\
Skip to content
flexport
 Subscribe to our Weekly Economic Report for expert insights into global trade and supply chains. Sign Up
  • English
  • Deutsch
  • 简体中文
Flexport
supply chain snapshots 5

October 14, 2022

Supply Chain Snapshots - News & Trends You Should Read This Week

brand-mike
\

Friday, October 14, 2022

Looking for a quick summary of the top supply chain and logistics news and trends making waves this week? Read our weekly "Supply Chain Snapshots" for helpful summaries and commentary to get you up-to-speed on the news you need to know.

#1 Consumer Spending was Flat in September and Below Expectations as Inflation Takes Toll

Read the full article from CNBC here.

  • Consumer spending was flat in September as prices moved sharply higher and the Federal Reserve implemented higher interest rates to slow the economy.
  • Retail sales rose 8.2% last month from a year ago, matching the rise in the consumer price index.
  • Shoppers remain flush with cash though there are some recent indications that they are dipping into savings to make ends meet due to the Fed's multiple interest rate hikes.

#2 Rail Workers Union Rejects Contract, Renewing Strike Threat

Read the full article from Washington Post here.

  • One of the nation's largest railroad unions has rejected a contract with freight carriers, once again thrusting the industry into uncertainty and raising the possibility of a strike.
  • The third-largest freight rail workers union, the Brotherhood of Maintenance of Way Employers Division (BMED), rejected the deal which included a 24% raise (the biggest wage increase in four decades), and annual bonuses.
  • 56% of its 11,000+ workers voted against the tentative agreement. Some workers say it didn't go far enough on sick leave and working conditions. This once again raises the possibility of a crippling nationwide strike and the economic implications that go with it.
  • Some of the provisions would allow workers to avoid attendance penalties for routine medical visits and hospitalizations but did not address the number of unpaid sick days workers would be eligible for.

#3 TikTok Chases Amazon with Plans for U.S. Fulfillment Centers

Read the full article from Axios here.

  • TikTok is planning to build its own product fulfillment centers in the U.S. — signifying its commitment to e-commerce as its next major revenue stream, following the explosive growth of its ads business.
  • TikTok began piloting a shopping feature in the U.S., Canada, and the UK last year via a deal with Shopify.
  • TikTok is looking to build an "international e-commerce fulfillment system" that will include international warehousing, customs clearings and supply chain systems that support domestic e-commerce efforts in the U.S. and cross-border e-commerce efforts.
  • The systems will eventually perform parcel consolidation, along with transporting goods from one stage to the next and managing free returns.
  • It does not appear that TikTok plans to build out its own transportation unit like Amazon, but rather work with vendors to handle shipping, parcel consolidation, and transportation.

#4 Morgan Stanley says Jaw-Dropping Inventory Levels a ‘Key Risk’ to Retailers

Read the full article from FreightWaves here.

  • Retailers still have way too much stuff. Inventory is a "key risk" to retailers and electronic goods manufacturers thanks to skidding demand amid a glut of inventory.
  • In the goods industry, there is a 19% discrepancy between inventory and sales growth
  • Companies with high consumer exposure have slashed their ordering — even though this time of year tends to be when retailers are beefing up their warehouses ahead of the holiday season.
  • Analysts highlighted apparel as one sector reporting "alarming" growth in imports. Home furnishings and personal electronics are also at elevated risk
  • Retailers prepared for the holiday season earlier this year, anticipating disruptions in importing goods from manufacturing hubs in East Asia.

#5 Big Decline in Warehouse Shipments is Latest Sign of the Consumer Pullback

Read the full article from CNBC here.

  • A big decline in warehouse orders leaving storage and heading to retailers is another signal of the pullback in consumer demand.
  • Jordan Brunk, CMO of WarehouseQuote, said with fewer products being moved out of warehouses to go into stores there will be less warehouse space available for incoming orders.
  • Warehouse prices on the East Coast continue to move up as trade continues to be diverted away from West Coast ports.
  • But overall demand is down, with WarehouseQuote reporting a 33% decline in outbound orders year over year.

#6 Supply Chain Snarls Loosen for U.S. Companies, but Plenty of Problems Remain

Read the full article from Reuters here.

  • The cost of shipping a container from Asia to the U.S. West Coast just clicked below $2,500, after peaking late last year at over $10,000, according to booking platform Freightos Group.
  • Lumber prices are the lowest they have been in over two years, while the cost of steel and aluminum have moderated.
  • The New York Federal Reserve's Global Supply Pressure Index showed stress in the global system eased in September to the lowest level since December 2020.
  • This marks a major change from when companies couldn't fill orders because they couldn't find components to build goods or the trucks to transport them, however, the challenge now is that it's unclear what will happen with demand.

#7 The Government of Canada Announces how it will Change the way Ports Work to Strengthen our Supply Chain and Make Life More Affordable

Read the full news release here.

  • Canada’s Minister of Transport announced that the government intends to introduce legislative amendments in the coming months to update the way the country’s ports are managed and operated (based on the results of the Ports Modernization Review).
  • The proposed legislative changes will achieve several key objectives, including adjustments to port governance, financial management and port safety and security.
  • The Review examined their ports system to ensure it has the governance structure and tools needed to adapt to an increasingly complex operating environment.
  • It also considered how potential policy, legislative, and regulatory changes could assist Canada's Port Authorities to consolidate their position as key players in the Canadian economy.

We'll be back next week with another edition of Supply Chain Snapshots.

Flexport Smart Commerce Newsletter

Sign-Up for Our Smart Commerce Newsletter

Explore insider perspectives, news, and expert advice for retail and e-commerce brands.

*Required field

Related Content

Are You Prepared for the Unexpected? Logistics Experts Share Advice for Peak Season Success

BLOG

Logistics Experts Share Advice for Peak Season Success

Read More

Scale Up Your Business With Flexible Logistics Funding

BLOG

Scale Up Your Business With Flexible Logistics Funding

Read More

BLOG

Your Must-Read Roadmap to Optimize for New HTS Codes

Read More

Share the Article

About this author

More From Flexport

A blue stacked chart graph

Blog

Trade Growth - Flexport Weekly Economic Report

Read More

A blue stacked chart graph

Blog

Ocean Timeliness Indicator

Read More

A blue stacked chart graph

Blog

Air Timeliness Indicator

Read More