AmerCareRoyal - Market Update Q3 2023

Product-to-Market Pathway View

Q3 2023 Market Update

SUMMARY: Canadian longshore and UPS labor disputes cast a pall on an otherwise stable global supply chain. Material and energy costs currently trend favorable, though Chinese factory output is struggling.

Vancouver and Prince Rupert, Canada along with 28 smaller ports on the coast of British Columbia, were shut down by striking workers in early July, after contract negotiations between the International Longshore and Warehouse Union (ILWU) and the British Columbia Maritime Employers Association (BCMEA) broke down. At the time of this writing, tentative agreement had been reached to end the strike, but several weeks of supply chain disruption across North America is anticipated as a result of the 13-day disruption. (DHL, Seko Logistics) In response, Trans-Pacific carriers were changing schedule rotations so that US- bound cargoes could unload in Seattle-Tacoma rather than Vancouver. Vessel backlogs were reported building outside of Vancouver and Seattle-Tacoma in early July. The US longshore workers union ILWU came out in solidarity with strikers, stating they won’t handle diverted ships from Canadian ports. (Vancouver Fraser Port Authority, Seko) . Meanwhile, despite announcements by Teamsters leaders representing 340,000 UPS employees on tentative deals reached toward a new five-year labor contract, an overall agreement has yet to materialize, and the company and union have been trading barbs since negotiations broke down after the long July Fourth weekend. Part- time employees’ pay remains a sticking point ahead of the Teamster’s July 31 strike deadline. Fed Ex and US Postal Service officials are preparing for demand to shift toward their organizations if UPS and its workers can’t reach a final deal. (NBC News) Raw material input pricing pointed mostly downward through the second quarter except for various types of paper, a commodity impacted by timber shortages driven by the Russia – Ukraine war.

Diesel fuel prices continued a months-long retreat across the US and Canada in Q2.

Chinese factory output contracted in each month April through June, revealing continued weak economic momentum for the country after its ending of strict zero- tolerance Covid 19 policies.


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