The Friday Report: May 28th, 2021Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry
Chinese Burst Steel Bubble
Is a steel shortage creating a bubble? With steel in short supply, steel stocks are rocketing to the moon. U.S. Steel is up 200 percent in only 12 months and Nucor is up 76 percent just this year. The pandemic last year forced manufacturers to shutter production, but because steel mills were slow to resume production, a steel shortage developed.
Recently, investors have been beating a path to invest in raw materials including iron ore and steel, sure that the economic recovery would fuel huge price spikes. China stepped in to put a stop to the feeding frenzy. In China, five top regulators reported that they had jointly summoned key companies in the steel, iron ore, copper, and aluminum sectors last weekend to admonish them about the impact of speculation and market manipulation.
The Chinese regulatory agencies promised to increase regulation, closely monitor commodities markets and take action if speculation or market manipulation occurred. A “zero tolerance” policy was vowed. The effect of the meeting was to put up guardrails to encourage pullback, especially by everyday investors.
April financial data indicated that Chinese demand had begun to level off.
Pandemic Produces Expansion for Wendy’s
The success of the Wendy’s business model is fueling growth and innovation. Currently with 6,800 locations across the United States, Wendy’s announced the addition of 1,200 new restaurants by 2025. One third of these restaurants will include “ghost kitchens, delivery only locations, fuel and travel center locations”.
Examination of its customer trends during the pandemic revealed that its customers value convenience and off-premise options for a burger. By expanding their business model beyond the traditional drive thru restaurant, Wendy’s hopes to capitalize on customer preferences for online ordering and curbside pickup.
Freight Shipping Sails into the Digital Realm
Today, global supply chains are highly complicated and subject to snags, snarls, and disruption. From lost shipping containers to missing loads, shippers need more visibility and time to react to disruptions in their supply chains.
Digital freight startups exploded during the pandemic. Today, there are nearly 250 companies globally. The freight industry has been fostering digitization for years. Unfortunately, it is expensive to graft digital tracking systems onto legacy databases. This has discouraged investment in digital freight technologies, despite the benefits.
Increasingly, with the rise of remote work, there has been a substantial acceleration in digital freight products. Now there are products to orchestrate entire supply chains that can be integrated with transportation management systems.
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