The Friday Report: August 30th, 2019

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

Hurricane Dorian May Cause Disruption to Florida Supply Chain

With a potentially catastrophic hurricane looming, risk hovers over the Florida supply chain. In preparation for the storm, emergency declarations have already been issued for southern states including Florida, the governor has activated 2,500 Florida National Guard troops and requested that the President declare a “pre-landfall disaster” for Florida’s 67 counties. 

Hurricane-prone areas Florida and Puerto Rico play significant role in medical device and life sciences manufacturing. Florida supports a variety of other industries from agriculture to engineering suppliers so these supply chains may also face disruption.  Because Florida ports and airports are the gateway to Latin America, supply chain disruptions may have both national and international implications.

Historically, 95% of all major hurricanes form after August 1st and the peak of the season is around September 15th.

China Suspends Purchases of U.S. Agricultural Goods in Response to Latest Trump Tariffs

According to the Chinese Ministry of Commerce and Chinese media, China has halted purchases of American agricultural products and is considering imposing tariffs on U.S. agricultural goods it had already purchased.  The action is in direct response to the new tariffs, many of which were originally slated to start September 1st.   

China is the fourth largest purchaser of the largest purchasers of U.S. agricultural products, behind Mexico, Canada and Japan.  China publicly confirmed that the action was purposely taken in order to use agricultural products as a weapon in the escalating trade war.

American farmers have already been experiencing trying times for crops and commodity prices.  China buys more soybeans than any other nation.  From September 2017 to May 2018, the United States exported approximately 27.7 million tons of soybeans, however exports dropped by 70% during the same nine-month time frame in 2018 to 2019.  American soybean farmers have been planting other crops, including corn.  With the increased supply of corn flooding the market, corn prices are now lower.

More 2018 Venture Capital Investment In Logistics Industry Than in all Previous Years Combined

According to PwC’s “Transportation and Logistics Trends 2019”, the logistics industry experienced a tremendous influx of venture capital, more than double the 2017 record of $1.4 billion.  During a period of tremendous optimism, transportation and logistics companies are in the hunt for fresh revenue streams that are tangential to their core business.

T&L companies have recognized the potential impact of new technologies and are positioning themselves to transform their business models and adjust more quickly to change.  Logistics companies are leveraging new technologies including artificial intelligence to provide competitive advantages, scheduling,  as well as to reduce costs and streamline operations.

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