One-Third of Supply Chain Leaders Moved Business Out of China or Plan to by 2023

Manufacturing is on the move.  A survey by Gartner of 260 global supply chain leaders in February and March 2020 found that 33% had moved sourcing and manufacturing activities out of China or plan to do so in the next two to three years.

Results show that the COVID-19 pandemic is only one of several disruptions that have put global supply chains under pressure.

“Global supply chains were being disrupted long before COVID-19 emerged,” said Kamal Rman, senior director analyst with the Gartner Supply Chain Practice.

“Already in 2018 and 2019, the U.S.-China trade war made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks. As a result, a new focus on network resilience and the idea of more regional manufacturing emerged. But this kind of change comes with a price tag.”

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Source: Material Handling & Logistics

Need for speed drives ships toward Pacific ports

The battle for Asian containerized exports rages on between West and East Coast ports. The East had been steadily gaining ground, but COVID-19 is changing the balance in favor of the West, at least in the short term.

Taking share from air

The most immediate effect of the coronavirus, reported by FreightWaves in late March, was a shift from air cargo to premium ocean service.

Advantage West Coast ports. Former air-cargo shippers with time pressures don’t take the long route to the East Coast.

Nerijus Poskus, head of ocean at Flexport, presciently predicted the rise of premium services that offer guaranteed loading, faster ocean transits and priority discharge.

Matson (NYSE: MATX) and CMA CGM subsidiary APL offered premium services. Then Matson added extra sailings, and ZIM unveiled a new premium service — 12 days from China to California. The first ZIM ship arrives in Los Angeles on Saturday.

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Source: American Shipper

Risk Management Concern Rising at Ports as COVID Disruption Grows

The spread of COVID-19, and the economic and trade disruption the pandemic has caused, is prompting port managers to examine new ways to improve risk management and digital processes, according to a new survey by Remy InfoSource. TheThe 2020 iSpec Ports Industry Survey was undertaken during the height of worldwide economic lockdowns in the second quarter of 2020

It revealed that more than half (51%) of port executive respondents now identify risk management as the key area they would like to improve on in the future, up from 32% in the previous iteration of the iSpec Ports Industry Survey in 2018.

In 2018 the top two areas for improvements noted by ports and terminal executives were ‘shorter lead times’ and ‘more standardization’.

‘Risk management’ was also the leading reason pinpointed by respondents when asked to identify the most problematic issues they encounter when managing complex outsourced projects,”  said Pieter Boshoff, CEO of Remy InfoSource. ” In the 2018 iSpec Ports Industry Survey ‘tracking project compliance and delivery’ was the most problematic area identified by respondents.“I think it’s no surprise that in such an uncertain world the importance of risk management has increased dramatically.

“Disruption to supply chains has increased across the globe causing operational and investment uncertainty and, with social distancing rules, also changing the way we all conduct our business.

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Source: Material Handling & Logistics

Air cargo: ‘the madness has gone, it’s the new normal – but what’s next?’

Pockets of the air freight market are continuing to see high rates, and volumes are growing, but retail is not yet back in the air.

Hot spots include rubber producer Malaysia, the world’s largest exporter of medical gloves, accounting for up to 75%, according to some estimates.

Volumes out of Malaysia grew 46% in week 25, according to Clive Data Services, while forwarders have reported strong demand out of the country.

“We have seen an increase in demand from Malaysia, Thailand and Vietnam,” said  Lee Alderman-Davis, global product and development director for Ligentia.

“To meet this, we are now operating Ligentia air services every other day from Saigon, Bangkok and Kuala Lumpur.”

Clive’s volume data shows that Thai exports by air increased 20% in week 25, but there has been only a slight rise in Vietnamese exports.

Globally, volumes have risen, but at a slower pace than in previous weeks. There is a slowdown out of China, while capacity is also declining slightly.

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Source: The Load Star

Shippers being ‘held to ransom’ as blanked sailings and feeder problems bite

Changes to Asia-North Europe service networks, a knock-on from carriers’ aggressive blanking programs, are “playing havoc” with the container supply chain, according to industry stakeholders.

With both 2M and THE alliance members having suspended loops to October, carriers are merging itineraries or adding extra calls on remaining loops to cover commitments.

However, the resulting disruption for importers and exporters from changes in container pick-up and delivery points has added extra costs and more uncertainty to the supply chain.

Moreover, the carriers themselves are suffering from equipment shortages as containers are discharged or loaded at different ports.

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Source: The Load Star