Global Supply Chain Review: November 2017

Global Supply Chain Review: November 2017

The countdown to 2018 has begun, and as we near a new year, the world of supply chain remains ever complex. Treaties, renegotiations, and ethics are the key words of the month…

 

U.S.: As cities throughout the U.S. battle to become Amazon’s next home, analysts have begun discussing how major e-commerce sites have developed an “internet of goods.” Digitization has changed manufacturing, marketing, sales, and distribution of goods; and the new year promises to further solidify this as more and more traditional retailers make the jump online.

 

U.K.: Brexit is inescapable, even as the year concludes. New rounds of talks with the EU have raised new questions about how people and goods will travel across borders; and Teresa May has confirmed that the U.K. will be leaving the European single market, which will lead to regulatory constraints across supply chain. Companies across industries from banking to manufacturing are beginning assessments on how to accommodate possible challenges.

 

E.U.: International supply chains, and the movement of goods through the European market, are driving new trends in ethical sourcing, manufacture, and delivery. Studies show that new technology has been identified as a key way for the E.U. to monitor the track record of companies across the supply chain; and consistent regulation allows European countries to more efficiently encourage non-compliant members of the supply chain to improve on a deadline.

 

China: Despite tensions with the U.S., Chinese imports have never been cheaper. With freight rates declining between the two countries even in peak season, Chinese products have become even more attractive to U.S. supply chains and consumers.

 

South Korea: The Asian nation has hosted delegates from Ireland this month, as the two nations seek to expand agricultural supply chains. As the Irish hope to increase exports of beef and dairy, the South Korean government weighs the effects such a new relationship would have on its own food industry.

 

Brazil: While debates continue on the restructuring of the country’s pension program, negotiations have also occurred with Britain regarding oil. Conducted by the British trade minister on behalf of Shell and BP, the talks aimed at reducing regulation and taxation on fuel being imported into Brazil. Some consider the policy changes as helpful, smoothing the way for more efficient import, while environmental activists argue that it’s an attempt to subvert protections.

 

Venezeula: The embattled South American nation faces continued challenges, as debt repayment deadlines pass and defaults begin. The cash crunch that has resulted will create hard ripples through the supply chain; and workers across industries are confronted with severe delays in payment.

 

Mexico: Tensions over NAFTA persist. As the Trump administration continues criticisms against one of its main trading partners, both nations have begun questioning how the treaty’s renegotiation or conclusion would affect supply chain on both sides. Mexico has suggested that it has new aims if renegotiation does occur: notably, strengthened competitiveness for all members.

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