September 2021

Editorial

September 2021 - the pre-eminent global supply chain trend is “shortage”. Limited availability of ocean freight has led to a surge in shipping costs. Limited capacity continues to drive the cost of air cargo higher as shippers seek viable alternatives. Longer shipping times and port delays are causing a shortage in container supply, with many well-known brand names investing in container supply. Much to the dismay of consumers, landed costs of goods are now on the rise. The semiconductor chip shortage continues to shock manufacturing, with no sectors left unscathed. Originally catalysed by an exponential rise in demand for 5G technology, and compounded by geo-politics, companies such as Intel have recently announced significant investment in new chip capacity. Unfortunately, these actions are taking place amidst a global pandemic that continues to rage, despite improvements in vaccination rates being reported in many nations. Chip supply shortages has led to a surge in the cost of chips! It is not clear when the shortage will dissipate, in the meantime suppliers of chips are quoting lead times of 12 to 18 months!

While memories of Brexit debates fade, the fallout continues, the latest being a shortage of trained truck drivers. Well-known brands such as Ikea, Coca-Cola, are reporting raw material delivery shortages. Heightened regulations in a post-Brexit Britain, has created complex bureaucratic barriers that drivers must navigate to legally drive in the UK. Interestingly, Bangladesh too – where China has made significant infrastructure investment through its “Belt and Road Initiative” or “BRI” - is also experiencing a trucker shortage. the IFC – a member of the World Bank Group, with a focus on private companies - has recently invested $2.5 million - in the trucking platform - Truck Lagbe - to maintain critical supply chains during the on-going pandemic.

Lock downs continue to drive growth and interest in E-commerce. Is it possible that start-ups in this area could really threaten the dominance of FedEx and UPS duopoly? GEODIS – ranked 12 in Armstrong & Associates top 50 3PL logistics providers, has announced plans to extend logistic services to the US with a focus direct-to-consumer brand fulfilment. Amazon has announced the launch of its 5th location in India – where appetite for E-commerce solutions continue to rise – This fulfillment center will be in Bengaluru.

September marked the completion of the “merger” between Agility Logistics (28th on the A&A 3PL listing) with DSV Panalpina (5th on the A&A 3PL listing) creating a company with a combined revenue of $22 Billion - 3rd on the A&A list in terms of size, behind DHL and K&N -

While Haiti is back in the news in 2021 for Earthquakes, Tropical storms, Political Turmoil, and International displaced migrants (IDMs) on the US border in Texas, its neighbour the Dominican Republic (DR) continues to improve its WEF GCI (global competitiveness index). As of 2019, the DR’s GCI was 78/141 up four from the previous year. The proximity to the US and government stability continues to drive foreign investment, despite the Pandemic and African Swine Flu outbreak. The president of the Dominican Republic - Luis Abinader has announced that tourists visiting to the country, are entitled to free medical care!

Finally, sustainable manufacturing, automation, micro-mobility devices, building business resiliency, the importance of sales and operations in a post-pandemic era and the implications of just-in-time supply chains in a “pandemic” are topical this month.