Global Supply Chain Review: December 2017

Global Supply Chain Review: December 2017

2017 is winding to a close, and the supply chain stories on our radar will undoubtedly flow into the rapidly approaching new year. Before moving ahead into 2018, here is our overview of the important supply chain stories we’re keeping an eye on in December…

 

U.S.: Though it’s hard to choose a story here, transport is on our minds. With strong economic growth this past quarter, purchasing and shipping have increased and freight companies will be on the lookout for more drivers in 2018. In what we anticipate to be a truckers’ market, pay is going up as companies search for qualified workers who can help meet demand. Tech will also play a role in how freight operates, with DHL’s pilot program with Tesla being only one example of how green transport is expanding.

 

Mexico: Despite ongoing debates about NAFTA and border walls with the US, Mexico’s travel and tourism sector continued to boom this year. Hotel, convention center, and event related supply chains and infrastructure are growing and thriving; and the Mexico Tourism Board announced a 6.7% growth from last year.

 

Canada: Meanwhile, debates about NAFTA are also of concern to Canada. Mounting tensions between trading partners Mexico and the US raise questions for how Canada’s supply chain will be affected; after all, Canadian companies employ over 72,000 workers and hold assets worth over $59 billion. Offices in both countries are seeking to facilitate continued business operations, and to advise new companies on whether establishing warehouses and infrastructure is best accomplished now or after NAFTA’s long term fate is determined.

 

E.U.: Following the Paris Climate Accord, the EU now faces the long term challenge and the short term bench marks of curbing emissions across its supply chain. Pressure from consumers—and Millennials in particular – has also become a driving force in the process.

 

U.K.: Brexit, Brexit, Brexit. No review would be complete without a monthly update on the UK’s separation from the European Union. While economic projections are still being compiled, experts are suggesting a swift rise in consumer and supply chain prices if the UK does not manage to negotiate trade agreements that mirror those within the union.

 

Venezuela: Formerly oil-rich, the nation now faces serious shortages of fuel and funds. Black market valuations of the dollar versus the bolivar are leaving people unable to afford everyday needs—from food and medication, to tires and fuel—which is affecting supply chains across the country. Food costs alone have soared 50-65% over the previous month, which led most family to cut back even in the face of holiday festivities.

 

Cuba: The small nation’s Center for Genetic Engineering has announced advances in diabetes treatments, and plans are moving ahead to export the drug for clinical trials. While the US is not currently on the list of countries that will participate, Cuba’s medical community has expressed interest in working with its neighbor to the near north, particularly given the wide variety of diabetes cases in the US. Collaboration could potentially benefit patients as well as generating significant revenue.

 

Singapore: New tax cuts in the US may prove to be a boon for Singapore companies. Cutting the cost of doing business in the US may draw more companies abroad, although it’s yet to be seen how significant an exodus will occur. Officials in Singapore suggest it is unlikely that US companies already based in Singapore will return, however, given the affordable labor and cost of supplies it already offers.

 

China: Most tech and smart phone supply chains interconnect with China, and the US Department of Defense is predicting that this could cause increasing security concerns. As international tensions affect relations among the US, its allies, and China – particularly in regards to newly announced sanctions against North Korea – the contact China has with microtechnology and software being used by the government could lead to slow downs or to security breaches.

 

North Korea: The UN’s recently announced sanctions against North Korea will seriously limit petroleum access and will affect income earned by workers abroad. North Korea’s government has described the limitations as an economic blockade, and it is yet to be seen how industries unrelated to nuclear development will be affected in the coming months.

 

India: As this emerging economy continues its rise, its supply chain is benefiting from new technologies that are becoming a foundational part of its infrastructure. RFID technology is one example of this. As India expands the use of these systems, its supply chains are better able to trace and track goods whether they are moving through ports, in domestic or ground freight, or among different partners in the chain. The result is a much more efficient global system that allows India to play a heightened role in retail, fashion, tech and other markets worldwide.

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We look forward to joining you for further discussion on supply chain here and on Twitter in 2018!

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