Afternoon Coffee: GEP-Economist survey estimates 2020 supply chain disruptions at $4T; fintech Airwallex raises $100M; New jobless claims hit lowest point since start of pandemic

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GEP, a suite provider for procurement and supply chain strategy, released its “Cost of Supply Chain Disruption” study of C-suite executives at European and US companies, conducted in part by The Economist Intelligence Unit (EIU). In a press release, the findings indicate that up to $4 trillion in revenue might have evaporated in supply chain disruptions from Covid and other factors over the last year.

The report found that although the Covid pandemic was a significant factor, it was only one of many disruptive forces that strained and broke supply chains. American companies were particularly hit hard amid a variety of problems related to a US-China trade dispute.

Some key findings of the study include:

  • A majority of companies (64%) with a revenue greater than $1 billion reported revenue losses between 6% and 20% in 2020.
  • Nearly half (45%) reported that Covid “significantly disrupted their supply chain."
  • 38% of companies with revenue greater than $1 billion reported “significant damage to a company’s brand reputation,” and one-third said their operational costs increased as a direct result of supply chain disruption.

"While COVID-19, understandably, gets all the press, it is far from the only force wreaking havoc with the world's global supply chains that costs most companies double-digit revenue loss and, perhaps more important, immeasurable reputational damage and customer loyalty," John Piatek, GEP's Vice President, Consulting, and Chairman of the firm's Thought Leadership Council, said in the press release. "Supply chains and procurement are a key driver of sustainable competitive advantage, but despite spending millions on ERP solutions, most global companies are ill-equipped to effectively manage complex global supply chains in face of uncertainty, global warming, tariffs and trade wars, and national governments increasing control of natural resources and strategic industries."

To view more findings of the study, visit the “The Business Costs of Supply Chain Disruption” page.

Fintech Airwallex receives $100 million in funding

Airwallex, an Australia-based global fintech payment platform, announced a new round of funding for $100 million, raising its valuation to $2.6 billion. In a press release announcing the funding, Airwallex said Greenoaks, a US-based investment firm, led this latest round of funding.

In two years, Airwallex has nearly tripled its valuation. The company said it will use this funding to accelerate global expansion, explore partnerships, and continue product and engineering innovation.

“The world will only become more digital, and with more businesses than ever now operating online, Airwallex has proudly been at the center of this evolution,” Jack Zhang, co-Founder and CEO of Airwallex, said in the press release. “The additional investment is a vote of confidence in the global financial infrastructure we have built, as we look to empower businesses to grow without borders.”

Jobless claims fall below 700,000 for first time since start of Covid pandemic

The Labor Department reported that jobless claims fell last week to 684,000, the fewest since the Covid pandemic erupted a year ago and an encouraging sign that the economy is improving, according to the Associated Press.

It counts the first time that weekly applications for jobless aid fell below 700,000 since mid-March of 2020. The number of people seeking benefits under a special program for self-employed and contract workers also dropped to 241,000. Altogether, the number of applicants for first-time jobless aid fell below 1 million for the first time since the pandemic, the article said.

A total of 18.9 million people are continuing to collect jobless benefits, up from the 18.2 million in the week prior. About one-third of those recipients are in extended federal aid programs, meaning they’ve been unemployed for at least six months, the article said. The unemployment rate sits at 6.2%.

“While the level of claims remains elevated, we expect they will continue to recede as the recovery gains momentum,” Nancy Vanden Houten, an economist at Oxford Economics, told the AP.

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