TAKEAWAYS
MANUFACTURING OPTIMISM REBOUNDS The manufacturing sector is feeling upbeat again, reporting the highest levels of optimism since June 2021, according to the latest Sikich Industry Pulse Report. The manufacturing executives surveyed rate their optimism an average of 7.07 on a scale of 1 to 10 , the highest rating in the past three years. ( See Rating Executive Optimism chart .) Contributing factors include an increase in customer demand and a decrease in labor challenges. Respondents also cite supply chain improvements and favorable economic conditions as reasons for increased optimism. The survey also asked executives to determine which factors represent the greatest challenges to their business in the upcoming year. Labor shortages/ increased labor costs (31%) continue to be a top issue. ( See Top Challenges for 2024 chart. ) Despite these challenges, business leaders are still prioritizing growth but doing so conservatively. They report being focused on existing products in current markets, with market penetration (40%) as their primary growth strategy.
DECODING EUROPE’S NEW CARGO CODE The European Union recently updated its Union Customs Code, which affects companies involved in transporting cargo to or through the EU. The changes are a direct result of the Import Control System (ICS2) rollout, which is the third release of the new pre-arrival and security system for the EU. The ICS2 mandates that all bill of lading issuers provide advance cargo information to address security and safety concerns associated with incoming shipments entering the EU. Shippers must comply by submitting a comprehensive set of Entry Summary Declaration data for goods crossing the EU border, regardless of whether they are inbound or outbound. What’s the impact? Here are the key points, according to Bryn Heimbeck, president of Trade Tech: • Failure to comply with these new regulations will result in cargo shipments being halted and delayed at EU customs borders, with customs authorities withholding clearance. • Insufficient declaration will either be rejected or subjected to intervention, potentially resulting in noncompliance penalties. “It is strongly advised that shippers prepare ahead in order to prevent disruptions to their shipments bound for or passing through the EU,” notes Heimbeck. • Shippers can help to ensure compliance by utilizing unified platform technology that aligns with the enhanced requirements of ICS2. This type of technology is designed to integrate new regulatory changes and is built on top of existing systems and processes. “By adopting a unified platform technology, shippers can bridge the regulatory gap when it comes to global security filings such as AMS, ISF, and the latest addition, ICS2,”says Heimbeck.
Rating Executive Optimism (on a scale of 1-10) 8
7.5
7.07
6.99
7
6.76
6.74
6.88
6.5
6.37
6
Feb
Jun
Oct
Mar 2023
Aug 2023
Feb
2022
2022
2022
2024
Top Challenges for 2024
2% Other
31% Labor shortages/cost of labor
3% Lack of inventory
8% Inflation 3% Disruptions in the supply chain
20% Decreasing customer demand
9% Increasing competition
11% Rising cost of materials
14% Gap in skilled labor
Source: Sikich Industry Pulse Report
June 2024 • Inbound Logistics 17
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