The Suez Canal Accident’s Impact on Global Supply Chains
Critical Chanel Could Be Blocked for Weeks
Earlier this week, a container ship weighing over 200,000 tons became lodged in the Suez Canal, blocking traffic through the critical channel. A team is working to remove the ship using tugboats, helicopters, and other equipment, but authorities have warned that the canal could be blocked for days or even weeks.
The Suez Canal connects European and Asian markets. It is an important part of the supply chain for oil products refined in Europe and crude oil from North African and Black Sea ports. It is also a crucial part of supply chains for products ranging from electronics to machinery. In 2020, almost 19,000 ships passed through the channel—an average of about 50 ships per day. The accident is beginning to have ripple effects on supply chains across a number of industries.
Oil Prices and Shipping Rates Could Rise
Oil prices were down earlier this week because of worries about new COVID-19 lockdowns, but news of the Suez Canal blockage caused the price of oil to spike. Almost 10% of global oil and 8% of liquified natural gas is routed through the canal. Some analysts expect that oil prices could continue to climb if the canal remains blocked for a significant period.
Shipping rates around the world have been soaring over the past few months. Demand for shipping tumbled in the early months of the pandemic, but came roaring back as people purchased goods online during lockdowns. The industry has been grappling with a container shortage and logistical difficulties in ports this year. The Suez Canal being blocked puts further strain on the global shipping industry and analysts believe shipping rates could be pushed even higher.
The Chip Shortage Could Be Exacerbated
A number of industries are currently being strained by the global chip shortage. The problem has been exacerbated by a recent fire at a Japanese chip manufacturing plant, the winter storm in Texas, and backlogs at ports in California. The blocked waterway could further contribute to the chip shortage.
Ships which normally go through the Suez Canal can be rerouted around the Cape of Good Hope, but this is a more costly and time consuming route. Investors across a wide swath of industries will be eagerly watching as efforts to dislodge the ship continue.
The Benefits of Automating Your Finances
Automating finances can not only be a smart money move, it could also help alleviate some of the stress surrounding payment deadlines. Some benefits of finance automation include helping avoid late fees and sticking to your monthly budget.
One way to automate personal finances is to set up a direct deposit into a checking, savings, or cash management account, like SoFi Money®. For a limited time, get $100 when you switch your direct deposit to SoFi Money.** Log in to the SoFi app to get started.
Kroger Hopes Vaccine Distribution Efforts Will Grow Its Healthcare Arm
Kroger Plans to Administer Millions of COVID-19 Vaccines
Grocery store chain Kroger (KR) has administered over 1.3 million COVID-19 vaccine doses and it plans to deliver millions more over the spring and summer. Kroger is the fourth-largest pharmacy operator in the US by script count. It operates 2,250 pharmacies and 220 clinics, mostly concentrated in the Midwest and the South.
In addition to helping with vaccine rollout, the grocer has also administered hundreds of thousands of COVID-19 tests, offered virtual healthcare services, and delivered prescriptions free of charge over the past year. The grocer hopes these efforts will help it expand its healthcare business even after the pandemic subsides.
Planning for Post-Pandemic Consumer Habits
If you’re looking to lower your costs as much as possible you may opt for a robo advisor, which is an electronic money manager where the fees are often .50% or less, and in some rare cases free of charge. Whatever option you choose, be sure you understand what you are being charged and don’t be afraid to ask them to calculate those fees into real dollar amounts. Remember, 2% may not seem like a big deal, but $9100 certainly does!
Competing With Other Pharmacies
Kroger’s pharmacy faces significant competition from other grocery chains offering pharmacy services and from companies focused on pharmacy operations. For example, CVS (CVS) and Walgreens (WBA) can sometimes offer lower prices on prescription drugs because of partnerships with insurance providers.
Walmart (WMT), the largest grocer in the country, is investing in its healthcare arm and adding in-store clinics at many of its locations. As consumer habits change, there are many unanswered questions for the grocery industry and the healthcare industry. Kroger is working to position itself for success in a changing market.
Indian Fantasy Sports Company Raises $400 Million
Dream Sports has raised $400 million in a recent financing round led by TCV, D1 Capital Partners, and Falcon Edge. Mumbai-based Dream Sports is the parent company of Dream11, a fantasy sports app offering fantasy cricket, football, kabaddi, and basketball in India. The app currently has over 100 million users.
Fantasy sports are rapidly gaining popularity in India, but they have faced regulatory issues. A number of Indian states including Assam, Odisha, Sikkim, and Telangana have banned fantasy sports betting. But investors seem to believe that Dream Sports will be able to navigate these challenges and continue to grow.
Remote Notary Service Raises $130 Million
Notarize, a service helping businesses notarize documents remotely, raised $130 million in a Series D funding round led by Canapi Ventures. The company has seen 600% year over year revenue growth and has tripled its value since March of 2020.
Notarize has helped small businesses through the pandemic and has also partnered with big names like Zillow (ZG) and Adobe (ADBE). With its new funding Notarize plans to expand its platform, hire a larger team, and find ways to continue growing even as companies begin returning to in-person work.
The World Bank Will Sell Wildlife Protection Bonds
The World Bank will begin selling a bond designed to raise funds to protect the endangered black rhinoceros in South Africa. The five-year, $45 million bond will be the first wildlife conservation bond in the world. The bond will be available for purchase starting in the middle of this year.
Investor returns will depend on population growth of rhinos living in two South African reserves. If this program is successful, other bonds linked to the populations of lions, tigers, gorillas, and other animals could become available.