Modern Changes to the Way We Work

The rise of modern technology has created a shift in the expectations of workplaces. Gone are the days of grueling office commutes and bland water cooler talk. As communication has increasingly begun to take place over video conferencing and email, there has been a low need for employees to consistently come into the office. These new developments have given rise to the work from home trend, where employees are offered either a hybrid or completely remote work option. 

Employees are very satisfied when they are given the opportunity to work remotely- 91% of people report higher levels of happiness when given this option. These employees often cite the benefits of being able to maintain a much better work-life balance when working from home. 66% of employees explain that they are able to spend more time with family, 61% report that they have improved savings, and 62% report that they have an overall increased morale. It is clear that employees’ lives are greatly improved by remote work, so jobs and workplaces must adapt their work environment to the changing desires of their employees.  

There are many other ways that workplaces of the future are expected to change. Smaller corporations are likely to flourish without the cost of bigger businesses. There will likely be more of an emphasis on collaboration between team members, where everyone is expected to be a leader rather than falling into place within the hierarchy. This will lead to smarter brainstorming, where there is greater diversity of thought and less overall groupthink in order to create the optimal strategies for a company. 

As technology continues to play a greater role in the business world, there will be a greater increase of digital assistants. Workers will be able to focus in on their more complex tasks while assigning the routine administrative work for smart assistants, similar to Siri and Alexa. Coworker relationships will shift as well, as informal get-togethers increasingly take place online. There will no longer be a need to consistently show up to an office when an employee can access all of their work through a laptop. 

Artificial intelligence and new technologies will become more ingrained within the workplace, but the human touch will be more important than ever. Many of the most in-demand skills for the job of the future revolved around “soft skills”, such as people management, negotiation, and emotional intelligence. Workers will still be expected to interact frequently and verbally communicate with each other. Future technology will primarily be implemented in the more routine and less emotionally complicated work. 

Some of the fastest growing occupations include home health aids, restaurant cooks, software developers, and fast food workers. The highest paid career is software developers, which is unsurprising given the increased importance of technology. However, there is no standalone sector of the economy that is expected to grow at the detriment of all other jobs. It is certain that there will be more integration with technology, but humans are impossible to completely replace in the workforce.

Airlines Struggle as Weather Worsens

Many regions in the United States are suffering from subzero temperatures and blizzards. The heavy snowfall has led many airlines to cancel some of their flights.

The extreme weather condition has also hampered mailing services. Experts warn that some regions must be more cautious as it could be deadly. Airline carriers have postponed over 2,800 flights ahead of the Christmas weekend.

According to reports, Denver International Airport, Chicago Midway, and Chicago O’Hare International Airport have had the highest number of flight cancellations. Airlines explained that the icy winds, snow, and low temperatures could affect travel across states.

“It’s all hands on deck to ensure our customers are cared for during the holiday travel season, including when severe weather hits. Critical to our preparations was sizing the airline for the resources we have available and operating conditions we face, as well as being able to react quickly to get our customers on their way once the weather clears,” said American in a press release.

Several airlines have already issued weather waivers for a significant portion of their flights across the country. Ironically, airlines have been expecting a bounce back from their losses over the holidays. Before the cold temperatures came in, three of the country’s largest airlines projected millions of revenue due to the increased demand for holiday flights. However, this condition could affect the projections of several airlines.

“We are seeing a lot of strength for the holidays or approaching the Thanksgiving time period, and our bookings are incredibly strong. However, the bookings are a little bit different this year, and they’re more spread out across multiple days than they were on any single day,” said United Airlines chief commercial officer Andrew Nocella months ago.

“We see airfare to those top destinations, the ones with the highest demand at the holidays, are much higher than they typically are at this time of year. And they’re only going to increase from here,” Hopper lead economist Hayley Berg explained.

“We’re going to have fewer flights available and more travelers looking to go home or go on vacation for the holidays. That means that you might be paying a much higher price and unable to get a seat on the specific flight you want to take,” Berg said.

“Most travelers will want to fly a few days before the holiday and return a few days after. That means prices are those dates are going to be extremely high, capacity is going to sell out, and airports are going to be chaotic,” she added.

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Calling it a bomb cyclone

Many people have come to call this phenomenon the bomb cyclone. Over the past few days, Google searches for bomb cyclones have piqued. The weather anomaly happens when the atmospheric pressure drops instantly, rapidly intensifying into a storm.

“Bombogenesis, a popular term used by meteorologists, occurs when a midlatitude cyclone rapidly intensifies, dropping at least 24 millibars over 24 hours. A millibar measures atmospheric pressure. This can happen when a cold air mass collides with a warm air mass, such as air over warm ocean waters. The formation of this rapidly strengthening weather system is a process called bombogenesis, which creates what is known as a bomb cyclone,” writes the National Ocean Service.

