What We're Reading: BDP Trendwatch Week 33

South America globe

Pandemic creates 'worst crisis in a century' for Latin America and Caribbean trade 

Latin America and the Caribbean have been particularly badly hit by the pandemic, with trade expected to contract by almost a quarter this year. 

While ocean carriers have seen a strong recovery in the main Asia-Europe and transpacific tradelanes, the Latin American and Caribbean markets continue to suffer significantly from the impact of Covid-19. 

During a virtual session of the Inter-Parliamentary Monitoring Commission of the Pacific Alliance yesterday, executive secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) Alicia Barcena said that, faced with such uncertainty, nations must “deepen cooperation and bolster regional agreements”. 

Source: The Loadstar

 

Supply chains anticipate delays as indefinite strike begins at Port of Montreal 

The Port of Montreal has been a growing part of Canada's trucking network, winning a $28 million grant last August to reduce congestion, wait times and bottlenecks for trucks. The port saw 1.7 million containers arrive in 2018, a 9% increase in container arrivals over 2017, according to Patrick Turcotte, the former chair of the Quebec Trucking Association. 

Now the Montreal port strike has made potentially costly effects on freight, and that impact could filter through to U.S. and Canadian consumers, the Retail Council of Canada warned. Ocean carriers, such as Maersk and OOCL, are diverting some ships to ports in Halifax, Nova Scotia, and St. John, New Brunswick. Halifax is Canada's fourth-largest port and is competitive with other North American ports, with its location that is one day closer to the Suez Canal, according to the Association of Canadian Port Authorities. 

Source: Supply Chain Dive

 

Ship cited in Beirut blast hasn’t sailed in 7 years. We found It. 

On Nov. 21, 2013, at 11:27 a.m., a leaky ship arrived in Beirut’s port. It never left, and its volatile cargo would lead to tragedy in the city almost seven years later. The Rhosus was loaded with 2,750 tons of ammonium nitrate, which is believed to have blown up most of the port and damaged large parts of the city when it ignited in a warehouse on Aug. 4. 

The former captain of the ship, Boris Prokoshev, told The New York Times that he heard from other sailors that the Rhosus sank in 2015 or 2016. This time frame turned out to be incorrect. Using satellite imagery analysis and ship tracking data, our Visual Investigations unit went back in time to follow the ship that brought the disastrous cargo to Beirut. We found its exact location, where it remains hidden a short distance from Beirut’s ground zero. 

Source: The New York Times

 

Rise in US manufacturing suggests a road to recovery – but stay cautious 

The US economy appears to be on the road to recovery, judging by the improvement in manufacturing in July and rising export orders. 

However, pundits caution operators to adopt a flexible stance, as the trajectory of the pandemic could lead to decline in the short term. 

Data released by the Institute for Supply Management (ISM) show that the US Purchasing Managers Index (PMI) for July climbed for the second month in a row, after a three-month decline, to reach 54.2 (with a reading of 50 or higher indicating growth). 

Source: The Loadstar

 

US reimposes 10% aluminum tariffs on Canada as manufacturers decry can shortage 

The tariffs apply only to non-alloyed unwrought aluminum, which aluminum producers use to make intermediate and finished goods, from auto parts to cans. The tariffs would not affect a U.S. manufacturer of beverages importing finished cans from Canada, for example. 

But domestic aluminum producers importing from Canada will have to pay the raw aluminum tariffs, and those costs could trickle down to manufacturers procuring aluminum parts or packaging domestically. That might encourage U.S. manufacturers to seek aluminum products from outside the U.S. at a lower total cost, making U.S. aluminum producers less competitive when selling their products to industrial customers, according to The Aluminum Association. 

Source: Supply Chain Dive

 

Shocks to supply chains can erase a year’s profit, McKinsey says

Companies risk losing more than 40% of annual profit once a decade in a world threatened by trade wars, cyberattacks, pandemics and climate change, according to McKinsey & Co., which estimates the COVID-19 crisis could top $5 trillion in economic losses worldwide.

The New York-based consultancy, in a report that analyzes 325 companies in 13 industries, quantifies what corporate number crunchers have sensed since the tsunami struck Japan in 2011: that man-made and natural disasters are getting more severe, frequent and costly, and that supply chains spanning the globe need to adapt to reduce exposure to threats to business survival.

Source: Supply Chain Brain/Bloomberg