China’s largest warehouse operator forms joint venture to build logistics infrastructure in Vietnam

Dive Brief:

  • SEA Logistic Partners, a logistic facility developer and operator in Southeast Asia, and GLP, the largest warehouse operator in China, are partnering on a joint venture to invest in and buildout logistics infrastructure in Vietnam, the companies announced Thursday. The companies plan an initial investment of $1.5 billion, according to Nikki Asian Review.
  • The project begins with a focus on building in Greater Hanoi and Ho Chi Minh City, and includes plans for three logistics facilities. One of the first clients will be Jusda, the logistics subsidiary of Foxconn Technology Group, according to the press release.
  • “With a young and skilled workforce, strategic geographical location and supportive government policies on investment, Vietnam is poised to benefit from further diversification of the global supply chain and manufacturing, which will fuel demand for logistics infrastructure to support operations of local and global companies,” Chih Cheung, a founding partner of SLP, said in a statement.

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Source: Supply Chain Dive

Despite Volatility 3PL eCommerce Business Flourishes

Ecommerce continues to be the most rapidly growing third-party logistics (3PL) segment as retailers rely on Amazon and third-party logistics providers to help manage omnichannel and eCommerce operations.

As 2020 as e-commerce purchases continue during the pandemic and companies continue to outsource versus build internal fulfillment operations, U.S. 3PL e-commerce revenues reached $43.4 billion in 2019 and expect a 28% CAGR through 2020, according to a new report.” VOLATILE – Latest Third-Party Logistics Market Results and Predictions for 2020 Including Estimates for 190 Countries” from  Armstrong & Associates, Inc.

With COVID-19 stay-at-home orders and business shutdowns, Value-Added Warehousing and Distribution (VAWD) had significant growth in business-to-consumer (B2C) e-commerce fulfillment activity during the first half of 2020, while business-to-business (B2B) activity waned. The overall impact for the first half of 2020 was a VAWD gross revenue decline of 7.1% and a net revenue decrease of 5.8%. Q3 and Q4 should see incremental increases as the economy continues to comeback in spits and spurts, and as VAWD customers rush to restore inventory levels.

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Source: Material Handling & Logistics

Retail Imports to See Lowest Annual Total in Four Years

Imports at major U.S. retail container ports during 2020 are expected to see their lowest total in four years as the impact of the coronavirus pandemic on the U.S. economy continues, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

“The economy is recovering but retailers are being careful not to import more than they can sell,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Shelves will be stocked, but this is not the year to be left with warehouses full of unsold merchandise. The more Congress does to put spending money in consumers’ pockets and provide businesses with liquidity, the sooner we can get back to normal.”   

U.S. ports covered by Global Port Tracker handled 1.61 million Twenty-Foot Equivalent Units in June, the latest month for which after-the-fact numbers are available. That was up 4.9% from May but down 10.5%year-over-year. July was estimated at 1.76 million TEU, down 10.2% year-over-year.

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Source: Material Handling & Logistics

Retail suppliers are still under strain — and it could hurt everyone

The retail supply chain, like the retail industry itself, has gone through a dramatic period of stress since March.

The early months of the COVID-19 crisis brought ubiquitous order cancellations. Almost as pervasive were retailers’ efforts to push out payments for shipments. In turn, the cash flow crisis in retail hit suppliers just as hard. Businesses furloughed employees, negotiated with landlords and other vendors, and wondered if they would be able to stay in business, just as retailers did.

Today stores have reopened in most areas and orders are coming in — which is crucial for both retailers and vendors — but suppliers’ financial woes persist.

The closures brought a liquidity crisis, one that hasn’t fully been resolved but has been eased by the reopening of physical stores. Now the supply chain is trying to work through potential credit and finance shortfalls that are exacerbated by longer payment terms, which have become a permanent feature of business for some.

For the full story, please click HERE

Source: Supply Chain Dive

Rise in US manufacturing suggests a road to recovery – but stay cautious

The US economy appears to be on the road to recovery, judging by the improvement in manufacturing in July and rising export orders.

However, pundits caution operators to adopt a flexible stance, as the trajectory of the pandemic could lead to decline in the short term.

Data released by the Institute for Supply Management (ISM) show that the US Purchasing Managers Index (PMI) for July climbed for the second month in a row, after a three-month decline, to reach 54.2 (with a reading of 50 or higher indicating growth).

It was up 1.6% over June and 5.6% higher than the 12-month average of 48.6.

Only three of the 18 manufacturing sectors tracked by ISM suffered contraction in July – transport equipment, machinery and fabricated metal products. Two categories tracked sideways, while 13 showed growth.

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Source: The Load Star