in the Supply Chain Digital Twin market, securing a commanding market share of over 32%. This dominance reflects the region’s advanced technological infrastructure and the proactive adoption of innovative supply chain management solutions by businesses across various sectors.

Statistics

1. According to a survey report, the Value Chain Digital Twin by BCG X offers a client-centric solution that emphasizes a systems approach, combining customizable solutions, technology-agnostic architecture design, and a business-centric deployment strategy focused on delivering value. Notably, it has enabled a procurement team to automate 85% of its planning activities, showcasing its significant impact on operational efficiency.

2, As per a report by Relevent Software in May 2023, digital twins are proving to be a game-changer in the Supply Chain business landscape. They are capable of increasing revenue by 10%, accelerating time to market by an impressive 50%, and improving product quality by 25%.

3. By SUPPLYCHAINBRAIN special report, Digital twins  enhanced with AI capabilities, provide warehouse managers with the ability to make informed decisions using real-time data. By enabling the synchronization of different warehouse activities, digital twins empower managers to implement changes that can significantly increase warehouse productivity by 30% to 40%.

Growth Factors

The Supply Chain Digital Twin market is expanding rapidly due to several growth factors such as the increasing complexity of supply chains, fueled by globalization and diverse consumer demands, which requires more advanced management tools. 

Companies are recognizing the need for greater resilience against disruptions such as pandemics, natural disasters, and geopolitical tensions, prompting them to adopt digital twin technology. Also, advancements in IoT, AI, and big data analytics significantly enhance the functionality and accuracy of digital twins. 

Market Demand

The demand for Supply Chain Digital Twins is primarily driven by the need for greater supply chain resilience and adaptability. In today’s fast-paced and interconnected market, businesses face a multitude of challenges, including fluctuating demand, supply disruptions, and rapidly changing consumer preferences. Digital twins address these issues by providing a dynamic, detailed view of the entire supply chain, allowing companies to anticipate changes and respond with agility.

Opportunities and Expansion

There are significant opportunities in the market for developing more integrated and user-friendly digital twin solutions that can be easily adopted across various industries. As businesses from sectors such as manufacturing, retail, and logistics seek to optimize their operations, the demand for tailored solutions that cater to specific industry needs is growing.

The expansion of the Supply Chain Digital Twin market is set to continue as emerging markets are particularly promising areas for growth, where companies are beginning to invest in digital transformation initiatives. Also, as sustainability becomes a crucial consideration for businesses, digital twins provide an effective tool for optimizing resource use thus encouraging further market expansion.

Emerging Trends

The Supply Chain Digital Twin market is witnessing several emerging trends  such as the increased integration of IoT sensors, which are enhancing real-time data collection and visibility throughout the supply chain. 

These sensors are placed strategically across different points in the supply chain such as warehouses and transport vehicles to gather critical data like temperature, humidity, and location. This information feeds into the digital twin system, providing a more comprehensive view that supports predictive analytics and improved decision-making.

Another significant trend is the adoption of cloud-based solutions, which offer flexibility and scalability to businesses. Cloud computing enables real-time access and updates to digital twins from anywhere, which is crucial for managing distributed supply chains. 

Top Use Cases

Supply Chain Digital Twin Market is used to optimize transportation routes, modes, and schedules by taking into account factors such as shipment volumes, fuel costs, and vehicle availability. This enables businesses to redesign their supply chain networks to improve efficiency, reduce costs, and enhance responsiveness.

Digital twins aid in managing large numbers of personnel  which includes buyers, merchants, customers, finance departments, manufacturers, and agents​ involved in logistics by providing a unified view of the entire network, which assists in the planning and execution phases. 

By collating data holistically, digital twins help calculate the true cost of moving goods through the supply chain. This enables better operational decisions by evaluating trade-offs between different carriers, manufacturers, and routes.

Major Challenges

One of the primary challenges is integrating data from varied sources such as IoT devices, sensors, and enterprise systems. Ensuring data accuracy, consistency, and security is crucial for the success of a digital twin. 

Establishing robust data management tools and data governance policies are essential steps to overcome these challenges​. Implementing digital twins requires specialized knowledge in data analytics, IoT, and simulation modeling. Organizations may struggle to find and retain skilled professionals.

