Near-Term UPS Teamsters Strike
The United Parcel Service (UPS) is facing an impending strike by its workers, a situation that demands our attention and understanding.
The dedicated employees of UPS have long been the backbone of reliable package delivery services, ensuring that our parcels and important LTL and FTL shipments reach their intended destinations promptly and securely. However, due to unresolved issues between the company and its workforce, a strike is looming on the horizon. Word around the campfire is this will happen August 1st and the union is pushing for it (2).
The disruption of UPS’ operations could lead to delays in deliveries—affecting businesses, e-commerce, and individual customers alike. Packages and shipments may not arrive on time, causing inconvenience and frustration for all parties involved.
Very Near-Term Yellow Bankruptcy
Yellow, a prominent transportation company, is facing a financial crisis that may lead to a declaration of bankruptcy. It is crucial that we come together to understand the potential impact of this and support those affected during this challenging time.
Yellow has long been a key player in the transportation sector, providing vital shipping and logistics services that help businesses and economies run smoothly. However, the complex and competitive nature of the industry, combined with various internal and external factors, has led Yellow to the brink of insolvency.
The potential bankruptcy of Yellow raises concerns regarding its ability to continue its operations (3). If the company were to declare bankruptcy, it could lead to disruptions in shipping services, delayed deliveries, and potential job losses for their dedicated employees. These ripple effects could have a significant impact on businesses, industries, and individuals who depend on Yellow’s services.
Vancouver Port Strike – Happening Now
The on-again, off-again strike that is threatening to disrupt billions of dollars in trade flowing through Vancouver’s port is off-again, after the union rescinded a 72-hour strike notice that would have sent workers to the picket line on Saturday. Last week, the 13-day strike seemed to end with a mediated settlement. However, port workers went back to the picket line late Tuesday, rejecting the mediated settlement as insufficient (4). In a statement, the union said the four-year deal was too long, and the mediator’s recommended settlement offered members no long-term protection.
The International Longshore and Warehouse Union Canada will hold another meeting on Tuesday, July 25th. In it, “Union leadership says it is going to recommend its members accept a tentative agreement to end the weeks-long strike at B.C.’s ports” (5).
Even with this slight pause, it looks like the strike will continue to put pressure on Seattle, Tacoma, Portland, and even Long Beach.
Expect a 10–15-day delay on West Coast inbound containers.
Mitigating Your Logistics Exposure
If you have orders in place, get them on trucks now, particularly if you are expecting time-sensitive deliveries that involve precious line-time. Consider placing orders well in advance to allow for possible delays.
Keep yourself updated with the latest news and developments regarding the Teamsters’ strike and Yellow. Check in with reliable sources regularly, like your Icon Foods representative, and stay informed about any changes that may affect your shipments.
Russia Withdraws from Black Sea Grain Initiative – Long Term
Russia, one of the leading grain producers in the Black Sea region, recently announced its decision to pull out of the Black Sea Grain Initiative. This decision demands our attention as it may influence the price and availability of corn worldwide.
The Black Sea Grain Initiative is a collaborative effort among several countries in the region, aimed to enhance cooperation in the production, trade, and export of grains such as corn, wheat, and barley. Russia’s withdrawal from this initiative raises concerns about potential disruptions in the grain market and subsequent effects on prices and global trade (1).
Corn is a staple crop with diverse applications. It is the largest source for glucose and is the substrate for many ingredients—from citrates, to citric acid, to polyols like erythritol. Russia’s considerable presence in the Black Sea region has played a crucial role in the production and export of corn, making their withdrawal a matter of concern for market participants worldwide.
The implications of Russia’s decision to withdraw from the Black Sea Grain Initiative are multifaceted and may take time to fully manifest. However, several potential effects are worth considering when it comes to the price of corn in the global market.
Russia’s withdrawal could lead to a decrease in corn supply from the Black Sea region, potentially impacting global availability. This shift in supply dynamics may lead to increased competition among other major corn-producing countries, thus putting upward pressure on price as demand increases.
It is important to acknowledge that various factors will determine how much corn prices and the global market are affected. Those factors include supply and demand dynamics, weather conditions, and trade policies among nations. Close monitoring of market developments and expert analysis will be necessary to gain a comprehensive understanding of the situation as it unfolds.
China takes most of their corn from the USA, Mexico, and Brazil. This situation could increase demand and pricing.
How to Mitigate Your Exposure
Erythritol prices are at a historic low. There is still a lot of material in the market. By my calculation, there is around 6500 metric tons. This will put downward pressure on prices for the next six to eight months. After that point, when the excess material is burned up, we will see a gradual increase. My prediction is a 20-25% increase by Q2 2024.
Savvy buyers will start contracting their raw materials over the next year.
The house is not on fire, but somebody left the stove on. We all have a lot of scar tissue from COVID and the 2021-2022 supply chain meltdown. If you have stuck with Icon Foods through thick and thin—thank you. We have a well-diversified supply chain for our entire portfolio of sweeteners, fibers, and inclusion, so you will never see disruptions even when the world is falling apart.
We are infinitely grateful for your business.
Sources
- Byrne, Jane. “Russia Withdraws from Black Sea Grain Export Deal.” Feed Navigator, 17 July 2023, www.feednavigator.com/Article/2023/07/17/russia-withdraws-from-black-sea-grain-export-deal.
- Ivanova, Irina. “UPS Workers Poised for Biggest U.S. Strike in 60 Years. Here’s What to Know.” CBS News, 21 July 2023, www.cbsnews.com/news/ups-strike-2023-teamsters-what-to-know/.
- Rappeport, Alan. “Facing Bankruptcy after a $700 Million Bailout.” The New York Times, 27 June 2023, www.nytimes.com/2023/06/27/business/yellow-trucking-bailout-teamsters.html.
- Scherer, Steve. “Canada’s Port Workers Union Leadership Backs New Contract Deal.” Reuters, 21 July 2023, www.reuters.com/world/americas/some-dock-workers-employers-canadas-pacific-port-reach-tentative-deal-2023-07-21/.
- “Union Leadership Recommends Members Accept Tentative Deal to Avoid Another B.C. Port Strike | CBC News.” CBC News, 22 July 2023, www.cbc.ca/news/canada/british-columbia/bc-port-strike-tentative-deal-1.6913640.
