Weekly Roundup - Europe’s Factory Slump, Shipping Rates Surge and Amazon’s Tax Evasion

Expectations for a second-half recovery in Europe's industrial sector were dashed as recent data revealed continued struggles. Monthly purchasing managers' reports indicated a deeper contraction in Germany’s factory sector, which has been in decline for two years. France’s manufacturing PMI also fell short, remaining below expansion levels for the 18th consecutive month. Germany faced declines in both manufacturing and services, hindering its anticipated recovery, while France showed some resilience, possibly due to the upcoming Olympics. Across the euro area, the manufacturing PMI dropped to its lowest level this year. Additionally, input prices rose at a faster pace, while output prices saw only a slight decrease, complicating efforts for inflation control.

Recent hostilities between Yemen’s Houthis and Israel have intensified, with the Houthis attacking Tel Aviv and Israel retaliating near Hodeidah port. This conflict has significantly impacted shipping markets, causing transport costs to surge. Container shipping rates have skyrocketed from $1,660 to nearly $6,000 for a 40-foot container. Crude oil tankers are shifting to carry fuel as refined product ships become more lucrative due to the Houthis’ sea drone attacks, which force diversions around Africa. These attacks pose dangers to sailors and the environment, evidenced by a recent oil slick in the Red Sea. Despite these disruptions, oil prices remain stable with low market volatility. However, the high earnings in shipping markets are driving up goods costs, indicating possible future economic repercussions.

An Italian unit of Amazon is under investigation by Milan prosecutors for suspected tax evasion, according to sources. This inquiry is separate from a recent incident where Italy's tax police seized €121 million ($131 million) from another Amazon unit due to alleged tax fraud and illegal labor practices. The current investigation, which began in 2021, was initiated following routine checks by tax police north of Milan. It focuses on tax regulations concerning the domestic and international trading of goods, specifically value-added taxes and customs duties. The extent of the potential tax evasion is still unknown. Amazon has not commented on the matter.

Cloud4Log, a digital application for the delivery note process, launched a new self-service solution for drivers. This update allows drivers to independently register deliveries via self-check-in at goods receipt locations, addressing inefficiencies of paper-based delivery notes. The new feature, developed in collaboration with GS1 Germany and the Federal Association of Logistics, simplifies the receipt process by enabling drivers to input data on tablets and supports 14 languages for seamless communication. It also eliminates physical documents through digital data collection and signatures. The dm-drogerie markt, a key partner in the project, implemented the service at its Waghäusel distribution center on July 10, and it is now available at all three dm distribution centers.

Read more on recent highlights

• Porsche profits dampened by model revamps, China slump
• Rolls-Royce boss warns of prolonged supply chain strains
• What fashion can learn from other industries’ supply chains
• Walmart looks to bet $200 million on autonomous forklifts
• Open Logistics Foundation launches pilot project for secure customs processes
• Investors, NGO target Nike over unpaid Thai, Cambodian supply chain workers
• CrowdStrike outage creates ripple effect across global supply chain
• Germany’s supply chain law tries to balance growth and human rights
• Microsoft's costs in focus as fears rise over slow payoff from AI

Dive deep into research

"A multi-period optimization model for medicine supply chains using modified interactive multi-objective fuzzy programming" by Sugapriya, C., Nagarajan, D., Gobinath, V.M. and Kuppulakshmi, V. (2023)

"Artificial neural networks in supply chain management, a review" by Soori, M., Arezoo, B. and Dastres, R. (2023)

Events

Gartner Supply Chain Planning Summit 2024

When: 14. - 15. October 2024

Where: London, UK

What: Today’s supply chain planning landscape demands more than just forecast accuracy. It requires intelligent decisions to balance margin, cash and growth to deliver true value. Supply chain planning leaders are responsible for accelerating transformation enabled by technology and the right culture to provide scenarios that help organizations orchestrate these impactful decisions. At  Gartner Supply Chain Planning Summit 2024, join supply chain planning leaders on the journey to move beyond accuracy and build a future powered by collective value creation.

the HUB

When: 22. - 24. October 2024

Where: Amsterdam, Netherlands

What: The possibilities for e-commerce logistics are limitless due to the rapid advancement of technology and the increasing demand for online shopping. Exciting innovations have emerged in various areas, including AI-powered algorithms for intelligent inventory management; automated warehouses; eco-friendly packaging solutions; reverse logistics and cross-border e-commerce. These advancements are propelling the industry toward a future that is faster, more efficient and sustainable.

European Supply Chain Management Strategies Summit

When: 5. - 6. November 2024

Where: Munich, Germany

What: The summit will once again bring together an exceptional line-up of the industry's best speakers, with technical experts, industry leaders, and specialists providing an unmissable two days of the latest information. There will be plentiful networking times, expect to meet fellow industry leaders, enabling meetings, connections, and business growth.