Business Benefits

In terms of business benefits, digital twins are pivotal in optimizing inventory management through advanced supply/demand forecasting. They allow companies to manage inventory more efficiently across a network of warehouses, reducing costs and improving service delivery times.

Also, digital twins aid in creating responsive supply chains that can quickly adapt to disruptions such as natural disasters by simulating different scenarios and formulating effective contingency plans​.

These technologies facilitate better coordination across various supply chain stakeholders, enhancing agility in planning and execution. They also play a crucial role in sustainability initiatives by enabling companies to measure and manage the environmental impact of their supply chain activities​.

Conclusion

In conclusion, the Supply Chain Digital Twin Market is poised for significant growth, driven by the need for enhanced operational efficiency and real-time data analysis in supply chain management. Digital twins offer a dynamic way to model supply chains, allowing businesses to optimize logistics, reduce costs, and adapt to changing market conditions more effectively. 

This technology supports critical functions from inventory management to transportation logistics, significantly reducing costs and improving efficiency across networks. As technology continues to advance, the adoption of digital twins in supply chains is expected to increase, leading to more innovative solutions and improved overall supply chain resilience.

About The Author

Ms. Manasi Pasalkar is Market Analyst at Market.us. With a professional certification in Market Analysis, she  brings  over  a  seasoned experience in market research and strategic consulting. Known for her meticulous approach, she has contributed to multiple projects, providing actionable insights that help businesses align their strategies with market trends and consumer demands. With a focus on driving digital transformation and enhancing connectivity, Manasi  ensures that the company’s offerings meet the evolving needs of both industrial and commercial sectors.

TT club terminal operations global trade shipping trade red sea houthi Hapag-Lloyd shipping leasing season ammonia shippers import
Global Logistics, Global Trade Daily, News

TT Club Urges Global Supply Chain to Address Rising Container Ship Fire Risks

Leave a comment

In response to a series of recent container ship fires, international freight and logistics insurance provider TT Club is calling for heightened awareness and responsibility across the global supply chain in the handling of dangerous goods. The past four months have seen four significant incidents involving container ships, two at sea and two in port, underscoring the urgent need for accurate cargo classification, packaging, and communication.

Read also: TT Club Stresses Ongoing Efforts to Prevent Container Losses at Sea

The tragic list of incidents includes the ‘Northern Juvenile’ in the South China Sea, the ‘Maersk Frankfurt’ in the Indian Ocean, and more recent fires on the ‘MSC Cape Town III’ in Colombo and ‘YM Mobility’ in Ningbo. According to TT Club’s Peregrine Storrs-Fox, investigations suggest that potentially explosive chemicals and fire accelerators, such as lithium-ion batteries, may have contributed to at least two of these cases. The incidents highlight the critical need for diligent cargo handling and communication at every stage of the supply chain to prevent these catastrophic events.

Although the average frequency of such fires over the past 30 years remains approximately one every 60 days, TT Club stresses that even one life-threatening event is too many. The organization notes that while two of the recent fires occurred while ships were berthed, allowing for a quick response from shore-side emergency services, incidents at sea can result in far more severe consequences, as seen with the ‘Maersk Frankfurt,’ where one crewman lost his life.

Accurate declaration of dangerous goods remains a significant challenge, with the IMO’s 2022 amendment to the ‘Guidelines for the Implementation of the Inspection Programs for Cargo Transport Units’ emphasizing the need for governments to inspect all cargo, regardless of its declared contents. However, recent findings from a small sample of inspections highlight ongoing safety concerns, particularly in placarding, marking, stowage, and documentation.

