Global Supply Chains Are Strained but Holding Strong

Based on a report from CNN, despite ongoing challenges, global supply chains are managing to stay resilient. Key shipping routes like the Suez and Panama Canals are facing disruptions due to attacks and droughts, while other issues like port closures and labor disputes add to the strain. However, experts say the situation is better than it was a few years ago, during the global pandemic.

Supply chains are more robust now due to lessons learned from past disruptions. Companies have adapted by using longer routes, ordering earlier, and storing more inventory. This proactive approach helps prevent major breakdowns.

Retailers are preparing for the holiday season by increasing inventory to avoid shortages. Despite high container prices and ongoing inflation, experts believe that the worst disruptions are behind us. While some costs are higher, companies are struggling to pass these costs onto consumers.

While challenges remain, the global supply chain has improved and is better equipped to handle ongoing stresses.

The Impact: Shipping companies have become better at handling disruptions and communicating with customers. This means that transferees can expect more accurate updates and better support during the shipping process. However, despite better management at handling disruptions, shipping costs have increased due to longer routes and higher container prices and are likely to remain elevated in the short term.

Overall, shipping of household goods has seen some improvements and the advancements in supply chain management should help ensure a more predictable and smoother moving process moving forward.

How Rising Insurance Rates Are Affecting Homeownership Throughout the United States

As climate change leads to more unpredictable weather and natural disasters, homeowners are facing higher insurance premiums and fewer options. According to a recent report, home insurance prices have surged by 35% over the past two years, with some states seeing even larger increases. For instance, insurance premiums have jumped by 68% in Florida and 47% in New Mexico and several other states.

The main reason for these increases is that insurers are losing money on home insurance policies. They have been paying out more in claims than they collect in premiums, which has led many insurers to raise rates, cut coverage, or leave certain markets. For example, State Farm and Allstate have stopped accepting new applications in California due to these financial pressures.

This situation makes it harder for people to buy and maintain homes. Many homeowners who have never filed a claim are finding their insurance canceled, forcing them to find coverage through high-risk pools or state-backed programs. In Florida, the state-backed insurance pool has become the largest insurer due to high demand, and in California, the FAIR Plan has seen a dramatic increase in policies.

The Impact: For those relocating or dealing with these changes, mobility professionals can help by advising on how to manage insurance costs. Some strategies include increasing deductibles, bundling insurance policies, improving home security, maintaining good credit, shopping around for better rates, and asking about available discounts.

Rising insurance premiums could affect insurance availability, meaning, in high-risk areas, such as those prone to wildfires or flooding, insurance may become harder to obtain. This can complicate relocation efforts, as finding suitable insurance coverage becomes a challenge for relocating employees.

Michigan Real Estate Brokers Sue NAR for Antitrust Violations

Michigan real estate brokers are suing the National Association of Realtors (NAR) for violating antitrust laws, which are designed to help promote competition but prevent monopolies in the marketplace.

The lawsuit, filed on August 12, 2024, claims that forcing all Realtors and brokers in Michigan to join NAR and other local associations is unfair and illegal. The plaintiffs, including brokers from Signature Sotheby’s International Realty, argue that this requirement limits competition and hurts their business.

The lawsuit also criticizes a recent settlement agreement by NAR, which stopped MLS from offering buyer broker compensation. The plaintiffs believe this promotes deceptive practices and discrimination against sellers.

The Impact: While this lawsuit is still being negotiated, it will affect how real estate brokers and agents operate in Michigan. If the court rules in favor of the plaintiffs, then brokers and agents might no longer need to join realtor associations to access the Multiple Listing Service (MLS). If brokers no longer need to join multiple associations to access the MLS, transferees might find it easier to switch brokers or agencies without being restricted by membership requirements. Additionally, If the lawsuit leads to changes in how commissions are handled, transferees will benefit from more transparent and fair practices. The lawsuit currently demands damages, changes to the current system, and a jury trial.

Monthly Buyer Broker Litigation Update

The National Association of Realtors (NAR) settlement is changing how agents work with renters. Going forward, agents who use the MLS to find rental options will require tenants to sign a showing form, detailing any fees.  Several Rental Assistance services, such as PorchLight, cover the agent’s tour fee, so renters typically won’t face extra costs, except in areas with broker fees like New Jersey, New York, or Boston, Mass. If a rental property pays a commission to the agent, tenants will need to sign an updated agreement allowing the agent to receive this commission.

Impact: Employers should adjust their relocation policies to ensure renters are properly represented. For example, when relocation benefits include a rental tour, the employer will cover the agent’s fee, meaning renters won’t have to pay extra unless they are in specific areas with broker fees. Employers need to cover agent fees in their policies, inform renters about the process, and handle any additional costs if applicable. By paying a nominal fee, employers can guarantee proper representation for their renters, offering valuable local insights and protecting them from unfavorable leasing terms.

Global Mobility Radar

CapRelo’s Mobility Radar provides valuable insights into trends worth monitoring. This month, we have detected important global mobility updates in South Africa, Canada and the United States.

• A containership, the MSC Antonia, recently lost about 46 containers overboard due to severe weather off South Africa. This is the third such incident this winter. The ship was traveling from Colombo to New York City when it encountered rough conditions near Port Saint Johns. Along with the lost containers, around 305 containers were damaged and are now docked for repair in Cape Town.
• The Canadian government ended a rail shutdown on Thursday, August 22 involving Canada’s two main freight railroads, Canadian National and Canadian Pacific Kansas City Southern due to the first ever labor dispute. The Canadian Industrial Relations Board (CIRB) acted and ordered everyone back to work. The shutdown had the potential to disrupt industries like agriculture, automobiles, and energy, and even affect water treatment plants.
• According to the New York Times Breaking News, U.S. inflation slowed to 2.5 percent for the year ending in August, setting the stage for a potential rate cut by the Federal Reserve next week. The report, released on Wednesday, September 11 provides the latest indication that inflation is stabilizing after sharp increases in 2021 and 2022.