Global Supply Chain Review: June 2016

The month of June was filled with marked highs and lows across supply chain industries and throughout the world, in particular as the UK neared its #Brexit vote. Here, some of this month’s news highlights:

U.K.: In the immediate wake of Britain’s vote to withdraw from the EU, logistics experts are already bracing for the short and long term impacts of the decision. The shift will effect not only businesses in the UK and Europe, but in the US as well.

U.S.: Import prices are rising, and the economy is hitting a soft patch in this election season. As uncertainty rises about the status of pending trade deals and the possibility of new economic policies in the coming year, a slow down seems to be in the works.

France: As France hosts EURO 2016, it has been confronted both with the event’s profitability as well as its increased acts and threats of violence. The UEFA will draw more viewers per match than the U.S. Superbowl, and it projects $2.2 billion in profits. But what are the costs, as fan violence is already rampant and organizations like ISIS are threatening breaches?

Germany: Germany has provided a haven for many refugees during the current crisis, utilizing the skills and manpower of migrants to strengthen the economy. It has now established an “incentive” program, which will fine employers and threaten deportation to asylum seekers who quit apprenticeships. To what extent is this good business in terms of requiring civic responsibility, and to what extent does this put migrant workers in danger of workplace abuse?

China: Say what you will about market instability, but China’s supply chain is setting current industry standards, especially in cases of high volume logistics. Added to this — startup Xiaomi has gained staggering value to top lists worldwide.

Japan: Foreign investors are dropping Japanese stocks in the wake of an earthquake that rattled the company’s infrastructure, manufacturing, and supply chain. Is now the time to pick up stocks?

Brazil: Economists are reporting slow and cautious optimism about the economy, especially as this summer’s Olympics approach. Despite political instability, Brazilian officials assert that they are prepared for the influx of athletes and tourists who will contribute much needed revenue for the country. Yet to date, transportation systems have not been open or tested. And it’s yet to be seen how Zika virus will affect the unfolding of events; but for now it is decreasing costs for those desirous to attend.

Mexico: After contentious debates, the government has closed an agreement with South Korea-based automaker Kia for a reduced package of incentives. In addition to cutting back on infrastructural improvements near the Kia plant—including the number of railroads accessing the lot—the package cur the cut the value of incentives from an estimated 28% to 10%. How will Kia handle these arrangements, and to what degree will cost be passed to consumers?

Canada: World Vision Canada has reported that Canadian consumers may be purchasing goods produced by child labor. In the wake of the controversial report, transparency legislation is in the works to ensure that Canadian supply chain managers are aware of how goods are produced so that they can make ethical decisions.

India: While full time child labor has decreased in recent years, new legislation may open dangerous loop holes that make exploitation easier across supply chains. Activists in India are now pushing for a ban on child workers under the age of 14. Exceptions would be make for children assisting their families in agricultural or artisanal industries, where the child may gain skills for future employment while contributing to family welfare.

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