Newsletter Blast: Magaly Blanco joins City Global, Ukrainian Crisis Impacts Global Supply Chains, & the Latest Trending Products
GLOBAL
Ukraine Humanitarian Crisis: How You Can Help
As we speak, a refugee crisis is unfolding as a result of the conflict in Ukraine. Some four million people, primarily women, children and the elderly, are expected to flee the conflict in the coming weeks. City Global's freight partner, Flexport.org, is organizing shipments of relief supplies to refugee sites in Poland, Romania, Hungary, Slovakia and Moldova.
Why donate to the Flexport.org Fund
It’s estimated that 60% of all the goods delivered in response to natural humanitarian crises can go to waste. The reason is simple, but complex: lack of logistics coordination. The wrong goods, sent to the wrong place, at the wrong time.
What Flexport.org is doing now
Flexport.org, the impact group of Flexport, was created to address this problem. Since 2016, we have delivered over 16.5 million lbs of relief supplies to over 60 countries. Shipments funded by the Flexport.org Fund have reached more than 100 million people around the world. But there’s more to do.
To deliver those goods, Flexport.org is chartering cargo planes as well as passenger planes that have been grounded as a result of reduced air travel due to Covid-19. Our airline partners have agreed to provide this capacity at extremely low cost.
How you can help
→ Please donate!
Visit Flexport.org/donate to contribute. Your donations may be tax deductible. $400,000 can fund a planeload of supplies delivered to refugee sites in Poland, Moldova, Romania, Slovakia and Hungary. That could could contain:
325 hospital beds and mattresses, or
85 pallets of medical supplies such as gowns, bandages, airway kits, and suture equipment, or
1350 cartons of sanitation kits.
→ Spread the word by posting a link to Flexport.org/donate on your social media and asking followers to share.
In today’s edition:
Latest Cultural & Marketing News
Latest Happenings at City Global
Navigating Global Supply Chains & Logistics
Trending USA-made & Asia-Pacific products that are available for Prototyping Now
LATEST HAPPENINGS AT CITY GLOBAL
City Global's Ryan Delos Solon was married this past week in the beautiful mountains of Big Sur!
Please join us in congratulating him on this beautiful occasion!
Magaly Blanco joins City Global in our Beverly Hills office as a Brand & Product Architect.
Please join us in welcoming her to the collective!
BRANDS
How companies have responded to Russia’s invasion of Ukraine
It’s been a week since Russia invaded Ukraine, and companies have responded by pulling the financial rip cord—suspending services and sales, sometimes as a sign of solidarity or to comply with sanctions.
Here’s a look at some of what we’ve seen so far:
Apple is “deeply concerned” about the invasion and has paused the sales of its products in Russia.
TripAdvisor and Google Maps have suspended the ability for users to post reviews of some listings in Ukraine, Russia, and Belarus, per the Wall Street Journal, “in response to an influx of political statements posted as reviews to businesses and tourist destinations in the region.”
H&M and Ikea have suspended sales in Russia.
Visa and Mastercard have banned some Russian financial institutions from their networks, and have pledged $2 million each in humanitarian relief for Ukraine.
Meta announced that it would stop recommending content from Russian state media on Instagram and Facebook.
Snap has “stopped all advertising in Russia, Belarus, and Ukraine,” and has pledged more than $15 million in humanitarian aid for Ukraine. Twitter has also paused ads in Ukraine and Russia.
Nike has halted online orders in Russia because it “cannot guarantee delivery,” per Reuters. Adidas also halted its partnership with the Russian Football Union, joining soccer’s governing bodies FIFA and UEFA in “censuring Russia.”
DirectTV has dropped RT America, accelerating the timeline of a deal that was set to expire at the end of the year.
Airbnb has said it will arrange free short-term housing for up to 100,000 refugees fleeing Ukraine.
Hermès, Chanel and Gucci among luxury fashion brands to close Russian stores.
