This week’s supply chain risk news
In France, protests and a major strike have stymied ground transport
A French protest movement called Bloquons Tout, or Block Everything, has been trying to do just that this month. The effort includes not just France’s biggest strike in years, but also industrial disruptions. The protests aim to pressure French officials to reconsider proposed cuts to public spending.
Track occupations earlier this month halted rail traffic in Cherbourg and Valence Ville. Protesters set fire to at least one rail line and damaged rail cables elsewhere. Demonstrations have also blocked numerous urban roadways around the country. In some cases, cyclists have formed slow-moving groups on highways.
The widespread strikes have included rail and transit workers, leading to disruptions across France. As for air travel, more severe impacts may still be to come. France’s largest air traffic control union has slated strikes of its own for early October.
Everstream clients are receiving more granular insights and recommendations about the latest. We also have more background information in our Risk Center
The U.S. and China still haven’t reached a trade deal. How’s that going?
As trade negotiations between the U.S. and Beijing drag on, China’s exports to America have fallen around 15 percent—but its sales elsewhere are more than making up for it.
“This year, through August, China’s trade surplus widened to $785.8 billion from $612.6 billion a year ago. Its surplus with countries across Southeast Asia, Africa, Latin America and Europe has climbed rapidly. China’s electric vehicle brands are storming new markets in Europe and Southeast Asia, while sales of heavily discounted Chinese solar panels are booming in Africa,” the New York Times reports.
Of course, China’s economic indicators are not all sunshine and rainbows—its factory output hit a 12-month low in August. However, a report from the China Federation of Logistics & Purchasing contends the country is shifting from being the “world’s factory” to becoming a global supply chain hub, thanks to an accelerating digital transformation and progress in logistics and manufacturing.
Still, the U.S. remains China’s biggest customer. And for many reasons, the U.S. needs China, too—for one thing, who else is going to take its bumper crop of soy beans? The trade talks will continue in a few weeks.
A GM plant is laying workers off over “parts availability”
A parts shortage is to blame as General Motors says it will temporarily lay off workers at an assembly plant in Missouri. The Wentzville facility outside St. Louis employs thousands of people making vans and mid-size pickup trucks.
The Detroit Free Press reports GM wouldn’t specify what part or parts are behind the shortage; a notice sent to workers simply cites “parts availability.”
Earlier this year GM’s competitor Ford idled multiple U.S. plants for want of magnets made with rare earth minerals—a key sticking point in trade negotiations with China. Carmakers have also struggled in recent years with supply chain issues like a lack of simple chips for systems like windshield wipers. That cost Ford alone tens of thousands of truck sales.
The supply chain woes in Wentzville come on the heels of another announcement that GM will dial back electric vehicle production, despite strong sales in August. Those layoffs, experts say, are partly because tax credits for EV sales are about to expire.
The pause at the Wentzville plant starts in late September.
If 75 shipping containers fall overboard in a busy port, do they make a sound? You bet
Roughly 40 percent of all U.S. shipping containers pass through either the Port of Los Angeles or the nearby Port of Long Beach. The latter handles some $300 billion worth of trade each year.
Last month, Long Beach workers processed more than 900 thousand twenty-foot equivalent units. This month, an estimated 75 shipping containers fell from a cargo vessel there, temporarily shutting down a key terminal.
Things could have been worse; apart from one worker with a sprained ankle, no injuries have been reported. Still U.S. Coast Guard photos showed dozens of containers in the water. Some have since been recovered, but in order to find some of the others underwater while also safeguarding ship traffic, the cleanup effort has had to resort to sonar surveys.
The cargo ship, the Mississippi, was carrying goods from shoes to electronics. It’s not clear how much of that will have to be written off—or how long it will take to finish clearing the area. Meantime, if you’ve been expecting a timely Pacific shipment that seems strangely delayed, the reason might be anything but mundane.
A.I. versus an insect found on several continents
Can artificial intelligence help orange growers fend off a serious crop disease? The Coca-Cola Company thinks it’s worth betting on. Starting with a project called “Save the Orange,” the soda giant is joining the Massachusetts Institute of Technology’s Generative AI Impact Consortium as a founding member.
Oranges are a priority for Coca-Cola because it owns the juice brands Minute Maid and Simply—and because U.S. orange supplies have been declining for decades. Coca-Cola hopes to fight citrus greening, a bacterial disease spread by the Asian citrus psyllid, a bug that now appears everywhere from the Middle East to South America to Florida, where orange production is down 90 percent since 2005.
The MIT group’s other members include OpenAI, Tata Group, SK Telecom, and others. São Paulo-based nonprofit Fundecitrus and the company Invaio Sciences are also part of the “Save the Orange” effort. Coca-Cola’s statement gave some hint of how AI might help here—as well as the stakes for its business—saying “without improvements in detection, management and treatment, the global orange supply could vanish in the next 25 years.”
Can your business stand the weather?
As the planet gets hotter, extreme weather is becoming more common. Understanding what this means for logistics—including the possibility of slowdowns, spoilage, and empty shelves—is key to being prepared.
The potential disruptions range from climate-fueled storm surges shuttering ports to wildfires and heatwaves making it harder for your products to arrive on time and in good condition. Crucially, disruptions to one mode of transportation can ripple into others: If a storm closes an airport, demand for trucking may increase, even as key routes in the area are also blocked.
So how can you and your organization weather-proof your logistics operations? It helps to know the patterns that underlie events like hurricanes, blizzards, and droughts. This not only lets you forecast potential impacts you care about ahead of time, but also identify what ripples will likely follow, and plan accordingly. More advance notice means more time to coordinate worthwhile solutions and avoid steep last-minute expenses.
To thrive in a world where the weather is ever meaner and more volatile, logistics managers have to adapt, build supply chain resilience, and embrace weather resilience as a strategic necessity. Everstream can help you get ready.
