Dark Clouds Ahead For Supply Chain and Logistics?

WSJ stories suggest truck operators are facing headwinds while the global airfreight business is losing altitude. Forbes article explores Brexit’s supply chain implications.

Class 8 truck orders dropped almost 40% in the first half of 2016 compared to the same period last year, said a July 7 WSJ.com story.

The story cites ACT Research, saying, “Trucking companies are hitting the brakes hard. Carriers ordered just 13,100 heavy-duty trucks last month…the lowest level in nearly six years and a stark sign that operators are pulling back investment.”

In a related article updated July 6, WSJ reported, “Several large carriers have warned of sharply lower profits ahead, making it unlikely that companies will start adding new trucks to their fleets anytime soon.”

Even when there is positive news, it’s accompanied by discouraging factors, as noted by the story’s author Loretta Chao: “The Institute for Supply Management’s index of manufacturing activity showed some improvement in June. But economists say many factors, including economic turmoil brought on by the U.K.’s vote to leave the European Union, dampen prospects of a pickup in growth anytime soon.”

Meanwhile, in the skies, the July 7 WSJ story said, “The global airfreight business is losing altitude and North America and Asia are proving a big drag on the market.”

The story continued, “The alarms over the shipping industry downturn are growing louder in the financial sector,” noting how the European Central Bank is observing a “slump in container and dry bulk shipping” and how it is affecting banks.

Brexit implications

Another perspective on the supply chain came from Kevin O’Marah, a Contributor to Forbes. In a July 7 story, “Brexit: Long-Term Implications For Supply Chain Leaders,” he said the following:

“Maybe supply chain leaders should think about their networks more like a collection of cells than an integrated whole. …The technology is there with fast-dropping prices on incredibly flexible production machinery to build regional or even local manufacturing. It’s also getting ever easier to attach Uber-like start-ups to existing supply chain nodes for direct-to-consumer delivery or premium field service. And cloud-based systems for delivering digital product like software keys, CAD models and control algorithms are growing quickly.”

 

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