Packaging News

Continued Supply Chain Volatility Expected for Remainder of 2023: Report

Warehouse — *(Courtesy of The Smart Cube)*

The Smart Cube (a WNS company), a global provider of strategic research and analytics solutions, has released its latest Topical Insights Report with an outlook for the second half of the year. The report showcases the impact of key macro events on direct and indirect categories and which disruptions can be expected from a supply chain perspective across the respective level 2 and level 3 sub categories.

The report comes after a number of macroeconomic and geopolitical events have disrupted global supply chains in the first half of the year, such as Germany’s Supply Chain Due Diligence Act, continued war between Russia and Ukraine, earthquakes in Turkey and Syria, and the U.S. and Europe banking crisis.

Procurement experts from The Smart Cube project that these disruptions, combined with the incoming El Niño weather phenomenon, will drive price volatility for the second half of 2023.

The Topical Insights Report reveals that H2 2023's supply chain landscape is expected to be tumultuous, with fluctuating commodity prices, labor and material shortages, and shifting global dynamics influencing various industries, including industrial, consumer packaged goods (CPG), life sciences, and indirect categories.

Key highlights from the report include:

The aerospace industry continues to suffer from labor and raw materials shortages, leading to delays in delivery. This situation is likely to continue throughout H2 2023.
As base oil prices rise, major lubricant companies are expected to revise their pricing upward after having offered discounts during H1 2023.
Weak market demand and increasing supplies are likely to pull down the prices of steel, aluminium and nickel in the short term.
Global wheat prices are expected to slightly rise in Q3 2023 due to anticipated supply issues in the U.S., coupled with a rise in demand from animal feed in China and the EU.
Global sugar prices are expected to grow in H2 2023 primarily because of continuously rising demand from India, Indonesia and Thailand.
Global energy consumption is expected to increase by ~1.3% Y-o-Y in 2023.
After disruption caused by the Russia-Ukraine war, electricity supply is expected to improve in late 2023 as a result of increased natural gas supply from the U.S. and the Middle East.
U.S. electricity prices are expected to increase ~2% M-o-M in August 2023 across retail, commercial and industrial sectors.
Road freight rates will likely rise in H2 2023 as crude oil prices show an upward movement.

“The Smart Cube’s latest Topical Insights Report reveals the massive impact of numerous global disruptions and weather phenomena on the supply chains that underpin the global economy. According to our experts, all signs point to commodity price fluctuations, labor and material shortages, and continued volatility to influence various sectors for the second half of the year,” said Ritesh Kumar, Director of Procurement and Supply Chain Intelligence at The Smart Cube. “In an era characterized by unpredictability and macroeconomic events, being well-informed and agile is crucial for businesses, and preparing supply chains to mitigate risks and respond effectively to market fluctuations is paramount to maintain a competitive edge. Embracing the collaborative power of AI and human expertise empowers organizations to navigate challenges with foresight and adaptability, ensuring sustained success in today's dynamic landscape.”

Amid this unpredictability, businesses are urged to remain nimble and monitor changes affecting their supply chain carefully. For ongoing insights to inform strategic sourcing and category management, people can register for The Smart Cube’s on-demand digital procurement intelligence platform, Amplifi PRO, or contact The Smart Cube at enquiries@thesmartcube.com.

The Smart Cube was acquired by WNS (Holdings) Limited (NYSE: WNS), a leading provider of global Business Process Management (BPM) solutions, in December 2022.