Trends and News for SMBs | July

Trends and News for SMBs | July
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Keep your business up to speed with the latest news.

Vessel Congestion Eases at Singapore, But Long-Term Relief is Not in Sight

Congestion and delays at Singapore eased slightly last week but remain significant as the port suffers from the effects of vessel diversions around Africa, South China Morning Post reported. Industry insiders reported that delays at Singapore decreased from seven days to around five. Major Chinese ports, such as Qingdao and Ningbo, also saw slight improvements, with delays dropping from around three days to 24 hours.

However, renewed Houthi attacks in the Red Sea, where a second vessel was sunk last week, suggest that there will be no long-term relief for Singapore. Ocean carriers diverting vessels around the Cape of Good Hope to avoid the Suez Canal means many vessels miss refueling or unloading at Middle East ports, opting instead for Singapore, a leading bunkering port.

Nearby alternatives like Port Klang and Tanjung Pelepas in Malaysia have the capacity to process cargo volumes but lack Singapore’s transshipment connectivity. According to marine consultancy Drewry, South China Morning posts reported, this means cargo diverted to these ports could face further delays reaching their destinations. Janyendu Krishna of Drewry emphasized in the publication Singapore’s importance as a transshipment hub, noting that its weekly mainline service connections were nearly twice that of Port Klang and more than three times that of Tanjung Pelepas.

Some shippers and market analysts hope a ceasefire in Gaza might lead to the Houthis ceasing their attacks on commercial shipping. However, analysts are skeptical that the attacks would stop even if the Gaza conflict were resolved. Senior ocean carrier executives believe there is little incentive for the Houthis to cease their attacks.

In the meantime, ocean carriers will adjust their schedules to account for delays caused by rerouting to avoid the Red Sea, and shippers may need to adjust their inventory management practices.

 

How ILA’s East Coast Strike Threat Could Further Strain Supply Chains

The International Longshoremen Association’s (ILA) talk of staging an East and Gulf Coast dockworker strike on October 1 worries shippers amidst tight supply chains, the Journal of Commerce reported. Three weeks ago, the ILA, representing 85,000 dockworkers across the East and Gulf Coast, pulled out of negotiations due to a terminal in Mobile, Alabama, using automation technology outside existing agreements.

The real objective of the threats seems to be gaining leverage for negotiating higher wages in the upcoming contract talks, set to expire on September 30. Historically, US dockworkers have continued working without a contract while negotiations progress. However, the ILA has indicated it is unwilling to do the same, adding pressure to the negotiations.

ILA wage demands are believed to be higher than the 32% rise agreed by the ILWU in West Coast ports last year. The ILA argues that high profits by ocean carriers during the pandemic justify a 40% wage increase. Contingency measures by shippers to mitigate potential disruption could lead to further supply chain issues, including diverting volumes to the US West Coast. While current delays and congestion in Asian ports have reduced volumes at ports like Los Angeles and Long Beach, this could quickly change.

Shippers’ contingency measures could intensify the early peak season if importers front-load cargo, fearing greater congestion later in 2024. With Canadian ports also facing strike threats, shippers would have limited alternatives if the dispute between the ILA and port employers escalates.

 

Textiles and Fabrics Help Drive Vietnam’s Export Growth

Vietnam is set to achieve impressive export growth of between 10% and 12% over the coming year, with a trade surplus reaching up to $24 billion, Fibre2Fibre publication reported. A macroeconomic report released by MBS in June highlighted high export growth in products like textile fibers and yarns as key drivers. The export of these goods increased by 52.7% in May.

Overall, May exports were worth $33.8 billion, a 5.7% month-on-month rise and a 15.8% year-on-year increase. In the first five months of this year, exports were estimated at $156.7 billion. The United States, Vietnam’s leading export market, accounted for $44 billion of this total, up 2% year-on-year. Other significant export markets included the European Union, with $20.7 billion, up 16.1%, and Japan, with $9.4 billion, up 4.7%.

Exports of industrial products, especially phones and their components, as well as cameras, camcorders, and components, saw year-on-year growth of 50.6% and 50.7%, respectively. Challenges facing the Vietnamese economy include rising domestic oil prices, a high exchange rate affecting the cost of imported goods, and lagging domestic consumption. MBS forecasted GDP growth in 2024 to be between 6.1% and 6.3%, driven by a resurgence of orders and job creation.

Industrial production increased by 3.9% month-on-month and 8.9% year-on-year in May, mainly due to new orders. The manufacture of furniture increased by 18.8% year-on-year, although the cost of production is growing at the fastest pace in nearly two years, potentially leading to higher selling prices and affecting market demand.

Vietnam’s success in reorganizing trade and customs policy, simplifying administrative formalities, and improving import and export management has contributed to increased export growth and FDI. However, rising transportation costs due to geopolitical conflicts and increasing competition from countries like China, Indonesia, and Thailand could hinder Vietnam’s export growth for the rest of the year. The report noted that Vietnam’s partner countries are generally experiencing slower economic recovery compared to Vietnam itself.

 

Bangkok Prepares to Hold Major Woodworking Trade Show

Thailand is set to host a major event for the international woodworking industry, showcasing the latest technology, materials, and trends, Furniture World reported. The Thailand International Woodworking and Furniture Exhibition (TIWF) 2024 will be held at the IMPACT Exhibition and Convention Center from September 18 to 20.

Organizers plan to showcase the latest technology solutions, materials, trends, and sustainability efforts in the woodworking industry across Thailand and Southeast Asia. The exhibition will cover more than 5,000 square meters of floor space and feature national exhibitor groups from countries including Malaysia, Taiwan, China, Thailand, Germany, the USA, and France. Over 150 exhibitors from 22 countries are expected to attend, attracting more than 4,000 delegates and trade buyers from the woodworking and furniture production industries in Thailand and Southeast Asia.

TIWF 2024 will also serve as a knowledge exchange platform featuring conferences and seminars on the latest industry trends and issues, as well as carpentry skill master classes and DIY workshops. Networking opportunities will include a business matching program, technology demonstrations, and product presentations.

Thailand’s woodworking exports include processed wood, plywood, fiberboard, wooden appliances, and construction equipment, as well as extensive furniture due to the country’s rich natural resources of woods such as teak, rubberwood, and mahogany.

 

We at Ship4wd are dedicated to helping small and mid-sized businesses get the most out of their shipping processes. Regardless of their experience in logistics, business owners can count on us to get their shipments to where they need them.

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