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Our supply chains are continuously evolving 🌀 and every day we find ourselves at the forefront of exciting developments 🧩 that shape the future of trade and logistics. We aim to ultimately bring to you a collection of news pieces and articles 📰 that justify the aforesaid perception of the supply chain ecosystem.
It has been some time since we last met you, and the global supply chain has since gone through some major troughs and crests. As we make another comeback, this issue of the newsletter brings you an updated round-up of what has traversed in the last few weeks.
Indian exporters, who had recently experienced some relief from the Red Sea shipping crisis, are now grappling with the prospect of increased freight costs and cargo flow disruptions. The capture of the MSC Aries has raised cargo insurance premiums due to heightened risks, while carriers may impose surcharges to mitigate operating challenges.
Flash floods and adverse weather conditions led to the temporary closure of Dubai International (DXB) airport and widespread flight cancellations and delays, and affecting the smooth flow of goods through one of the busiest air cargo hubs in the world. This unprecedented weather event led to the cancellation of approximately 300 flights at DXB, causing substantial challenges for cargo operators.
In 2023 alone, the Baltimore Port handled approximately 50 million tonnes and USD 80 billion worth of cargo, including automobiles, machinery, agricultural equipment, liquefied natural gas, and sugar. The port's operations directly support over 15,000 jobs, with an additional 140,000 jobs dependent on its activity, emphasizing its critical role in the regional economy.
Trains navigating through the Dedicated Freight Corridor have achieved impressive speeds, averaging between 50-60 km per hour, with the potential to escalate to 100 km per hour. This speed is more than double the velocity of goods trains operating on conventional Indian Railways tracks, where speeds typically range between 20-25 km per hour.
Taiwan, responsible for 80–90% of the world's high-end chip production, including vital suppliers like TSMC, faced challenges as the earthquake forced evacuations and halted operations briefly. Yet, TSMC managed to resume production within less than 10 hours, with minimal reported damage to critical equipment, easing concerns for the Indian electronics sector.
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India's Ministry of External Affairs (MEA) has given the green light to India Ports Global (IPGL) to oversee operations at Sittwe Port, nestled along the Kaladan River. This decision marks a significant stride in India's maritime strategy considering that IPGL already manages container terminals at Chabahar Port, Iran.
The surge in US import volumes from India and the increasing share of inbound containers from the South Asian powerhouse indicate a pivotal moment is underway. Major retailers and manufacturers (Tesla, Apple, and Samsung) are pouring investments into India, marking a clear departure from their reliance on China.
According to the United Nations, multinational corporations are recognizing India as an alternative manufacturing hub for supply chains, positioning the nation as a 'strong' recipient of foreign investments. India is benefiting from growing interest from multinationals, which see the country as an alternative manufacturing base in the context of developed economies' supply chain diversification strategies.
The surge in demand was attributed to a combination of factors, including the flourishing e-commerce sector and concerns over disruptions in ocean freight services due to the conflict in the Red Sea region. These dynamics have led to a notable increase in airfreight volumes, particularly from the Middle East and South Asia, as shippers swiftly shifted services from sea to air to circumvent delays.
The industrial and warehousing sector in India experienced a notable surge in leasing activity during the first quarter of 2024, marking the highest supply increment in the last two years. According to data from Colliers India, new supply reached close to 7 million square feet, with approximately one-third of Grade A developments concentrated in the Delhi NCR region.
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