TT Club commends recent statements by China’s Maritime Safety Administration (MSA) that emphasize the responsibilities of both shippers and carriers. However, the organization warns that regulations alone are not enough and urges all supply chain participants to prioritize safety, due diligence, and clear communication to prevent future disasters.

global trade saudi
Global Logistics, Global Trade Daily, News, Uncategorized

Maersk Unveils SAR 1.3 Billion Logistics Hub at Jeddah Islamic Port: A Major Milestone in Saudi Arabia’s Global Supply Chain Ambitions

Leave a comment

Under the auspices of HRH Prince Khalid Al-Faisal bin Abdulaziz, adviser to the Custodian of the Two Holy Mosques and Governor of the Makkah Region, and with the attendance of HE Eng. Saleh bin Nasser Al-Jasser, Minister of Transport and Logistic Services and Chairman of the Saudi Ports Authority, Prince Saud bin Mishal bin Abdulaziz, Deputy Governor of the Makkah Region, inaugurated Maersk’s largest global logistics investment at Jeddah Islamic Port. Valued at SAR 1.3 billion, the event drew key figures from Saudi Arabia’s logistics and maritime sectors.

Read also: DMCC Strengthens UAE-US Trade Ties with Successful Roadshows in San Francisco and Denver

The newly launched logistics park is one of ten such facilities at Jeddah Islamic Port, funded by private sector investments. This initiative aligns with the Saudi Ports Authority and the Ministry of Transport and Logistic Services’ strategy to develop advanced logistics infrastructure in Saudi ports through partnerships with leading national and international companies. The park is set to enhance the efficiency of logistics services and boost operational capabilities, solidifying the Kingdom’s status as a pivotal player in global maritime trade.

HE Al-Jasser highlighted the robust support from the Custodian of the Two Holy Mosques and the Crown Prince for the transport and logistics sector. He noted that Saudi Arabia’s port sector is experiencing unprecedented advancements, marked by increased operational performance, record achievements in international metrics, and expanded maritime connections with countries worldwide. The sector has become an attractive destination for significant global investments, with foreign capital in the logistics domain exceeding SAR 10 billion. This influx of investment is driving economic growth, fostering knowledge transfer, and creating over 10,000 direct and indirect jobs, further positioning the Kingdom as a global logistics hub.

The Minister further explained that the new logistics park at Jeddah Islamic Port will play a crucial role in bolstering the Kingdom’s economic activity, providing high-efficiency logistics services to support trade and exports, and enhancing supply chain capabilities. He emphasized that with ongoing support from the Crown Prince, the transport and logistics system will continue to meet the ambitious goals of the National Transport and Logistics Strategy in alignment with Saudi Vision 2030.

HE Mr. Omar Hariri, President of the Saudi Ports Authority, underscored that the new logistics park represents a continuation of strategic partnerships between “Mawani” and major global and national companies. He highlighted the park’s contribution to the growth of the logistics services industry and its role in advancing economic and developmental activities by offering advanced, intelligent logistics solutions that facilitate exports and strengthen supply chains. These advancements are expected to lead to significant improvements in operational performance at Saudi ports, further enhancing the country’s logistics sector and global trade connectivity.

Spanning 225,000 square meters, the integrated logistics park includes facilities for the storage and distribution of general cargo, refrigerated food products, and re-export goods, as well as areas for Less than Container Load (LCL) cargo. It also features an e-commerce fulfillment center with high-density storage and innovative mechanical solutions, along with a specialized internal women’s academy. This academy aims to empower Saudi women by providing specialized training and employment opportunities, contributing to gender diversity in the workplace.

The park is equipped with an advanced warehouse management system, utilizing modern technologies and digital solutions for efficient inventory management, as well as state-of-the-art security measures to ensure the safety of the facility, its employees, and customer goods.

geopolitical global trade supply chain
Global Logistics, Global Trade Daily

How Geopolitical Forces Are Reshaping Global Supply Chain Strategies

Leave a comment
In recent years, geopolitical events have exposed the fragility of global supply chains. The pandemic, the Russia/Ukraine war, and the Israel/Gaza conflict have starkly demonstrated the vulnerabilities of supply lines. Designed primarily to minimize costs by leveraging low-cost labor and materials, these networks are easily disrupted by geopolitical events.
To better understand the dynamics reshaping global trade, TradeBeyond’s newly published “Retail Sourcing Report: Q3/Q4 2024 Insights & Indicators” offers strategic insights into how supply chains are adapting. For instance, the Middle East conflict has made the Red Sea shipping route unviable, forcing container ships to take the longer and more expensive route around South Africa’s Cape. Along with Asian Port congestion limiting container capacity, container shipping costs are pushing up toward pandemic levels.
Meanwhile, the Russia/Ukraine conflict has resulted in a reconfiguring of trade, with Russia discounting its plentiful energy exports to bypass sanctions and the decline of its important Europe markets. China and Russia have emerged as a powerful trading alliance, and a major challenge to U.S. economic and political hegemony. For Europe, high energy prices have accelerated the push towards cleaner energy.

