The Headlines: Port congestion in Asia, particularly in Singapore, has intensified, causing delays of up to seven days and affecting over 450,000 TEU of vessel capacity. In response, shipping rates have risen from Asia, with spot rates from North Asia to the U.S. West Coast reaching the highest they’ve been since late 2022. Singapore is attempting to expand its handling capacity; however, delays are expected to continue to impact global supply chains.

What’s Important: Ports worldwide continue to invest in technology and infrastructure that seems to be paying off. The Global Container Port Throughput Index has steadily improved and volumes are up by 11.6% year-to-date compared to 2023. The issues in Asia, and potential for work stoppages in N. America due to labor contracts expiring, are a reminder that shippers need to remain flexible and able to pivot when disruptions happen.

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The Headlines: Europe’s global exports are declining as the EU tries to balance economic security with trade competitiveness. As it stands now, Europe is falling behind the U.S. and China in economic growth, and concerns over the EU’s focus on security hurting trade are justified. Economic conditions, including geopolitical tensions and an energy crisis, have significantly impacted supply chains and overall stability.

What’s Important: As one solution to the problem, a new European Competitiveness Pact has been established that aims to assist with productivity and more sustainable growth. Also among the objectives is to address critical areas like energy and raw materials. All of which, as the trend towards nearshoring continues, will be vital for the region’s success.

The Headlines: Ocean freight rate volatility remains an issue, driven largely by geopolitical tensions, the global economy, and ongoing disruptions. Since May 2024, spot rates have surged on major trade routes from Asia to European and U.S. ports. Early season demand and the ongoing conflicts in the Red Sea region are continuing to impact transit times and disrupt schedules. One result of that has been shippers frontloading imports, further escalating rates.

What’s Important: Despite the current challenges facing ocean freight, there are several positive developments. The increased adoption of technology is slowly but surely improving network efficiency, leading to faster processing times and better capacity management. Fleet modernization and international efforts to stabilize geopolitical hotspots are helping. The benefit of transportation partners who can connect and share real-time data with shippers, as well as their suppliers and customers, is greater than ever.

The Headlines: Air freight rates are on the rise, driven by a combination of higher demand and capacity constraints, which are expected to persist into Q3 2024. Geopolitical events, particularly what’s happening in the Red Sea, are the main factors. The disruptions have led to rerouting and an increased demand for air freight as an alternative to maritime shipping and a way to manage delays and avoid bottlenecks.

What’s Important: Although the increase in air freight has been largely due to the Red Sea crisis, e-commerce growth is also strong on major trade lanes, continuing to drive demand. Overall, as of May, air volumes increased by double digits for five consecutive months, reversing a steep decline that began in 2022. With ocean continuing to have its own problems, air freight will remain an alternative for companies even as rates remain elevated.

The Headlines: Two labor negotiations have the potential to impact N. America supply chains greatly in Q3. A rail strike in Canada and an East/ Gulf Coast strike in the U.S. could create significant inland problems for both countries. The tension is high for both situations as of late June, with few signs of a reconciliation imminent.

What’s Important: These issues will hopefully find resolution, but are another reminder of the importance of being prepared for the worst-case scenarios. The past few years have seen import volume shift between East and West Coast ports for a variety of reasons. With the present situation, companies need to be nimble as the potential for strikes plays out… just as we’ve all had to be over the past few years during the West Coast labor negotiations and issues in the Panama Canal.

The Headlines: Cybersecurity remains the highest overall risk at 77.69, but this represents a notable decline from the previous quarter. Government intervention has surged to 74.62, its highest level in the past four years, reflecting managers’ worries about tariffs, trade wars, and regulations. Economic risk has climbed to the third highest risk at 72.31, with concerns about rising energy costs, commodity price volatility, and labor shortages.

What’s Important: Like the last two quarters, this is a signal that companies feel the day-to-day operations of their supply chains are working well. With rates elevated in some areas but low in others, companies feel they can focus on the strategic needs of their logistics operations. Now, for example, is a chance to learn what new technology is available that can help position your supply chain for success when the next big disruptions take place.

The Headlines: The Logistics Manager’s Index read at 55.6 in May of 2024 (the most recent month available), up (+2.7) from April’s reading of 52.9. With this reading, the index has now expanded in 9 of the last 10 months and for the last six months in a row. The most notable change this month is Transportation Price which increased (+13.7) from 44.1 to 57.8 – the highest level since June of 2022

What’s Important: U.S. domestic truckload prices have been low for a while, so these results may indicate a floor has been reached. The buyer’s market may be at an end, so companies will want to consider locking in pricing for truckload, LTL, and parcel before another move upwards.

The Headlines: The industry faces ongoing cybersecurity threats. Digitizing comes with a need for preparedness, but the supply chain is always vulnerable. Open-source software that many organizations use is often targeted, leading to widespread security breaches. Vulnerabilities in digital systems could include zero-day exploits or configuration errors, and once found, cybercriminals are able to gain unauthorized access and disrupt or halt operations.

What’s Important: Companies have gotten more vigilant in assessing the cybersecurity practices of their vendors and partners, ensuring that they adhere to strict security protocols. But as ransomware attacks increase, the technology needed to detect and prevent them is becoming more sophisticated. Active management and communication with supply chain partners’ systems are important for all companies’ IT security and their supply chains.