Three in four Americanss urveyed by Morning Consult said they support companies cutting business ties with Russia and halting sales of products and services in Russia. Morning Consult
MEDIA
Netflix will no longer chill in Russia.
The streaming giant, which had four Russian originals in the works, has reportedly halted all future projects and acquisitions in the country amid Russia’s invasion of Ukraine.
The pause is one of several moves by entertainment giants as they weigh their current and future business arrangements in the country. Most of those decisions have been made at the Russian box office:
Disney paused Russian releases of upcoming theatrical films, including the animated Pixar film Turning Red.
Warner Bros. halted the Russian release of The Batman, which was slated to open there on Thursday.
Sony said it would postpone all theatrical releases, including the film Morbius.
Paramount Pictures said it would pause the theatrical debut of upcoming films, like The Lost City and Sonic the Hedgehog 2, in Russia.
Universal Pictures announced on Tuesday that it had “paused planned theatrical releases” in the country.
A unified front: The global entertainment industry is making other moves signaling their objection to the invasion and their support of Ukraine. The Stockholm International Film Festival and the Toronto Film Festival said they would ban Russian state-backed film organizations, while European TV company Banijay placed a freeze on all activity in Russia “until further notice.” The Motion Picture Association, the trade group and lobbying arm that represents most major film studios, issued a statement expressing its “strongest support for Ukraine’s vibrant creative community, who, like all people, deserve to live and work peacefully.”
Box-office breakdown: The Russian box office grossed $445 million in 2021, according to Box Office Mojo, but its size pales in comparison to other major markets around the world. The US box office grossed nearly $4.5 billion in the same year, while China, the largest box office in the world, exceeded $6.2 billion.—KS
Supply chains impacted by Russia’s invasion of Ukraine
The attack on Ukraine and sanctions enacted on Russia are expected to prompt shortages of key materials, drive already present inflation, and impact ocean and air shipping capacity, as reported by FreightWaves. Spot rates for container shipments are already up 16% out of Europe, and shippers are anticipating emergency fuel surcharges from ocean carriers, according to The Loadstar.
Read more: Routes, not Jets - Impact of Ukraine Conflict on Airfreight
FMC and DOJ double down on enforcing fair competition in shipping Supply Chain Dive has reported that the Federal Maritime Commission and the Department of Justice have announced a joint commitment to enforcing competition rules in maritime shipping. This announcement follows the White House’s efforts to promote competition as a means of lowering prices and strengthening the overall resilience of supply chains.
House Introduces Bill to Limit Trade Ties to Russia
In light of Russia’s invasion of Ukraine, two Members of Congress introduced legislation to severely curtail the US’s trade relationship with Russia. The bill calls for imports of Russian origin to lose normal trade relations (NTR) status; instead, imports would be subject to “Column 2” status and face higher tariffs and increased CBP scrutiny. However, the bill’s impact would have a limited impact, as US trade ties to Russia are small.
The Ocean Shipping Reform Act Reaches the Senate
On March 3, the US Senate held a hearing for the Ocean Shipping Reform Act, which the US House of Representatives recently passed. The America COMPETES Act also includes the Ocean Shipping Reform Act, enabling the bill to pass through Congress via a variety of paths.
Factory Output News
China continues to remove the equity cap, car manufacturers are taking more controls over joint venture and expect more car manufacturers coming to China in the future Source
Vietnamese and Singaporean businesses signed corporation deals valuing 11 billion USD in view of boosting investments and trades between both countries Source
Cambodia and China Guangxi signs deal to promote bilateral trade with China mainly interested in purchasing agricultural produce Source
Thailand to increase production of cars to 2 million per year by 2024 Source
Malaysia Infineon will be building its third manufacturing line in northwestern Malaysia Source
Indonesia announced plans to place two million electric vehicles (EV) on the road by 2025. This is part of the government’s greater plan to transition the country into the use of renewable energy and become a leader in EV manufacturing Source
Asia → North America (TPEB)
Rates remain strong and space outlook is expected to remain tight on TPEB. The moving market is primarily at premium levels. FAK space remains limited as capacity overall remains insufficient. Congestion is expected to continue to worsen, given market volatilities and global uncertainties. Fuel increases and disruptions to trade due related to the conflict in Eastern Europe as well as expected effects of the upcoming ILWU labor negotiations are important to bear in mind.
