Recent news:
Automotive worker strike - The United Auto Workers (UAW) are in negotiations with General Motors, Ford, and Stellantis, with the possibility of a strike looming as the current contract expires. The UAW seeks a 40% wage increase over four years, alongside cost-of-living raises, improved retirement benefits, and shorter workweeks.
Jason Miller, a supply chain expert, warns that a strike could result in a 15% production decline, potentially deepening to 30% if it extends into October, aligning with 2021's parts shortages and the March 2020 COVID-19 shutdowns. Historically, the auto industry relied on just-in-time inventory practices, but many companies have shifted to just-in-case models post-pandemic, boosting buffer stocks for resilience. The potential strike, especially if prolonged, could exacerbate the ongoing freight recession.
China’s Golden Week 2023 - As China's Golden Week 2023 approaches from September 29th to October 6th, coinciding with the global peak shipping season from August to October, logistical challenges such as capacity shortages, surging demand, limited space, and gridlock loom large. To navigate this period successfully, meticulous shipment planning, advance logistics booking, and ensuring cargo agility are essential. Businesses worldwide must prepare their supply chains diligently for the disruptions anticipated during China's Golden Week.
Internet challenges with automated technology - The rapid adoption of advanced automation technology in distribution centers faces a significant hurdle: inadequate internet connectivity. Robots, autonomous forklifts, and self-driving trucks rely on high-speed, reliable internet connections to operate efficiently. Many companies, however, find that their existing internet infrastructure falls short of the requirements of these new technologies, necessitating costly and time-consuming upgrades. These upgrades can range from bandwidth increases to installing fiber-optic cables and server rooms. Some companies are exploring private networks utilizing high-speed 5G wireless technology to ensure stable connections, particularly in remote or power-challenged areas. While 5G offers promising solutions, not all warehouse automation can seamlessly integrate with it, and there's a learning curve for organizations not accustomed to this technology. Nevertheless, improving internet connectivity is crucial for the successful integration of automation in logistics operations.
Forecasted recyclable packaging shortage - McKinsey, a leading professional services firm, highlights a critical concern: the surging long-term demand for recycled packaging materials could soon outstrip supply. The demand for recycled polyethylene terephthalate (rPET) is projected to surpass supply by a factor of three by 2030. This supply-and-demand imbalance is expected to drive a significant rise in the price difference between used and new rPET over the next decade. McKinsey underscores the potential for improvement, citing that over 80% of rPET waste remains unused. They emphasize the need for initiatives across the value chain, encompassing PET recovery from collection to sorting and processing.
News Sources
China’s Golden Week 2023 – Mainfreight
China’s Golden Week 2023 – Maersk