In just minutes, this could occur. And according to experts, this happens in several areas in the US, like the northern Plains, upper Midwest, and northern Rockies. Moreover, at least 24 states are bracing for the impending threat, which can cause flash-freeze on roads and coastal flooding.

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Airlines advise passengers

Airline experts have laid out some practical strategies that people could employ to counter the unprecedented cancelation and delay of flights during the holiday season. First, according to experts, passengers must check if airlines offer to rebook without penalty to save some dollars in the face of canceled and delayed schedules. Moreover, if unsure, travelers are encouraged to contact the DOT’s hotline to ask for the proper and legal ways to deal with flight cancelations.

“Scheduling the first flight of the day is a great way to avoid flight delays. Studies show that the first flights of the day are more likely to leave on time and arrive on time,” says CEO Jeff Klee.

“If an airline cancels a passenger’s flight or makes a significant change in the flight, regardless of the reason, airlines are required to provide a prompt refund to a ticketed passenger, including those with non-refundable tickets, should the passenger choose not to accept the alternative offered, such as rebooking on another flight. Learn more about your right to a refund,” says the DOT.

“The number one thing, and I cannot stress this enough, is that you must get to the airport early and well before your flight time. “If you are traveling with a lot of luggage or packages to check in, for example, arriving two hours early may not cut it,” adds Unifi Aviation CEO Gautam Thakkar

“The best way to ensure all luggage arrives safely to a traveler’s destination is to not check a bag. Packing light and carrying on is a great way to save money and have peace of mind that your luggage will make it to your destination with you,” added Klee.


Maersk Reports Loss in Second Quarter, Not a Good Sign for Global Trade says Experts

According to AP Moller-Maersk, which on Wednesday reported a sizable loss in their demand, the global economic slump has also had a detrimental impact on the market for shipping containers. The erosion of customer confidence and the disruption of the supply chain only serve to worsen this condition.

The Danish shipping and logistics business, which is regarded as a barometer for world trade, examined its second quarter data from last year and discovered that this year there had been a 7.4% decrease in the number of loaded container ships. The discovery caused the Maersk management to alter their predictions for this year’s performance in the container business area.

“Geopolitical uncertainty and higher inflation via higher energy prices continued to weigh on consumer sentiment and growth expectations,” stated the company.

“Given this background, in 2022, global container demand is now expected to be at the lower end of the -1% to +1% forecasted range,” Maersk added.

The range expectation of Maersk is heavily influenced by rising inflation and disruptions in the energy supply.

Issued by CEO Soren Skou, Maersk’s company statement reads:

“The result was driven by strong contract rates in Ocean, rapid, profitable growth in Logistics and continued solid performance in Terminals. Volumes in Ocean were softer as congestion continued, and the war in Ukraine weighed on consumer confidence, particularly in Europe. However, in Logistics, we grew volumes above the market as our Ocean customers continue to buy into our value proposition, resulting in organic revenue growth of 36pct., notching up the 6th quarter in a row of more than 30pct. organic growth.”

Shipping restrictions are the main catalyst of the decline

It is now clear how the Covid-19 lockdown and the conflict between Russia and Ukraine have affected the sector. Maersk claims that there has been a noticeable slowdown in container shipments to Europe, as port inventories have grown principally as a result of blockades and shipping restrictions.

“In Europe, supply chain congestion remained as retailers and manufacturers kept containers in ports and warehouses due to weak final demand. Port lockdowns in China due to the Covid-19 zero-tolerance policy as well as consequences from the war in Ukraine also caused strains in key areas of the logistics network,” explained the company in its statement.

According to Maersk, its second-quarter freight department performance exceeded expectations. Since trade congestion has reduced freight prices globally, the freight industry is doing well. As a result of “exceptional market conditions,” according to Maersk, the logistics department of their company saw an increase in profit.

“Continued congestion and dislocation of supply and demand fundamentals in the logistics industry increases the uncertainty surrounding the outlook for freight rates,” Maersk said.

The second quarter of the company

In recent data, Maersk’s profit increased by 52% year on year, reaching $21.7 billion, while operating profits more than doubled to $8.9 billion.

For the container transport business, higher freight rates entail significant financial gains. For businesses to compensate for market disruptions and to transport their goods to their intended locations in the current market conditions, they must now have access to shipping services.

A shipping company, Hapag-Lloyd AG, increased its prediction for average freight rates to 80% for the first half of the year.

Despite recent decreases, Maersk claims that freight prices remain elevated compared to the national average and are hovering at all-time highs. The business warned that prices would change if new factors emerged.

“We delivered an exceptionally strong result for the second quarter and consequently recorded the 15th quarter in a row with year-on-year earnings improvements. We are pleased with our performance across the business in the first half of 2022, which clearly demonstrates the progress and great work by the entire Maersk team, transforming the company towards becoming a global, integrated logistics company,” said the CEO of AP Moller Maersk.

