[ad_1]
More suppliers, more supply chain complexity
Monday on The Stockout show, Grace Sharkey and I interviewed Christine Barnhart, chief marketing and industry officer of Nulogy.
(Photo: FWTV)
Nulogy is a company that helps consumer packaged goods companies manage data that is coming from suppliers, especially third-party contract manufacturers and co-packaging companies. While contract manufacturing and outsourced packaging were areas of great focus during the pandemic in the context of CPG demand surges, outsourced services are growing on a secular basis, according to Barnhart. Contract manufacturing and co-packaging are generally more expensive on a per-unit basis than performing those functions in-house, but offer the advantage of flexibility.
(Photo: FWTV)
For instance, a consumer packaged goods company could produce a baseload of volume in-house and use contract manufacturing for seasonal surges. Utilizing contract manufacturing is also ideal for startups or new product introductions where demand is highly uncertain. Bringing more third-party suppliers and contractors into the mix creates more room for supply chain disruptions if data is not adequately shared across suppliers. Improved supply chain data sharing helps consumer packaged goods companies right-size inventories and focus their promotional activity.
Watch Monday’s show here or get caught up on past episodes here.
A turn in the freight market may be coming
(Photo: FWTV)
On last week’s The Stockout show, Grace Sharkey and I interviewed Tracy Meetre, chief commercial officer of Sunset Transportation. While highlighting uncertainty related to consumer demand and the pace of transportation capacity exiting the market, Meetre’s best estimate is that the freight market could turn in carriers’ favor roughly at the end of this year’s third quarter.
Her recommendations for shippers to position themselves for a coming market turn include increasing the number of carriers in the routing guide and dealing with at least two brokers. In addition, she says shippers can make themselves preferred customers by keeping payment terms to carriers relatively short — something that Sunset Transportation does to support its ability to source capacity. Other topics on Monday’s show include warehousing availability and international/cross-border supply chains.
Aggressive pricing by small drayage carriers is keeping a lid on rates
SONAR inbound intermodal volume into a particular market provides insight into drayage demand in the coming days. Inbound intermodal volume is forward-looking because it is based on the date the container is in-gated at the origin rail terminal — typically a few days ahead of reaching the destination terminal. Drayage is a highly fragmented market, which makes drayage pricing opaque, but a forward look at demand helps carriers be more nimble with timely adjustments to pricing.
Chicago inbound containerized rail intermodal volume (all container sizes) for 2024, 2023, 2022 and 2021 shown in white, blue, green and yellow, respectively. Chart: FreightWaves SONAR.
Drayage carriers have told us in recent days that they have seen the smaller drayage companies price too aggressively for market conditions, in their view, which is keeping rates low. On the bright side, demand has been strong, particularly supported by imports and associated international intermodal volume (which includes 40-, 20- and 45-foot containers). The SONAR chart above shows why drayage carriers in Chicago should be busier than they were at this time last year. While still below 2022 levels, inbound loaded Chicago intermodal volume (includes containers of all sizes) is up 9.7% year over year since Jan. 1. That is being driven most heavily by inbound Chicago loaded international intermodal volume (primarily 40-foot containers), which is 18.1% above 2023 levels, year to date.
[ad_2]
Source link
