Supply disruptions cause dip in German industrial orders
German industrial orders decreased unexpectedly in April on falling domestic demand, as supply chain disruptions held back manufacturers in Europe’s largest economy. Orders for industrial goods fell by 0.2% in seasonally adjusted terms, the first drop this year after three successive increases.
The German economy contracted by 1.8% in the first quarter as lockdown restrictions in place since November dampened household spending, and raw material shortages created manufacturing bottlenecks. The economy has endured the pandemic much better than neighboring countries like France or Italy.
Carsten Brzeski, global head of macro at ING, linked the drop in orders to supply chain disruptions that were made worse by the blockage of the Suez Canal in early April. “After the very disappointing start to the second quarter, with retail sales dropping by 5.5% month-on-month in April, the second hard data point for the quarter suggests that the expected rebound of the German economy has been slower than expected.”
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Congestion and container issues increase at Yantian and southern China ports
Delays, congestion and container availability issues are increasing at ports and terminals in southern China, including Yantian, Shekou and Nansha. Operations have slowed as authorities restrict business activity as they aim to stem COVID-19 outbreaks. Container availability has dropped at the three ports.
Container lines are skipping the ports of call, which means empty boxes are not getting delivered at the ports. “Many shippers will likely face long delays or higher prices for equipment if they can’t avoid using the affected ports,” Johannes Schlingmeier, CEO and founder of Container xChange, said in a statement.
Supply chain congestion surrounding the Pearl River Delta will no doubt ripple to global supply chains, given the volume of goods and exports that flow out of southern China. The issues at Yantian are the latest in many global container issues which have impacted shippers, forwarders and carriers for more than a year – from port congestion, to equipment shortages, to blank sailing, to increasing freight rates. Analysts and industry stakeholders do not anticipate a swift resolution to the port congestion or container availability issues at ports in southern China.
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HEMA buttons up omni-channel supply chain transformation with Blue Yonder
Leading department store retailer, HEMA, has been able to improve its demand forecasting and fulfilment capabilities to meet customer demands, thanks to its recent digital transformation with Blue Yonder’s cloud-based Luminate Planning. Ensuring that the right inventory is available to meet customer demands has become even more important during the COVID-19 pandemic.
HEMA stores offer only 100% HEMA-designed products, and the company has recently began selling its products via wholesale partnerships. Seeking an end-to-end omni-channel supply chain solution to optimize its demand forecasting and omni-channel fulfilment capabilities, the retailer has turned to Blue Yonder.
The retailer implemented Blue Yonder’s Luminate Planning demand forecasting and fulfilment capabilities to all product groups and channels in 2020. HEMA uses demand forecasting to supply the correct inventory through the distribution network to minimizing stock-outs and maximizing inventory turns.
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