Second of four parts
Disposable glove factories, especially in SE Asia, continue to optimize their production lines and face issues with labor availability. Some of the world’s largest manufacturers of disposable gloves are working to return to profitability and have stated that it will take well into 2025 to do so.
If factory utilization remains below 50% capacity—a common benchmark for determining whether a glove maker breaks even—which it did for a substantial portion of 2023, profits at the factory level will remain elusive. Many industry insiders predict the utilization rate will bounce back to above 50% in 2024-25 and rebound to the historical average of over 75%, but they warn of short-term turbulence ahead.
Logistics costs and the impact of inflation are expected to come down in the coming months, albeit slowly. For now, layoffs continue across the freight and logistics industry in the U.S., with companies in Florida, Georgia, Illinois, Michigan, and Texas announcing job reductions and facility closures.
On the high seas, ocean shipping expenditures react quickly to any disruptions. For example, turbulence in the Red Sea—a reaction to the Israel-Gaza war—continues to cause delays as Houthi rebels in Yemen strive to disrupt shipping with regular missile attacks on commercial shipping.
It will impact market conditions for the foreseeable future, especially on the U.S. East Coast. Some companies have chosen to sail around the Cape of Good Hope in South Africa instead of passing through the Red Sea and Suez Canal. The Panama Canal, which last year was forced to restrict passage due to dropping water levels, will be re-evaluated for the start of the 2024 rainy season.
No ocean disaster passes unnoticed
The recent collision of the container ship Dali with the Francis Scott Key Bridge outside Baltimore harbor will have repercussions for a long time. A massive cleanup operation is under way to clear the wreckage of the bridge from the Patapsco River. The immediate impact on ocean shipping is difficult to predict, but rest assured that it will cause delays and possibly higher shipping costs.
These scenarios force disposable glove suppliers like AMMEX to carry more inventory and safety stock to support our customers, which helps maintain our 98%-plus fill rates on core products. AMMEX is also the only supplier in the industry with local teams conducting 100% in-person product inspections on all containers shipped.
Download AMMEX’s entire Q2 Disposable Glove Market Update.