Trends and News for SMBs | June 1-15

Trends and News for SMBs | June 1-15
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Keep your business up to speed with the latest news.

Tentative West Coast deal brings relief to US supply chains  

Shippers have breathed a sigh of relief as the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) announced a tentative agreement just as contract talks at West Coast ports appeared to be heading for a complete breakdown, the Wall Street Journal reported.  

The deal came about after the PMA reported a second series of stoppages at ports across the West Coast ports. Julie Su, the Biden administration’s acting Labor Secretary, stepped in to meet both parties after she was urged to intervene by shippers’ organizations, including the National Retail Federation (NRF).  

Matthew Shay, President and CEO of the NRF, said the retail industry was “relieved” as the deal looked to set to end over a year of negotiations and supply chain uncertainty once fully ratified. “A new agreement provides stability to the supply chain and assurance to the millions of businesses and employees who rely on smooth and efficient operations from the West Coast ports,” he said.  

“The West Coast ports are a critical artery for retailers and other businesses into the US market. We urge the parties to quickly ratify the tentative agreement to bring certainty back to the West Coast ports.” Like the Whitehouse-brokered deal to end the threat of rail strikes, this deal is expected to take several months to ratify. It is understood that some clauses have still not been agreed by the two sides.   

Last week port operations across the West Coast faced delays as talks between dockworkers and the PMA broke down. The PMA said there had been insufficient numbers of dockworkers to secure containers to decks.  

This led to “vessels having to miss their scheduled departures,” the PMA said.   

Concern over potential labor disruption due to West Coast port workers’ contract talks was one of the prime factors behind the growth of volumes at East Coast and Gulf Coast ports over the last year. If the deal is ratified, analysts expect many shippers to shift volumes West again.   

  

Canada’s West Coast shippers fear strike  

Canada’s West Coast shippers could see severe disruption after the union representing dock workers voted to strike “if necessary,” The Loadstar reported.    

The International Longshoreman Workers Union (ILWU) Canada, representing around 7000 dock workers across the country’s West Coast terminals, voted 99.24% in favor of striking. The vote came after talks with the British Columbia Maritime Employers Association (BCMEA) collapsed following government mediation. Nevertheless, they included a proviso that the strike would only go ahead if talks failed.  

Both parties observed the 21-day cooling-off period, which Canadian Labour Law requires following mediation. And there remains a further possibility of averting strike action. CNBC has reported that both parties agreed that a strike could occur no sooner than June 2024. After that, any strike must be preceded by a 72-hour notice period.   

Ports most likely affected include the Ports of Vancouver and Prince Rupert. Around 90% of cargo moving through the Port of Vancouver is Canadian. The Port of Vancouver is Canada’s largest port, unhandled 4 million TEU of container traffic in 2022 and 99 million tonnes of bulk cargo.   

Canadian shippers, however, will draw comfort from the dramatically altered state of talks on the US West Coast. There, government intervention, as reported above, appear to have lifted the threat of strike action at major ports like Los Angeles, Long Beach, and Seattle.  

Not only does the agreement indicate that the complexion of dock worker contract talks can shift quickly, but it also makes the US ports more likely to be able to accept trade diverted away from Canada to the neighboring Port of Seattle. Had the Port of Seattle been significantly impacted by labor slowdowns and work stoppages, it would have been hard-pressed to accept traffic from disrupted Canadian ports. The Canadian International Freight Forwarders Association (CIFFA) has warned that a strike in Vancouver could cost more than C$100 million per week.  

 

Yarn buyers stand to benefit from trade fair reopening   

Buyers in the global yarn and fiber industry will have the opportunity to visit key suppliers in China as the country lifts restrictions on international visitors and the trade fair calendar resumes in full, The Knitting Industry reported.  

Yarn Expo Autumn will help take place from 28 to 30 August 2023 at Shanghai’s National Exhibition and convention center. According to the show’s organizers, the global yarn market is forecast to grow by $18 billion between 2022 and 2026, with an annual growth rate of 5.77%. The Asia Pacific region is expected to gain 74% of the predicted market growth.  

