Every week, Rinchem shares important articles and topics about chemical and gas logistics, industries we operate in, and the general global supply chain. In this week's review we discuss supply chain resilience, U.S. business activity, and a diesel export ban.
Keep reading to see this week's hot topics.
This week's stats
58.4- the S&P Global Flash U.S. Composite PMI Output Index for September The Herald
40- the estimated percentage of all U.S. agricultural imports by value come from Mexico and other Latin American countries Atlantic Council
Why supply-chain resilience means more than just extra inventory
In the article"Why Supply-Chain Resilience Means More Than Just Extra Inventory," Arizona State University supply chain expert Mikaella Polyviou explains that as disruptions from tariffs, geopolitical instability, extreme weather, and transportation bottlenecks become more common, companies must move beyond traditional lean supply chain strategies. Rather than simply stockpiling inventory or adding backup suppliers, organizations should identify their most significant vulnerabilities and invest in the capabilities that will help them respond effectively when disruptions occur. Polyviou notes that while resilience initiatives can increase costs and complexity, businesses can achieve a balance between efficiency and resilience by targeting investments where risk exposure is greatest. She emphasizes that strong supplier relationships, improved visibility, agility, adaptability, and continuous learning are critical components of a resilient supply chain that can withstand future disruptions while maintaining long-term financial stability.
US business activity at more than five-year high; inflation pressures building
In the Reuters article "US Business Activity Races to More Than Five-Year High as Demand Strains Supply Chains," U.S. business activity surged in September to its strongest level since July 2021, driven by robust growth in both the manufacturing and services sectors. The S&P Global survey found that strong customer demand fueled a sharp increase in new orders, supporting economic growth at an annualized rate of roughly 5%. However, booming demand has also intensified supply chain bottlenecks, increased order backlogs, and made it more difficult for companies to find qualified workers. Ongoing supply disruptions, attributed in part to the continuing U.S.-Israeli conflict with Iran, have lengthened supplier delivery times and pushed input costs higher. Economists warn that while the backlog of orders supports continued expansion in the months ahead, growing capacity constraints are giving businesses greater pricing power and adding to inflationary pressures across the economy.
A diesel export ban could disrupt US supply chains
In the article A Diesel Export Ban Could Disrupt US Supply Chains, analysts from the Atlantic Council argue that while a U.S. diesel export ban could temporarily lower fuel prices for some domestic consumers, it would likely create significant unintended consequences across global and U.S. supply chains. The authors explain that many countries in Latin America, particularly Mexico, rely heavily on U.S. diesel imports to power agriculture, trucking, and industrial operations. A sudden disruption in fuel availability could hamper crop production, food transportation, and manufacturing activity, ultimately increasing costs for U.S. consumers through higher grocery prices and supply chain disruptions. The report also highlights potential risks to technology and AI-related supply chains that depend on cross-border trade with Mexico. Rather than restricting exports, the authors contend that policymakers should focus on easing global diesel supply constraints and addressing the underlying market pressures driving fuel prices higher.
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