Logistics Update: Supply Chain Risks, Red Sea Crisis Continues To Impact Shipping, and Q4 Report From Index of Global Trade Health

by | Feb 2, 2024 | Logistics

A new round-up from Supply Chain Dive highlights supply chain trends and risks to look out for in 2024, The current spike in shipping costs from the Red Sea crisis poses a potential threat to long-term rates, Index of Global Trade Health reports growth for the logistics industry in Q4 2023, DroneUp, a longstanding partner of Walmart, has secured a BVLOS waiver specifically for medical deliveries and Ryder System Inc. has partnered with Kodiak Robotics for its first commercial venture into autonomous trucking.

Supply Chain Risks and Trends For 2024

Various factors are influencing the current dynamics in the supply chain industry. A recent round-up from Supply Chain Dive found that suppliers and manufacturers are facing challenges due to increased operating costs while striving to maintain capacity amid intense competition. Changes in the last-mile delivery sector are occurring, with carrier diversification slowing down as FedEx and UPS compete by offering discounts to regain volume. Despite efforts to manage inventories efficiently, there is a risk of supply shortages for certain goods. These challenges have already begun to inform trends and risks to be on the lookout for as we continue through 2024.

Source: Supply Chain Dive

Could The Red Sea Crisis Affect Late 2024 Shipping?

The current spike in shipping costs, arising from ocean carriers rerouting away from Middle East conflicts, poses a potential threat to long-term rates, according to retailers. During a hearing by the U.S. House Transportation & Infrastructure’s maritime subcommittee, Jonathan Gold from the National Retail Federation emphasized the need for immediate government attention to prevent inflation-inducing rates during upcoming annual contract negotiations with ocean carriers. Retailers are making crucial decisions about back-to-school and holiday import shipments, considering a shift back to West Coast ports to avoid congestion. The ongoing crisis may disrupt long-term shipping strategies, leading to increased costs.

Source: Freight Waves

Index of Global Trade Health Records Logistics Growth

In the fourth quarter of 2023, the transport and logistics sector recorded its seventh consecutive quarter in contraction territory, as revealed by Tradeshift’s Index of Global Trade Health. The analysis, which assesses the flow of purchase orders and invoice traffic in global supply chains, indicated that transaction volumes in the transport and logistics sector grew six points below the expected range. Similarly, the manufacturing sector also remained in contraction territory, with activity levels rising six points below the baseline. Although total trade activity across all sectors exhibited modest signs of improvement in Q4, notably with global trade transaction volumes improving to four points below the baseline, the recovery is from a relatively low base. The boost in overall trade activity is attributed to a surprising increase in new orders during the quarter, which grew five points above the expected range, marking the most substantial acceleration in two years.

Source: Inside Logistics

Walmart Drone Partner Obtains BVLOS Waiver

DroneUp, a longstanding partner of Walmart, has secured expanded permissions from the Federal Aviation Administration for drone deliveries beyond the visual line of sight (BVLOS) of the operator. This approval places DroneUp among a select group of companies with a BVLOS waiver specifically for medical deliveries.

Source: FLYING

Ryder System Inc. Partners With Kodiak Robotics For Autonomous Trucking

Ryder System Inc., a major player in autonomous trucks, has partnered with Kodiak Robotics for its first commercial venture into autonomous trucking. Kodiak is utilizing space at Ryder’s maintenance facility in Houston to launch and land autonomous trucks, as well as transfer freight between Houston, Dallas, and Oklahoma City. While Ryder currently focuses on maintenance support, it is considering the creation of an autonomous trucking fleet, leveraging its extensive network of maintenance facilities.

Source: Freight Waves

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NLS Logistics Team
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