How hedge funds track supply chains, logistics, to make bets


  • The pandemic has slowed down the global supply chain for goods, from food to furniture.
  • Hedge funds are monitoring the situation closely as the busy holiday shopping season approaches.
  • Insider focused on 10 of the most mentioned datasets for supply chain success inventory tracking.

With the manufacturing and delivery of goods facing traffic jams around the world – resulting in delays of everything from furniture to food – hedge funds and other so-called smart investors are desperate to figure out how this could affect their transactions.

This is translating into a growing demand for aggregate data on everything from computer chips to ocean freight, hedge fund managers and data providers told Insider.

“They look at the geolocation data. You know, what is the average waiting time in ports and how long do our containers stay in ports, how long do trucks stay in ports to load, ”explained Craig Fuller, CEO of FreightWaves . FreightWaves is one of the many data providers that track the movement of goods from factory to store.

Before the pandemic, Fuller said less than a dozen hedge funds were clients; now it’s “a much larger multiple of that”, with two or three funds a day.

“Everything revolves around the supply chain right now and so we are seeing unprecedented activity,” he said.

With the holiday shopping season quickly approaching, the crisis in the supply chain is going to be the center of attention for everyone from politicians and executives to grandparents shopping for Christmas presents. Already, President Joe Biden has promised that the Port of Los Angeles will operate around the clock to break the deadlock. Companies have already used the term “supply chain” thousands of times in earnings calls this year.

“The supply chain is central to the earnings calls because the supply chain is a disaster,” said Scott Mushkin, analyst at R5 Capital. Bloomberg. “Honestly, there is a chance the system will go down during the holidays.”

There are simple transactions funds can make – like bypassing a retailer dependent on computer chips due to the drop in semiconductor production – as well as interconnected transactions followed by savvy macro minds. Supply chain data is essential for measuring the spillover effects of a large global logistics network.

“It’s important that companies have at least a general overview of how businesses are connected with regards to upstream and downstream relationships,” said Chris Petrescu, founder of data consultancy CP Capital and former data manager at ExodusPoint.

Insider spoke to half a dozen industry experts to get a feel for the best-suited datasets for monitoring supply chains around the world. Here are the 10 data providers that the major funds rely on.

1. ClipperData

shipping containers

A container ship in the port of Rotterdam on April 4, 2021 in the Netherlands. Rotterdam is the largest seaport outside of Asia.

Niels Wenstedt / BSR Agency / Getty Images


Hailed as the premier raw material data company, ClipperData tracks oil, chemicals, grains and other raw materials while at sea. Users can see where individual vessels are located, which they transport, and where and when they must dock.

2. FreightWaves

Freight trucks travel the Fisher Freeway in Detroit, Michigan, March 27, 2009. REUTERS / Rebecca Cook

To match USA-ECONOMY / TRUCKERS functionality

Thomson reuters


FreighWaves tracks the global freight market for supply chain organizations. Its flagship platform, SONAR, provides data on the global logistics industry and is updated daily. The company also has its own media platform, including a website, TV streaming offering, and a podcast series. The media platform has more than 50 journalists and analysts.

3. Camgian

John deere

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AP Photo / Ted S. Warren, file


Camgian tracks construction and manufacturing through its Heavy Equipment Index, which is updated weekly to show the amount of heavy equipment produced at different factories. The Mississippi-based company, which is partnering with the U.S. Army on other data products, believes the index can help show levels of construction activity at any given time.

4. Worship

Amazon logistics center

Amazon Business has a new agreement selling goods directly to the federal government, and the program is growing under Biden. Analysts said it further strengthens their power in government, while small salespeople are worried.

Alliance Rolf Vennenbernd / photo via Getty Images


Revere, which was bought by data giant FactSet in 2013 for more than $ 13 million, tracks relationships between companies, allowing users to see the entire network. In addition to generating possible investment ideas, sources tell Insider that they use data from Revere to make sure they’re not betting too much on a single company or industry by tracking their relationships with the chain. supply.

5. Semiconductor Industry Association

biden computer chip

President Joe Biden holds a semiconductor chip at the White House in Washington, United States, February 24, 2021.

Jonathan Ernst / Reuters


Through a partnership with World Semiconductor Trade Statistics, the Semiconductor Industry Association maintains a database that provides monthly sales and production updates for global semiconductor companies around the world. Funds have focused on datasets like these because everything from cars to microwaves now relies on computer chips.

6. Trendforce

Playstation 5


CHARLY TRIBALLEAU / AFP via Getty Images


Trendforce’s research library covers industries ranging from consumer electronics, green energy use, semiconductor production, and more. Funds using the data set said the provider has pricing data down to the individual chip level.

7. Flexport

Amazon workers load cargo onto Amazon Air plane at new freight hub


Amazon


End-to-end supply chain tracking, Flexport’s dashboard monitors goods from their departure from the warehouse on a truck to the plane on their way to the stores that unload them. For ESG investors, the data provider also has a carbon tracker to show which companies pollute the most when transporting goods and which companies pay carbon emissions fees to offset this.

8. Sea freight exchange

Chinese President Xi Jinping at the Panama Canal

Chinese President Xi Jinping, Panamanian President Juan Carlos Varela and their wives in front of a Chinese container ship at the Cocoli Locks of the Panama Canal, December 3, 2018.

LUIS ACOSTA / AFP via Getty Images


Using a combination of sensors, natural language processing software, and satellites, Ocean Freight Exchange has data on tens of thousands of ships, including the weight they carry and the value of the cargo. . The company also provides predictive analytics for funds with small data science teams that cannot clean data quickly.

9. Bazzé

a woman is using a cell phone / cell phone

Breaching the systems of a large telecommunications company exposed communications between millions of people.

GABRIEL BOUYS / Getty Images


An aggregator of geolocation data, Bazze can help funds track the supply chain with information on South America, Asia and Africa. The company can detect “abnormal activity” at manufacturing facilities, based on cell phone geolocation data, within two days of a manufacturing slowdown. The use cases have included everything from measuring the industrial impact of a typhoon in Taiwan to political unrest in Ecuador.

10. DecaData Corporation

A grocery store worker bends down to pick up food from the shelves.

Labor shortages and shipping delays contributed to a supply shortage for many grocery stores in the summer of 2021.

Tempura via Getty Images


With over a decade of grocery store inventory and sales data, DecaData has been used to track the supply chain of products like Campbell Soup by hedge funds and industry trackers. It is also used as a preliminary snapshot of inflation, as some shortages of consumer goods can drive up prices and affect the consumer price index.