If you thought the global supply chain would in 2022 be back to pre-pandemic status, you might want to reconsider.
A new survey of supply chain executives by Carl Marks Advisors, in partnership with SupplyChainBrain, underscores the deep and lasting impact of COVID-related supply chain disruptions.
According to the research, more than half of all respondents don’t expect a return to a more normal supply chain until the first half of 2024 or beyond, while 27% say they expect disruptions to continue until the second half of 2023. They also see a number of leading threats complicating a return of a more reliable supply chain, most notably the war in Ukraine (30%) and labor concerns (24%).
Glove supply is in solid shape
Now don’t get despondent, glove distributors. AMMEX is logistically ahead of the game and has its inventory lined up well in advance. While there may be pricing adjustments down the road, for the most part the disposable glove marketplace should remain consistent.
Capacity at the glove manufacturing level is strong. There is plenty of inventory, and more is ready to ship. Because of the considerable lead time involved, most of the gloves being sold today were produced before the war in Ukraine even started.
Raw materials are something of a wild card. Both nitrile butadiene rubber and polyvinyl chloride are tied closely to the cost of petroleum, so high oil prices will likely boost the cost of nitrile and vinyl gloves down the road—but how far, no one knows. Natural rubber latex is also expensive because of costs being carried by farmers.
Shipping is always the No. 1 cost
And because gloves are made in Southeast Asia and must travel halfway around the world to get to the U.S., the largest factor in the price of gloves is shipping costs—although those have begun coming down.
Transpacific shipping costs have fallen by 53% in the past three months; on July 8 it cost $7,409 to transport a 40-foot container from China to the U.S.’s largest gateways for trade on the West Coast on a long-term contract. According to the Freightos Baltic Index, that same container cost $15,764 to transport on April 15. The drop in shipping prices comes as the Ocean Shipping Reform Act has been in effect for about a month.
Inflation continues to be a problem, especially around consumer prices. U.S. inflation likely reached a new 40-year high in June, as prices soared by 9.1 percent, compared with a year ago. Inflation is showing few signs of letting up, compounding the pressure on the Federal Reserve and White House to ratchet up their response.
A little less sting at the gas pump
So far in July, gas prices have fallen from the eye-watering $5-plus a gallon reached in mid-June to an average of $4.66 nationwide. The price of diesel fuel, the fuel that powers the nation’s fleet of trucks, which deliver the goods that make the country run, has also dropped around 20 cents per gallon.
The roller coaster ride that has been the supply chain of the last two years is far from over. Food, fuel, and housing will continue to cost substantially more. But the disposable glove market looks stable for the time being.
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