Most interesting to watch are the large emerging economies such as India, Mexico, Brazil and the recently expanded BRICS alliance, a significant trading bloc, together accounting for over 37% of global GDP. To the consternation of the U.S.-Europe alliance, these countries are trying to stay neutral on political issues, but at the same are growing their bilateral trade with the Russia-China alliance. India is now the second biggest buyer of Russian energy exports and China is now India’s largest trading partner.

The report also extensively unpacks the impact of de-globalization and de-dollarization, two growing trends. Both U.S. competitors and allies recognize the risk of depending on the dollar and are increasingly using alternative trade settlement currencies. For Russia and China, this means the Chinese yuan. While the dollar is still a long way from being dethroned as the world’s trading currency, the long-term trend is clear that alternate currencies, especially the yuan, will become more important.
Strategic Responses to Geopolitical Shifts
While nearshoring and onshoring are still growing in the U.S., Mexico is now one of themost important U.S. trading partners. Also noteworthy is that Chinese manufacturing is staying ahead of geopolitics, with a substantial number of Chinese factories setting up shop in India, Vietnam, and Mexico to bypass tariffs.
This geopolitical reality has forced global supply chain executives to find alternatives, which in some cases means backpedaling from globalization. The degree of shift depends on the industry and region, but the overall trend is a steady shift away from the cost-driven dispersed global networks that evolved since the 1980s, to supply networks rooted in political alliances, which favor risk-mitigation over cost-savings.
The high value and strategically important global semiconductor industry is a case in point. With new U.S. and European protective tariffs on Chinese semiconductor exports (among other high-tech exports such as lithium-ion batteries and electric vehicles), the semiconductor market has become a strategic operational pawn in global supply chains. The U.S. Chips and Science Act provides over $50 billion in funding and subsidies for development of the U.S. semiconductor industry. As part of a larger $280 billion in science and tech funding, this measure is aimed at protecting and nurturing U.S. innovation and avoiding the chip shortages and supply bottlenecks which crippled the automotive and other industries during the pandemic.
At the same time, China is heavily focused on expanding higher value production in areas such electronics, chemicals, pharmaceuticals, and high-tech manufacturing. China has more than made up for declining exports of high value products such as semiconductors and electric vehicles to the U.S. and Europe with the expansion of exports to Russia and emerging economies in Asia and Africa.
The supply of raw materials used in the production of high value technology products, such as lithium, cobalt and rare earth materials are now also a strategic asset, much of which are controlled by China. With China restricting the flow of these raw materials, global supply chains of semiconductors and other products are less viable.
This all means that complex global supply chains that evolved to produce ever-cheaper made-in-China products make less sense. It also means that the inflated prices we are still experiencing for consumables, despite softening inflation, may be here to stay. At least in the near term, more secure U.S. and European supply chains come at a higher cost.
All these issues are discussed in greater detail in “Retail Sourcing Report: Q3/Q4 2024 Insights & Indicators.” This report covers a range of issues relevant to retail supply chain professionals, with detailed insights into the trends and challenges facing retail supply chains. Along with analysis of variables such as currency, commodity, and shipping trends, the report provides a detailed look at evolving regional markets, with forecasts based on expert research. As global supply chains adapt to new geopolitical realities, these kinds of actionable insights are more important than ever for supply chain leaders.
global trade CMA CGM-PSA JV will handle shipments of export cargo and import cargo in international trade.
Global Logistics, Global Trade Daily, News

PSA Singapore Boosts Capabilities to Tackle Global Supply Chain Disruptions

Leave a comment

PSA Singapore (PSA), a major global transshipment hub, has significantly enhanced its operations to manage increased activity and mitigate the impact of global supply chain disruptions since early 2024. This effort includes reinforcing its frontline capacity, commissioning new berths at Tuas Port, and reactivating berths and yard space at Keppel Terminal. As a result, the average wait time at the port has recently been reduced to two days or less. Despite ongoing disruptions, including the Red Sea situation, supply chain demand and impacts remain volatile. PSA is committed to supporting its customers through these uncertain times.

