Above the Fold: Supply Chain Logistics News (June 9, 2023)

My youngest son graduated from high school yesterday. A happy milestone, for sure, but I couldn’t help but think of this sad truth which Tim Urban illustrated in a December 2015 “Wait But Why” blog post:

“It turns out that when I graduated from high school, I had already used up 93% of my in-person parent time.”

In short, if you add up all of the in-person time my wife and I will ever spend with our son, we’ve already spent about 90% of it. In Urban’s case:

During my first 18 years, I spent some time with my parents during at least 90% of my days. But since heading off to college and then later moving out of Boston, I’ve probably seen them an average of only five times a year each, for an average of maybe two days each time. 10 days a year. About 3% of the days I spent with them each year of my childhood.

This is already happening with our two older children, one who graduated from college last year and the other heading into his senior year but spending the summer away from home working at an internship in Ohio. My wife and I couldn’t be happier for them, even if we only spend a fraction of the time we used to with them.

Our table for 6 will soon be a table for 3, with our youngest daughter just finishing up her freshman year in high school. She’s begging me to take her with me on a business trip to Barcelona in September. At her age, who wouldn’t want to miss the first week of school and go to Europe instead? Or maybe she too understands the math of time, how six becomes three, then becomes two, and then…

Moving on, here’s the supply chain and logistics news that caught my attention this week:

Hazy Skies Over Supply Chains

US East Coast blanketed in veil of smoke from Canadian fires,” was the headline in Reuters yesterday. Boston has been spared the worst of it, but we’ve been in a chilly, drizzly, and dreary weather pattern for the past few days.

A lot of hazy skies everywhere, it seems. The same can be said for the world economy and supply chains.

First, there’s the labor issues.

“Most container ships through the biggest import gateway in the US face delays as labor-related disruptions widen on the West Coast and threaten another cargo logjam,” reports Laura Curtis in Bloomberg.

Meanwhile, Vanessa Yurkevich at CNN reports that “UPS workers will vote this week on whether to authorize a strike if their union – the International Brotherhood of Teamsters – does not reach a new contract with UPS by August 1st. The vote results will be announced next week on June 16, the union said. Strike authorization votes are routine during contract negotiations, and almost always pass.”

None of this should be surprising, since these risks have been talked about for many months. Yet, what was hypothetical yesterday is becoming a reality today. As is always the case, companies that have been planning for these labor actions and disruptions already will be in a much better position to minimize the impact than those just getting started today.

Second, you have the sluggish state of the world economy.

“In the first three months of the year, economic output in the eurozone dropped 0.1% compared with the previous quarter, according to revised official data published Thursday,” reports Olesya Dmitracova in CNN. “In the fourth quarter of 2022, output also dipped 0.1%, the figures showed.”

The World Bank also issued a “good news, bad news” report. As summarized by Reuters:

The World Bank on Tuesday raised its 2023 global growth outlook as the U.S., China and other major economies have proven more resilient than forecast, but said higher interest rates and tighter credit will take a bigger toll on next year’s results.

Real global GDP is set to climb 2.1% this year, the World Bank said in its latest Global Economic Prospects report. That’s up from a 1.7% forecast issued in January but well below the 2022 growth rate of 3.1%.

And on the logistics front, “Retailers are shedding warehouse space and paring back their logistics networks now that the disruptions that slowed supply chains during the Covid-19 pandemic have largely receded and consumer spending patterns are shifting toward services,” reports Liz Young in the Wall Street Journal.

When will these hazy skies clear? Nobody really knows for sure, but some optimists see brightening skies in the second half of the year. Others say wait until sometime in 2024. 

Only time will tell.

And with that, have a happy weekend!

Song of the week: “Time (Clock Of The Heart)” by Culture Club