Rates Rate levels remain elevated and the premium market is strong.
Space Critical
Capacity/Equipment Critical/Severe Undercapacity
Recommendation Book at least 4 weeks prior to CRD. Consider premium options. Be flexible in regard to equipment and routings.
Asia → Europe (FEWB)
Following a slower period after Lunar New Year we are now starting to see some volume recovery and increased booking intake. However, the overall volume level still remains lower than pre-LNY. Space and equipment continue to be tight due to a very high amount of blank sailings in weeks 9 and 10. Towards the second half of March, a more normal capacity will resume. Schedule reliability is very low with many vessel shiftings and changes.
Rates Rates remain at a high level for the post-LNY period. Carrier rates have been extended or reduced for the first half of March based on the booking outlook.
Space Critical space situation
Capacity/Equipment Severe equipment shortage across all Asia origins.
Recommendation Book at least 3 to 4 weeks prior to CRD. Consider premium options, which may be limited. Be flexible in regard to equipment.
Indian Subcontinent → North America
New port omissions hitting key USEC services as congestion remains a challenge at Charleston, Savannah, Norfolk, and New York.
Rates trending upwards into March. Premium rate levels should be expected for small Indian ports and Bangladesh as demand exceeds vessel/equipment supply.
Space to the USWC is and will remain a challenge into 2022. Port omissions on services to the USWC continue to cut capacity out of the ISC. Recommendation is to move on premium services or look for alternative routing to USEC and transload to final destination.
Space to the USEC will be difficult into Savannah, Charleston, and New York until April as bunched vessels off the coast of USEC are resulting in longer turn-around time back to origin and port of discharge omissions. This leaves a gap of sailings for the most consistent services typically relied upon for ISC-USEC.
Equipment remains a challenge at smaller Indian ports in the South and South-East as well as inland container depots (ICDs). Carriers are encouraging shippers’ use of their own origin carriage services to mitigate equipment shortages. Equipment is normalized at key ports such as Nhava Sheva and Mundra.
Recommendation remains to load via wet port instead of using ICDs to avoid delays and accessorial fees.
Asia
N.China: The demand market slowly recovers with strong demand for Testing kit projects resulting in the rates increasing week over week. Due to the conflict between Ukraine and Russia, Russia-based airlines have canceled all their flights to EU.
S. China: Market demand is declining faster than supply, causing further rate decreases week over week. Covid remains a key issue in South China with the number of cross-border trucks reduced. Some TPEB flights remain canceled and overall demand is soft with rates continuing to drop. FEWB rates also continue to drop as demand is still slow to recover.
Taiwan: Capacity is expected to become slightly congested this week. The fuel surcharge will also increase starting on March 1. Overall, cargo demand is relatively flat and origin congestion has improved compared to previous weeks.
SE Asia: Demand ex-Vietnam and Thailand continues to be very soft with little indication when the market will pick back up. This situation may last until mid-March.
Europe
Demand remains modest this week, bigger projects are still on the market as shippers need to meet lead times from production delay.
Rates at a stable high level, in line with what we see at the beginning of March. Fuel surcharges are however increasing as the IATA jet fuel index hits the highest rates since 2015. Expect these high fuel surcharges to be passed through by the airlines for the coming months as the crisis in Ukraine continues.
Russian carriers are banned from European airspace, and a number of carriers are banned from Russian airspace. Capacity is otherwise stable.
Deferred routings are still providing a viable routing option if already tight lead times can take it. We also see cheaper options on the market to secondary hubs where airlines have regular passenger flights.
Limited terminal congestion reported across EU hubs.
Advice remains in place ex-EU: continue to place bookings early for optimal rates and solutions.