Read also: PSA Singapore opens Tuas Port

Since the start of 2024, PSA has faced strong berth demand and off-schedule vessel arrivals, leading to high concentrations of vessels on certain days and increased waiting times, despite utilizing all available berths. Larger call sizes have required vessels to stay longer, with extended transshipment container dwell times. This situation has been caused by factors such as the Red Sea crisis, which has indirectly reduced global shipping capacity, congestion at upstream and downstream ports, and shipping lines skipping ports to recover their schedules, resulting in significant changes in vessel arrival patterns and call sizes.

Ong Kim Pong, Group CEO of PSA International, stated, “As our flagship project, PSA Singapore is dedicated to meeting the challenges of ongoing volatility and aligning our port’s development and handling capacity with our customers’ needs. The Red Sea crisis has significantly disrupted global shipping and trade, and we expect this challenging situation to persist, potentially extending port congestion from Asia to Europe. PSA is building partnerships with customers and stakeholders through Node-to-Network initiatives to better coordinate between ports and enhance overall network efficiency. We are also expanding our port networks and ecosystems to grow our global presence and enhance cargo flows. By leveraging our facilities, supply chain capabilities, and our people, we remain committed to collaborating with our customers to address their unique needs in this changing global landscape.”

Singapore’s port has seen about 90% of container vessels arriving off-schedule, compared to an average of 77% in 2023. Additionally, vessel port stays at PSA have increased by 22% compared to the same period last year due to higher demand and container re-handling, where some containers are unloaded and reloaded based on discharge port, weight, and vessel stability.

Container re-handling on mega vessels berthed at PSA has increased by 8% in the first half of 2024 compared to the previous year, due to high vessel utilization caused by the Red Sea situation. This situation has led to extended vessel port stays, affecting the berthing time for incoming vessels, even as PSA maintains productivity.

Nevertheless, PSA’s proactive efforts and close communication with shipping lines and stakeholders have mitigated the impact of these disruptions. The PSA Singapore Management team has worked closely with unions, receiving strong support from the Maritime and Port Authority and Ministry of Transport of Singapore, ensuring a seamless port ecosystem.

PSA will continue to help shipping lines navigate service disruptions and optimize their network configurations, reducing berth waiting times and mitigating other impacts of ongoing disruptions, including vessel call diversions from congested ports in the region.

PSA moved 7% more container volumes in the first half of 2024 compared to the same period last year. Amid ongoing market volatility, PSA remains committed to long-term strategies, including enhancing capacity and capabilities through automation and smart technologies.

In addition to reactivating berths and yard space at Keppel Terminal, PSA’s Tuas Port currently operates nine berths and will add two more by the end of this year. Looking ahead, PSA plans to further expand Tuas Port and continue hiring frontline workers across all terminals, having already hired nearly 1,500 frontline workers in 2024 to boost operational capabilities.

Amid global supply chain disruptions, PSA has supported beneficial cargo owners and logistics service providers with value-added services to enhance supply chain visibility and expedite handling, mitigating the impact of delayed shipments. Initiatives such as priority discharge, expedited delivery, and fast connection management help stakeholders tailor solutions to their specific needs.

Despite the challenges, PSA remains dedicated to collaborating with all stakeholders, including government authorities, to enhance service excellence, reliability, and efficiency as operations scale up in the future.

“The congestion that we see today across many ports in the region is likely to be temporary. Singapore port operators are looking to mitigate the situation, which was unexpected and created by an extensive change in shipping routes due to the Red Sea crisis.  Singapore remains an important node to assist the liners in managing the supply chain disruptions.  Our Ports Performance database is showing shorter waiting times in June as compared to May.” – Mr Chris Rogers, Head of Supply Chain Research, S&P Global Market Intelligence

global trade EMS
Global Logistics, Global Trade Daily, Uncategorized

Dynamic EMS Navigates Geopolitical Turbulence to Strengthen Global Electronics Supply Chain

Leave a comment

Dynamic EMS, a prominent Electronics Manufacturing Service (EMS) provider, has emphasized the significant impact of recent geopolitical events on the global electronics supply chain, highlighting the challenges and opportunities these events present for British EMS companies.

