Product-to-Market Pathway
Risk Scale
SUMMARY: Raw material availability and supply chain functionality improvements through the back-half of 2022 is expected to continue through 2023, though Covid resurgence in China and ocean freight line profit-seeking linger as potential threats to sustained recovery.
Low
Moderate
High
Factory-to-Port Outbound Logistics
Ocean Transport Inbound to North America
DC-to-Customer Outbound Logistics
Raw Materials
Manufacturing
Vancouver’s vessel wait time is 6 days, trucker order lead time is averaging around 10 days for all container types. Rail dwell time is around 17 days. Current dwell time in Montreal is 9 days. Labor availability has improved and is expected to remain strong through the winter 2023 in Montreal. (Hillebrand Gori)
China has declared just 11 Covid deaths among its 1.4 billion people since Nov. 19, despite seeing an exponential surge in pandemic cases after the government’s loosening virus policy in the fourth quarter. This fuels suspicion that the true scale of fatalities is being hidden (and portends the potential for reversion to lockdowns and production interruptions in 2023). ( Bloomberg)
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Cost indices for raw materials used throughout foodservice packaging products industry continued to trend lower through the fourth quarter of 2022.
Container lines are shoring up falling freight fees with ‘blank’ or ‘void’ sailings -when a vessel misses a port call or section of a planned voyage. This is usual practice when capacity outstrips demand, and sends a clear signal that carriers are bracing for tougher times. 100 sailings have been cancelled on major routes between 12 December and 15 January - 14% of the overall 724 sailings scheduled. (Maersk, Drewry)
North American trucking freight shipping rates declined throughout 2022 and industry experts predict contract rates for truck transport
to be down about 14% by mid-2023.
Availability of most commodity inputs for manufacturing foodservice packaging supplies has recovered to pre-pandemic normal, though some sporadic supply scarcity pops up paper and pulp items and aluminum.
Spot prices for truck shipments could potentially rise late in 2023 depending on whether forecasts of driver retirements increases heading into 2024. (Commercial Carrier Journal)
Relative-normalcy has returned to glove manufacturing and to the glove consumption market, in general. Demand has rebalanced with supply, product quality and supply availability stable and the erratic consumption behaviors seen throughout the pandemic have ebbed. Challenges do remain, however; energy costs, specifically natural gas, and labor expense have spiked across Asia, causing major glove makers in Malaysia and China to signal the potential for idling production to constrict supply, potentially setting the stage for increased prices in coming months.
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Q1 2023 Market Update
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