Global Aperture

As the Global Supply Chain Pressure Index is taking longer than expected to normalize, fingers are once again pointing to supply-side conditions in China. New projections from industry watchdogs also list inflation and recession as top shipper fears for 2023—empty container shortages are expected to dissipate as a result.

Less than two weeks before the start of Lunar New Year, supply chain experts wonder: will shippers catch a break this peak season? Conditions aren’t matching up, and the outlook following China’s annual holiday week “is still very patchy.”

Unless more companies revise supply chain management and adapt to changing consumer and business trends, that break will likely be further away than expected, says one distinguished professor in the field.

Americas

2023 puts the pedal to the metals industry—specifically metals essential to solar panels, EV batteries, and microchips. Foreign and domestic investment, spurred by tax incentives à la Inflation Reduction Act, labor migration, and volatile RMI markets, expects to reap in the second-half of the decade with new US fabrication plants predominantly scheduled for live production between 2025-2030.

But America’s current-year outlook stays modest as imports to the US track lower on high consumer prices, climbing interest rates, and a weakening dollar. US-China trade tensions simmer into the new year as Brazil steps up corn shipments to the latter country after passage of a revised grain deal last November. Cross-border relations and pending United States-Mexico-Canada Agreement (USMCA) disputes are under review at this week’s US-Mexico summit following increases in trade and immigration.

Asia-Pacific

Asia-Pacific’s pre-eminent leaders go tit-for-tat on visa issuance policies and seafarer restrictions as state-funded enterprise leaders in chemicals, high-tech, and healthcare re-shore factories and refocus commercial models. Maybe that’s why global carriers are establishing new routes for Incheon, and why Chinese officials are backpedaling on cross-border restrictions and closer inspections of perishable goods despite surges in Covid-19 infections. Passenger and cargo restrictions at the airports of Hong Kong and Macau were also lifted on January 8, stabilizing headwinds for air capacity expansion. December export volumes from China increased 5.5% year-over-year.

Europe, Middle East & Africa

EU shippers race against the bloc’s February 5 ban of all Russian oil products with even more orders of diesel from the Kuwait, India, and China. However, refining capacity deficits in Europe will keep supplies tight and demand high, impacting manufacturing and transport costs. Global carriers will in turn slow-down vessel movements and deploy additional capacity for transatlantic routes. European policymakers are strengthening cooperation, trade, and national security ties with Japan. Another cargo vessel runs aground in the Suez Canal; officials say maritime traffic was not affected.

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