Geopolitical instability, including trade disputes, sanctions, and regional conflicts, has dramatically altered the global electronics manufacturing landscape. British EMS firms like Dynamic EMS have had to rapidly and strategically reassess their supply chain operations to ensure the reliability and continuity of high-quality electronic components and assemblies.

John Dignan, Managing Director at Dynamic EMS, stated, “The past few years have been marked by unprecedented changes in the geopolitical climate. From tariffs and trade barriers due to the U.S.-China trade war to disruptions caused by the COVID-19 pandemic and Brexit, each event has profoundly impacted how we source, manufacture, and distribute electronic products.”

Dynamic EMS has identified several key areas affected by these geopolitical shifts:

Sourcing and Procurement

Supply chain disruptions have led Dynamic EMS to diversify its supplier base, increasing reliance on local and regional suppliers to mitigate future risks.

Cost Management

Rising tariffs and regulatory compliance costs have necessitated sophisticated cost management strategies, ensuring competitive pricing without compromising quality.

Regulatory Compliance

Brexit introduced new trade regulations between the UK and EU, requiring Dynamic EMS to adapt its operations to meet new standards and maintain critical market access.

Innovation and Adaptability

In response to rapidly changing global conditions, Dynamic EMS has accelerated investments in innovative manufacturing technologies and flexible production techniques, enhancing operational efficiency and market responsiveness.

A significant global response to these geopolitical challenges is the increased investment in semiconductor manufacturing capacities, particularly in the United States. Driven by national security concerns and a desire to reduce dependency on Asian supply chains, billions of dollars have been invested by semiconductor companies and the U.S. government. “These strategic investments in semiconductor infrastructure not only reshape the global electronics manufacturing landscape but also create new opportunities for collaboration and partnership for British companies like Dynamic EMS,” added Mr. Dignan.

Dynamic EMS remains committed to maintaining the highest production quality and customer service standards despite the turbulent global landscape. The company’s proactive approach to managing geopolitical risks underscores its dedication to operational excellence and customer satisfaction.

In conclusion, Dynamic EMS continues to closely monitor global events, ready to adapt and evolve to meet both the challenges and opportunities ahead. As the electronics manufacturing sector faces ongoing uncertainty, Dynamic EMS’s robust strategies and forward-looking leadership ensure it remains at the industry’s forefront, delivering reliable and innovative solutions to its clients worldwide.

global trade rates freight import
3pls, Global Logistics, Global Trade Daily, News

Ocean Freight Container Rates Soar Amid Global Supply Chain Disruptions

Leave a comment

Ocean freight container shipping spot rates are set to surpass levels seen during the peak of the Red Sea crisis, reaching heights not witnessed since the Covid-19 pandemic, according to the latest data released by Xeneta.

Read also: Freight Rates Are Ballooning to Pandemic Highs 

Peter Sand, Xeneta’s Chief Analyst, remarked, “The market has experienced rapid and dramatic increases in May, with further growth in spot rates expected. On June 1, we anticipate spot rates reaching levels unseen since 2022, when the pandemic severely disrupted ocean freight supply chains.”

Rapid Rate Increases

Spot rates have been climbing swiftly across various trade routes:

  • Far East to US West Coast: Rates are projected to hit $5,170 per FEU on June 1, surpassing the Red Sea crisis peak of $4,820 from February 1. This marks a 57% increase in May, the highest in 640 days.
  • Far East to US East Coast**: Rates are expected to reach $6,250 per FEU, nearing the Red Sea crisis peak of $6,260, reflecting a 50% increase since April 29.
  • Far East to North Europe**: Rates are forecasted to rise to $5,280 per FEU on June 1, up from $4,839 on February 16, marking a 63% increase since April 29.
  • Far East to Mediterranean**: Rates are anticipated to exceed the Red Sea crisis peak, reaching $6,175 per FEU, a 46% increase in May and the highest in 610 days.

