Jaguar Freight | The Weekly Roar: Change & Disruption: The New Constants

In this week’s Roar: Asia’s changing manufacturing economy, U.S. production contraction, the effect of unpredictable trade policies, a potential two-tier market for container shipping, and more hackers are targeting global supply chains.

Signs of who will be the winners and losers from the trade wars are emerging. Asia’s key manufacturing economies were sluggish in November, with PMIs showing contraction in China, Japan, South Korea, and Taiwan, despite what appears to be meaningful progress in U.S. trade negotiations. But it’s not all bad news, since Southeast Asian countries like Indonesia and Vietnam continue to see growth, and for the sixth consecutive month, Korean exports are up. Overall, despite some clarity on trade deals, underlying uncertainty is keeping a lid on any broad-based recovery.

Are tariffs having the intended effect on U.S. companies? Not yet, it seems. U.S. factory activity contracted for the ninth straight month, with orders dropping at the fastest pace since July and manufacturers facing ongoing uncertainty from tariffs and rising input costs. November’s ISM index fell to 48.2, making the longest slowdown in years even longer. Producers are seeing weaker customer demand, shrinking backlogs, and a rise in layoffs. Most sectors have reported contractions, and the ongoing uncertainty around tariffs is putting a hold on fresh orders and impeding recovery in the industry.

The U.S. removing tariffs on UK pharmaceuticals might be something of a breakthrough, but it also highlights how unpredictable shifting trade policies have become. Even as exemptions are granted and new deals are signed, sector-specific tariffs and ongoing investigations make it clear that uncertainty persists and may never fully disappear. As long as the U.S. uses tariffs as a tool of leverage, often seemingly changing them on a whim, supply chains will have to continue operating in an environment where little is understood or predictable.

Global container shipping might be heading into a two-tier market, thanks to the glut of megaships on main East-West routes and a growing shortage of small and mid-sized vessels on regional and secondary trades. Excess capacity exists where demand is flat, but elsewhere, connectivity is limited due to aging, under-replaced smaller vessels. According to analysts, this imbalance will lead to service gaps, volatility, and higher rates for regional routes for the rest of the decade.

Geopolitical tensions have hackers targeting global supply chains, exposing new vulnerabilities as companies switch up suppliers and routes. The more supply chains become interconnected and increase their reliance on third parties, the more cyber risks multiply. The bad news? Most firms don’t have full visibility into their vendors’ security. Security can’t be something optional or internal only. It has to be prioritized at the highest levels and extend across every link in the supply chain.

For the rest of the week’s top shipping news, check out the article highlights here.

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