Source: CNBC

A Better 2023 for Chinese Firms

Many businesses have had a challenging year in 2022. Chinese tech businesses have suffered massive losses in China, as Xi Jinping has tightly enforced Covid laws.

Several digital behemoths, including Tencent and Alibaba, have reported billion-dollar losses. In addition, since the epidemic, corporations have had their weakest growth rates in some years, with new Covid instances in the country causing executives to be concerned. However, investor concern has been minimal in the face of Chinese rules on Covid. However, with the Chinese government indicating that it would reopen the economy, next year should be a year of recovery for technology businesses.

“We are positive on the 2023 internet sector outlook in light of reopening story and improving consumer sentiment,” said an analyst.

Fortunately, the Chinese government’s attitude against the comeback of Covid throughout the country, notably on the Omicron, has shifted. According to Chinese Vice Premier Sun Chunlan, the latest Omicron varieties are less harmful than their predecessors. Furthermore, following massive protests that heightened tensions between residents and authorities, the Chinese government has reduced Covid laws.

“We believe Sun’s speech, in addition to the notable easing of Covid control measures in Guangzhou yesterday, sends yet another strong signal that the zero-Covid policy will end within the next few months,” said Ting Lu, a chief economist from Nomura.

“However, restrictions and lockdowns may not be truly moderate before March 2023 due to a likely surge in Covid case numbers and disruption. As the current narrative that Omicron is still very deadly has yet to be changed for a majority of Chinese people, especially those in less developed regions,” she added in a report.

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Covid businesses afflicted Chinese enterprises

The Chinese government has been tenacious in its pursuit of Covid. Xi established the zero-Covid policy, which included rigid controls and lockdowns throughout the country’s economic centers. Businesses and individuals have unavoidably suffered as a result of this. As the government compelled individuals to stay at home, company productivity plummeted, with Alibaba and other technology businesses claiming significant revenue losses.

“Retail sales decreased year-over-year in April and May due to the resurgence of Covid-19 in Shanghai and other major cities, and has slowly recovered in June,” said Alibaba CEO Daniel Zhang.

“What I find interesting is how the narrative on the big tech companies has changed. Early on in the pandemic, COVID was expected to benefit the big online platforms at the expense of ‘offline’ businesses. As much of the economy would be stuck at home with little other choice than to shop and entertain themselves online,” GFM Management wealth manager Tariq Dennison explained.

“The recent revenue and earnings dip hitting these big tech names reflects zero COVID concerns short-term. But also has many long-term investors, including myself, revising our estimates of the long-term growth prospects of these names,” he added.

“If this quarter is a sign of a permanent slowdown to single-digit growth rates, rather than just a temporary dip, that, of course, would have a significant impact on long-term valuations of these shares.”

The challenge for companies

Despite their optimism, analysts believe that Covid will remain the most significant obstacle for Chinese firms in the coming year. Nonetheless, as 2022 approaches, the prognosis should improve due to China’s reforms in dealing with the Covid epidemic. But it remains to be seen. However, Xin Sun, a senior lecturer at King’s College London, believes that if China abandons its zero-Covid policy, businesses will do better the following year.

“I will argue the prospect of a tech rebound next year depends primarily on the extent to which macroeconomy and especially consumption could recover,” Sun said.

“Given the current extremely suppressed level of consumption, largely due to COVID restrictions and also the lack of confidence among consumers, a tech rebound is indeed likely if China could smoothly exit from zero-COVID and reopen the economy.”

The good news is that analysts anticipate an increase in sales among technology businesses next year. While growth rates may not be able to approach those seen before the epidemic, it will be a good start for Chinese enterprises looking to improve their situation. According to experts, businesses should now embrace internet shopping since it is gaining popularity among a large population who is afraid to leave their homes.

“Beijing’s top priority this year is economic growth. The crackdown-style governance is over because Beijing has recognized that it’s a bad idea to spook markets and undermine business confidence,” said Trivium China Linghao Bao.

“We’ve already seen some recent attempts to relax Covid measures and rescue the property markets. That said, regulations will be here to stay. That means the focus has shifted toward a more measured, predictable approach to regulating big tech,” he added.

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Strategies need to change

Companies must adjust their business strategies to boost profitability next year, given the apparent shift in market preferences and patterns.

“The crackdowns have fundamentally changed the business logic these firms need to follow. In the past, Chinese tech giants strived to build the so-called ‘ecosystem,’ which, by aggressively acquiring and integrating different lines of business, increased customer stickiness and engagement,” explained Sun.

“Now they have to scale back to focus on their main business lines and seek revenue growth from optimized operation and innovation.”