Contributing Factors

Xeneta’s data highlights several factors driving the spike in spot rates, including ongoing Red Sea conflict, port congestion, and shippers frontloading imports ahead of the traditional Q3 peak season. Sand explained, “Businesses are shipping goods earlier to protect supply chains, contributing to market uncertainty. The situation is more nuanced now than during the Red Sea crisis.”

Efforts by ocean freight carriers to mitigate disruptions, such as increasing transshipments and re-aligning capacity, have led to severe port congestion and unintended consequences, exacerbating the rate increases.

Challenges and Optimism

While the spot rate hikes spell trouble for shippers, Sand offers a glimmer of hope. “The growth rate of spot rates in June is not as rapid as in May, hinting at a potential easing of the situation. However, carriers continue to prioritize high-paying shippers, causing issues for those with lower rates on long-term contracts.”

Freight forwarders face new surcharges and premium service pushes, leading to higher costs passed on to shippers. “The situation may worsen before it improves,” Sand warned, noting that carriers will likely continue pushing for higher rates.

In conclusion, the ocean freight container shipping industry faces significant challenges with escalating spot rates, driven by global supply chain disruptions. While there is some hope for stabilization, shippers must brace for potential further increases and ongoing uncertainty.

global trade supply chain
Banking, Global Logistics, Global Trade Daily

Resiliency, Wherever You Can Get It: Uncertainty In Global Supply Chains Is Going To Stay

Leave a comment

Citi has launched its latest Global Perspectives & Solutions (Citi GPS) report titled “Supply Chain Finance: Uncertainty in Global Supply Chains Is Going to Stay.” Its findings indicate that in an environment of stabilizing trade flows and cooling goods demand, disruption remains top of mind for businesses reliant on global supply chains.

Read also: Geopolitics, not Economics, is Front and Center for Global Supply Chains

The report, which follows 2021’s report titled “The Complicated Road Back to ‘Normal,’” draws insight from Citi Research’s propriety Global Supply Chain Pressure Index, trade flows and survey responses from multinational corporations and their suppliers globally.

As Citi’s premier thought-leadership product, Citi GPS is designed to help readers navigate the most demanding challenges and greatest opportunities of the 21st century. Citi accesses the best elements of a global conversation with senior Citi senior professionals, academics and corporate leaders to anticipate themes and trends in today’s fast-changing and interconnected world.

The Citi Global Supply Chain Pressure Index, outlined in the report, continued to ease on the back of a slowdown in global consumer’s demand for goods. Core goods inflation is expected to alleviate as heightened supply chain pressure has been a key driver of price pressure. The report cautions that while the decrease in demand is an important driver of loosening supply chain pressures, these developments are also a sign of mounting recessionary risks across countries and globally.

Citi Treasury and Trade Solutions (TTS) enables clients’ success by providing an integrated suite of innovative and tailored cash management and trade finance services to multinational corporations, financial institutions and public sector organizations across the globe. Based on the foundation of the industry’s largest proprietary network with banking licenses in over 90 countries and globally integrated technology platforms, TTS continues to lead the way in offering one of the industry’s most comprehensive range of digitally enabled treasury, trade and liquidity management solutions.

By analyzing the $4 trillion of average daily payment flow that TTS processes, the report finds that flows have largely stabilized after multiple disruptions in 2021 and early 2022. It is against this backdrop of stabilization, that Natural Resources and Clean Energy Transition (NRCET) trade flows grew 65% through the first three quarters of 2023 as energy prices soared globally.

“The pandemic and then the war in Ukraine demonstrated the fragility of supply chains. Many companies and customers experienced the pain of those disruptions and are now looking for resiliency wherever they can get it. While reshoring and nearshoring may seem like the next steps, buyers and suppliers alike indicate that the higher priority is resiliency or redundancy deeper into the supply chain,” notes Jane Fraser, CEO of Citi in her forward to the report. 