Among the factors driving increased demand from textile and yarn businesses are population growth, the introduction of new fabrics, and recent trends worldwide. The fair represents one of the major events for yarn and fiber buyers and has been a twice-yearly fixture in the calendar for two decades. Yarn Expo Autumn 2023 will display products, including yarn, deluxe cashmere, premium wool, cotton, synthetics, and linen.  

Organizers have also promised to introduce overseas zones to represent countries other than China. Coarse wool prices are historically low, giving buyers the upper hand 

Woolproducers Australia chief executive Jo Hall said after visiting the International Wool and Textile Organisation’s Congress in Japan that some wool-producing countries were reporting that current prices failed to cover the cost of production. “Globally, there is a low demand for broader micron wools, and there is plenty of these types of wool already in storage, with one report of 600,000 bales of purchased crossbred wool sitting in China, which will need to be worked through the system,” she said.  

“The low demand, coupled with wool in storage and continued production, means that we weren’t hearing that there will be any positive movement in the market on crossbred wool for quite some time.”  

 

Shanghai welcomes back Furniture China   

Furniture buyers will have a renewed opportunity to contact sellers from China and worldwide as Shanghai welcomes back the 28th China International Furniture Expo 

Also known as Furniture China, the event will be held from 11 to 15 September 2023 at Shanghai Pudong New International Expo Centre (SNIEC). The event will run concurrently with the Maison Shanghai home furnishing exhibition, which will be held at Shanghai World Expo Exhibition and Convention Center (SWEECC). “Both exhibitions are going to inject the long-accumulated Chinese Strength into the global home furnishing industry and once again open the door to a new world for Chinese suppliers and brands,” said organizers SNIEC & SWEECC. They reported that China’s furniture exports are reversing a downward trend and have risen by 22.1% year-on-year in March.  

Furniture China 2023 and Maison Shanghai 2023 are expected to cover 300,000 exhibition spaces and attract more than 2,500 exhibitors. Exhibits will span cutting-edge furniture design, advanced material application, intelligent manufacturing skills, low-carbon environmental protection technology, and lifestyle.  

The events said they anticipated more than 200,000 trade buyers and that 90% of the exhibition area has been sold out. National pavilions at the event will include those from France, Belgium, Turkey, Malaysia, and Japan. More than 200 international brands from 26 countries are set to attend.   

China’s furniture exports increased from $5.417 billion in 2002 to $56.093 billion in 2019. In the same period, overseas visitors to the fair rose from 2,600 visits to 21,078 visits in 2019.  

China has been engaged in a struggle with Vietnam to represent the top stop in the table of the world’s leading furniture exporters. However, after years of standing neck and neck, Vietnam has begun pulling ahead – expanding its exports to the US, and those from China fall back.  

 

Vietnam grabs a more significant share of US trade  

New figures show that Vietnam has been the big winner from changing trade patterns of imports into the US over the last five years.   

In that period, containerized imports from Asia to the US have risen by 26%. However, data from Oslo-based freight rates platform Xeneta shows that within this time, Vietnam saw a growth rate of 156% of containerized trade into the US. By comparison, China only saw a growth of 7% in that time. This was the lowest figure for any of the 12 major economies in the region except for Singapore, which also saw a 7% increase, and Hong Kong, which saw no growth at all in terms of imported volumes.  

56% of all containerized imports into the US from Asia came from China in 2022. However, China’s share of containerized imports into the US has fallen by ten percentage points since 2017. Vietnam’s share has almost doubled from 6% in 2017 to 11% in 2022, on the other hand. The World Bank recently updated its forecast of Vietnam’s GDP growth in 2023, estimating that growth would reach around 6% for the year. This is down about 0.3% from the bank’s January prediction but is still the highest growth rate in Southeast Asia.  

S&P Global Market Intelligence predicted Vietnam’s GDP growth would reach 6.5% in 2023, driven by the country’s status as a low-cost manufacturing hub and an alternative to China. Vietnam’s low wages compared to China and large, well-educated workforce are among the factors leading companies to consider relocating outsourced manufacturing away from China to Vietnam.    

A recent survey by McKinsey showed that around 70% of Vietnamese Millennials are optimistic about the country’s economic position, the highest confidence level of any Asian country. In June, Vietnam’s government unveiled a master plan to turn Hanoi, the country’s capital, into a smart city and drive developments in the Red River Delta region, a key manufacturing hub. 

 

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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