Skip to main content

Supply Chain Shortages Have Eased

By November 8, 2023Uncategorized

Global supply chains have largely recovered from the shocks experienced by the onset of the Russia-Ukraine war, with industries such as energy and food witnessing price and supply shortages ease significantly compared to the highs of 2022. This is according to Efficio’s latest report, Category Insights & Outlook H2 2023 which provides a summary of global supply chains as of Q3 2023. The report highlights that while there have been signs of recovery – the external challenges that hindered growth over the last year still remain, emphasising the need for global markets to remain vigilant against future risk.

The Category Insights & Outlook H2 2023 report is the second release in Efficio’s research series, which takes an in-depth look into key categories that have experienced significant changes over the last six months: this time, energy, food & agriculture, logistics, and metals. The report outlines the trends and challenges that these different categories pose and outlines what affected organisations can expect over the short and medium term, and how they can overcome, and even prosper, in these uncertain times.

The report found that, while prices of electricity and gas have trended downwards from their record highs last summer, global supply/demand dynamics remain unstable – with weather extremes and the slow transition to renewables cited as additional risks on the horizon. The cost of fuel continues to lead to a pattern of instability, with continued geopolitical uncertainty.

The high commodity prices and supply shortages in the food and agriculture industry have also eased considerably compared to last year. However, the market remains volatile and continues to be marked by supply chain risks and macroeconomic pressures.

Simon Whatson (pictured), Vice President at Efficio, comments:

“After the turbulent few years all industries have faced, 2023 has shown promising signs of how conditions might improve across even the most impacted of categories. Nonetheless, the situation remains volatile, uncertain, complex, and ambiguous. The development of future-proofing strategies, investment in and access to the right talent, and increased investment in digital innovation will continue to benefit those businesses amid the unpredictable environment we continue to face. We expect to see more business announcements of long-term strategy choices to weather future disruptions, particularly in relation to potential geopolitical uncertainty and environmental risks.”

Other key findings from the report include:

• Gas and oil prices have fallen by 51% and 9% respectively since the start of Q1 this year, as economic recovery has wavered in Europe and South-East Asia. However, the market remains vulnerable to various supply and demand-side uncertainties.
• Global electricity observed a return to growth, as demand has increased by 2% above the pre-pandemic average.
• Metal prices are forecast to fall by 8% in 2023 and a further 3% in 2024. Prices are expected to remain volatile, although many have been easing with the recovering Chinese economy.
• The transport and logistics sector is expected to grow 4% in 2023 and a further 3% in 2024, albeit still being affected by the ongoing war in Ukraine and a slower-than-expected recovery of global demand, particularly from China.
Ocean freight rates have seen a dramatic decrease compared to 2021 and 2022 highs (down 77% YoY in Q2, according to the Shanghai Containerised Freight Index), with global trade including shipping, now entering a period of slower growth. Meanwhile, the air freight market has stabilised significantly from the volatility experienced up until Q2 2022.
• The UN Food and Agriculture Organisation’s (FAO) global food price index fell to 122.3 points, its lowest level in more than two years and 23.4% below an all-time peak reached in March 2022.

Find out more insights and advice on each of these four key sectors, and get support from procurement and supply chain experts on how to navigate these uncertain times, here

The post Supply Chain Shortages Have Eased appeared first on Logistics Business® Magazine.

Global supply chains have largely recovered from the shocks experienced by the onset of the Russia-Ukraine war, with industries such as energy and food witnessing price and supply shortages ease significantly compared to the highs of 2022. This is according to Efficio’s latest report, Category Insights & Outlook H2 2023 which provides a summary of global supply chains as of Q3 2023. The report highlights that while there have been signs of recovery – the external challenges that hindered growth over the last year still remain, emphasising the need for global markets to remain vigilant against future risk.

The Category Insights & Outlook H2 2023 report is the second release in Efficio’s research series, which takes an in-depth look into key categories that have experienced significant changes over the last six months: this time, energy, food & agriculture, logistics, and metals. The report outlines the trends and challenges that these different categories pose and outlines what affected organisations can expect over the short and medium term, and how they can overcome, and even prosper, in these uncertain times.

The report found that, while prices of electricity and gas have trended downwards from their record highs last summer, global supply/demand dynamics remain unstable – with weather extremes and the slow transition to renewables cited as additional risks on the horizon. The cost of fuel continues to lead to a pattern of instability, with continued geopolitical uncertainty.

The high commodity prices and supply shortages in the food and agriculture industry have also eased considerably compared to last year. However, the market remains volatile and continues to be marked by supply chain risks and macroeconomic pressures.

Simon Whatson (pictured), Vice President at Efficio, comments:

“After the turbulent few years all industries have faced, 2023 has shown promising signs of how conditions might improve across even the most impacted of categories. Nonetheless, the situation remains volatile, uncertain, complex, and ambiguous. The development of future-proofing strategies, investment in and access to the right talent, and increased investment in digital innovation will continue to benefit those businesses amid the unpredictable environment we continue to face. We expect to see more business announcements of long-term strategy choices to weather future disruptions, particularly in relation to potential geopolitical uncertainty and environmental risks.”

Other key findings from the report include:

• Gas and oil prices have fallen by 51% and 9% respectively since the start of Q1 this year, as economic recovery has wavered in Europe and South-East Asia. However, the market remains vulnerable to various supply and demand-side uncertainties.
• Global electricity observed a return to growth, as demand has increased by 2% above the pre-pandemic average.
• Metal prices are forecast to fall by 8% in 2023 and a further 3% in 2024. Prices are expected to remain volatile, although many have been easing with the recovering Chinese economy.
• The transport and logistics sector is expected to grow 4% in 2023 and a further 3% in 2024, albeit still being affected by the ongoing war in Ukraine and a slower-than-expected recovery of global demand, particularly from China.
Ocean freight rates have seen a dramatic decrease compared to 2021 and 2022 highs (down 77% YoY in Q2, according to the Shanghai Containerised Freight Index), with global trade including shipping, now entering a period of slower growth. Meanwhile, the air freight market has stabilised significantly from the volatility experienced up until Q2 2022.
• The UN Food and Agriculture Organisation’s (FAO) global food price index fell to 122.3 points, its lowest level in more than two years and 23.4% below an all-time peak reached in March 2022.

Find out more insights and advice on each of these four key sectors, and get support from procurement and supply chain experts on how to navigate these uncertain times, here

The post Supply Chain Shortages Have Eased appeared first on Logistics Business® Magazine.

Leave a Reply