Citi and its research partner surveyed 2,327 global corporates for its Supplier & Large Corporate Survey as part of this report. This survey garnered powerful insights into the challenges facing companies large and small around the world, from which five themes emerged:

  • Rising prices and rising interest rates have had impact as corporates take steps to boost financial supply chain resilience
  • Corporates and their suppliers want to strengthen relationships and broaden their supplier base to mitigate further disruption
  • Pandemic disruption has given way to geopolitical tension as the primary threat to supply chain funding stability
  • Despite economic headwinds, respondents remain optimistic about the prospect for export growth
  • ESG remains an area of focus, but lack of clarity has impeded meaningful progress.

Chris Cox, global head of Trade and Working Capital Solutions at Citi said: “Given the impact from global events businesses have re-evaluated supply chain strategies. Notably, resiliency and continuity are taking center stage on sourcing through the production cycle. Another developing trend is the shift from ‘Just in time’ to ‘Just in case.’ Buyers are now building-in more resilience by purchasing earlier and holding more inventory. As a result, financing the end-to-end supply chain remains top priority.”

He continued: “How this trend plays out long term remains to be seen. Buyers, however, are focused on ensuring their suppliers have access to better and stable working capital solutions. Businesses are also accelerating the digitalization of supply chains. Digitalization enables ease of monitoring and management throughout the chain, enabling the robustness for any future disruptions.”

The digital copy of the report is available at tinyurl.com/ms64jvbt. 

Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in more than 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services. 

Additional information may be found at citigroup.com X: @Citi; YouTube: youtube.com/citi; Blog: blog.citgroup.com; Facebook: facebook.com/citi; and LinkedIn: linkedin.com/company/citi.  

 

tradebeyond global trade supply chain council
3pls, Global Logistics, Global Trade Daily

Geopolitics, not Economics, is Front and Center for Global Supply Chains

Leave a comment

Supply chain managers, long accustomed to weighing economic risks, are now confronted with geopolitical risks that are upending traditional sourcing and transportation decision-making. For the past three to four decades, companies have focused on finding reliable partners at the lowest cost. The natural destination was China, but the looming specter of higher tariffs coupled with a potential war over Taiwan is leading firms to alternative destinations. 

Read also: Supply Chain: Challenges and Key Solutions 

Factories in countries like Poland or Romania come with higher labor costs but minimal geopolitical hurdles. The shift away from China and other single country or region suppliers began to take shape during the Covid pandemic. Factory shutdowns, transportation delays, and rising shipping costs unnerved suppliers and further incentivized the search for new providers. In addition to international tensions with Russia and Iran, supply chains are squeezed with fewer and fewer options. 

The Houthi attacks on shipping vessels have slowed in recent months, but many containerships are still being re-routed around southern Africa’s Cape of Good Hope. If shipping through the Red Sea and the Suez Canal remains limited, elevated transportation costs will remain higher for longer. Emergent trade wars between the US, the European Union, and China are affecting markets worldwide as barriers to cheap Chinese imports, from construction equipment and steel to solar panels and electric vehicles, are growing.

China recently instructed the nation’s largest telecom carriers to phase out the incorporation of foreign chips into their networks over the coming two years. This tit-for-tat trade spat would affect major US chip makers such as Advanced Micro Devices and Intel. Last year, China contributed 15% to Advanced Micro Devices’ revenue, and while local Chinese chips are still considered inferior, they are slowly gaining ground, similar to electric vehicles.

Lastly, US and some EU compliance and regulations are also driving supply chain contingency plans. Volkswagen made the news earlier this year when its shipment of Lamborghini, Bentley, Audi, and Porsche vehicles was detained at US ports. Blacklisted suppliers from China’s Xinjiang region, where reports of Uyghur forced labor is occurring in the manufacturing of magnetic components used in high-end automobiles, were behind the detention. The compliance obstacle course expands by the day, placing supply chain managers in an unenvious position to monitor the ever-evolving maze of regulations.     

From a procurement perspective, disentanglement from China and Russia, especially with metals such as copper, nickel, aluminum, and similar rare-earth metals, is daunting. Russia is a leading supplier of the former, and China has the critical components that go into the manufacturing of US semiconductors. One area of agreement between President Biden and former President Trump is tariffs on vital Chinese imports. Tariffs will further complicate supply chains and likely lead to a continued restructuring of sourcing and transportation for years to come.