Global Supply Chain Review: Beginning 2017

Global Supply Chain Review: Beginning 2017

A new year and a new review. The word of 2017 so far is speculation—about new administrations, global trade, interest rates, and treaties. We’re here to keep you informed about worldwide responses and developments in the rapidly evolving field of supply chain.

 

U.S.: The U.S. and its longstanding trade partner Mexico continue to experience instability as the new administration rolls out executive orders and Twitter statements concerning a border wall affecting that would potentially affect trade. Among the key industries paying attention are oil and natural gas, and auto manufacturing, where ease and affordability of continued import/export are in question. How might the US benefit, or to what extent would additional cost of limiting exchange be passed to American consumers? Meanwhile, job growth and real estate numbers remain stable, and the stock market has hit record highs.

 

Britain: As the U.K. continues to sort out the intricacies of Brexit, it seeks trade partnerships and logistical chains that could help it maintain its industries after splitting from the E.U. While the U.S. has traditionally been a major trade partner, Teresa May is making overtures to tighten those bonds. Current numbers suggest as many as 1 in 3 firms are looking to relocate.

 

Mexico: At its recent Manufacturing Supply Chain Summit, Mexican business and industry leaders expressed concern and uncertainty about the state of NAFTA and its potential implications for trade. While some leaders saw possible changes as negative for fields from auto manufacturing to farming, other leaders wondered to what degree revisions to trade agreements might create new opportunities for Mexican companies to fill gaps in supply chain.

 

India: Having risen to number 46 worldwide in logistics performance and number 13 in global GDP growth, India is officially one of the world’s fastest growing economies. While infrastructural problems continue to provide challenges in supply chain, particularly in rural areas, new technology promises to help bridge those gaps. India’s next step needs to be faster and more innovative adoption of new technologies, and proving training to the workforce so they can deploy those tools.

 

South Korea: With their ships continuing to cause logjam at global ports, South Korea’s bankrupt Hanjin Shipping is torn between the debts owed to U.S. creditors and the fines owed to U.S. ports.

 

Russia: Manufacturing is expanding, with the news that Daimler will begin building Mercedes-Benz in Russia. The plant will set records as the first major Western investment since the imposition of sanctions. Projects suggest this is good news for stabilizing the Russian car market in fewer than five years. Russia’s trade minister suggests this is a sign of increasing global faith in the Russian market and its supply chain potential.

 

China: As leaders worry over how increasing nationalism might affect global trade, China has is rumored to be considering amendments to maritime laws that affect ships involved in import/export. Tensions between Japan and China are likely to increase if they are enacted. China’s trade relationship with the U.S. also sits in question, and its manufacturing relationship to Apple remains key.

 

Taiwan: Watching its interests in import/export with both the U.S. and China, industry leaders in Taiwan are expressing concerns over tension between its two major partners. Technology manufacturing and retail are major sources of revenue for the island, and 62% of its GDP stemmed from foreign trade.

 

Philippines: Extremist groups continue to disrupt supply chains in the Philippines, where kidnapping and cargo vessel abductions are on the rise. A moratorium was set on transports between Indonesia and the Philippines to decrease and prevent crew abductions, and the security of crews on cargo ships transiting between Australia and North Asia has also been called into question.

 

Cuba: The cost of visiting Cuba continues to drop following changes in policy that occurred during the Obama administration. As airports prepare for increased U.S. flights, organizations from AirBnB and Uber seek to expand in preparation for tourists. It is yet to be seen how the new administration might affect these expansions.

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