Tue. Feb 18th, 2025

Supply chain disruptions can have a significant impact on company performance, market trends, and stock prices. From natural disasters to global pandemics, these disruptions can lead to delays in production, shortages of goods, and increased costs. For investors, understanding the state of global supply chains is critical to making informed decisions about which stocks or sectors to invest in.

Traditional data sources, however, often lag behind real-world events, making it difficult to respond to disruptions quickly. This is where alternative data comes in. By providing real-time insights into supply chain activity, alternative data helps investors anticipate disruptions and adjust their strategies accordingly. In this blog, we’ll explore how alternative data is being used to analyse supply chain disruptions and its importance in modern investing.

What Is Alternative Data for Supply Chain Analysis?

Alternative data for supply chain analysis includes a variety of non-traditional data sources that provide insights into the movement of goods, production levels, and supply chain health. Common types of alternative data for supply chain analysis include:

  • Satellite imagery: Monitoring activity at factories, ports, and shipping hubs.
  • Geolocation data: Tracking the movement of goods through transportation networks.
  • Shipping and freight data: Monitoring the flow of goods through ports, freight rates, and container volumes.
  • Web scraping: Analysing product availability and pricing on e-commerce websites.
  • Transaction data: Tracking purchase orders and consumer demand.

By using this data, investors can gain a real-time understanding of how supply chain disruptions are affecting different industries and companies, enabling them to act quickly when disruptions occur.

Why Alternative Data Is Essential for Analysing Supply Chain Disruptions

Supply chain disruptions can have a ripple effect across industries, leading to production slowdowns, increased costs, and even stock shortages. Traditional data sources, such as quarterly earnings reports, often don’t capture these disruptions until long after they’ve occurred. Alternative data, however, provides real-time insights into supply chain activity, allowing investors to identify and respond to disruptions faster.

1. Real-Time Monitoring

Alternative data allows investors to monitor supply chain activity in real time, giving them early warnings about potential disruptions. Whether it’s a sudden drop in port activity or a spike in freight rates, alternative data provides up-to-the-minute information about supply chain conditions.

  • Example: Investors tracking satellite imagery of major ports can monitor the number of ships waiting to dock. If congestion increases, it may signal delays in goods reaching retailers, prompting investors to adjust their stock positions accordingly.

2. Predicting Company Performance

By analysing supply chain data, investors can gain insights into how disruptions will impact company performance. For instance, if a company relies on components from a region facing supply chain challenges, production delays may negatively affect its earnings.

  • Example: During the global semiconductor shortage, investors tracking shipping data noticed delays in the delivery of critical components to automakers. This information helped them predict that certain car manufacturers would face production slowdowns, leading to lower sales and stock price declines.

3. Gaining Sector-Specific Insights

Supply chain disruptions often affect some sectors more than others. For example, the retail and consumer goods sectors may be hit hard by delays in product shipments, while the tech sector could be impacted by shortages in raw materials. Alternative data helps investors track these sector-specific disruptions and make informed decisions about where to invest.

  • Example: Investors tracking shipping data during the COVID-19 pandemic noticed significant delays in the delivery of home electronics. This insight prompted them to shift their investments toward sectors less affected by these delays, such as digital services and software.

How Investors Use Alternative Data to Analyse Supply Chain Disruptions

Here’s how investors are leveraging alternative data to analyse supply chain disruptions and adjust their strategies:

1. Tracking Shipping Activity with Satellite Imagery

Satellite imagery allows investors to monitor activity at ports, factories, and distribution centres. By tracking the number of ships arriving at key ports or the activity levels at major factories, investors can assess whether supply chains are running smoothly or facing delays.

  • Example: During a global supply chain crisis, satellite imagery revealed significant port congestion in China, one of the world’s largest manufacturing hubs. Investors who monitored this data were able to predict delays in the delivery of consumer goods, allowing them to adjust their positions in affected stocks before the broader market reacted.

2. Monitoring Freight Rates and Container Volumes

Shipping and freight data provide insights into the flow of goods through transportation networks. Investors can track changes in freight rates or container volumes to identify supply chain disruptions. A sudden spike in freight costs or a drop in container shipments may signal that companies are facing supply chain challenges.

  • Example: When freight rates surged in 2021 due to a shortage of shipping containers, investors tracking shipping data predicted increased costs for companies reliant on global imports. This insight helped them avoid stocks in sectors like retail and consumer goods, which were most affected by these rising costs.

3. Using Web Scraping to Analyse Product Availability

Web scraping tools allow investors to monitor product availability and pricing on e-commerce websites. If certain products are frequently out of stock or prices are rising sharply, it may indicate that the company is facing supply chain disruptions.

  • Example: Investors who used web scraping to monitor product availability on major e-commerce platforms noticed that certain tech gadgets were consistently out of stock. This data signalled potential supply chain issues, leading investors to adjust their positions in companies dependent on those products.

4. Tracking Geolocation Data for Transportation Disruptions

Geolocation data tracks the movement of goods through transportation networks, offering insights into potential bottlenecks or delays. By monitoring the movement of goods from factories to distribution centres or retail stores, investors can detect supply chain disruptions early.

  • Example: During a period of transportation strikes, geolocation data revealed that shipments of raw materials were not reaching factories on time, leading to production slowdowns. Investors who tracked this data were able to anticipate disruptions in manufacturing and adjust their portfolios accordingly.

Real-World Examples of Alternative Data in Supply Chain Analysis

Example 1: The Semiconductor Shortage

During the global semiconductor shortage in 2020 and 2021, investors used satellite imagery and shipping data to track the movement of semiconductor shipments from factories to manufacturers. By analysing this data, investors were able to predict which tech and automotive companies would be most affected by the shortage, allowing them to adjust their stock positions in response to supply chain disruptions.

Example 2: Port Congestion During COVID-19

When global shipping was disrupted during the COVID-19 pandemic, investors who tracked satellite imagery of major ports were able to identify regions experiencing severe congestion. This data helped investors predict delays in the delivery of goods, prompting them to adjust their investments in companies reliant on international imports.

Example 3: Retail Stock Shortages

During the holiday shopping season, investors used web scraping tools to monitor the availability of popular consumer goods on e-commerce websites. When certain products consistently sold out or became unavailable, investors anticipated that retailers were facing supply chain challenges. This data helped them predict which retailers might miss their sales targets for the quarter.

Challenges of Using Alternative Data for Supply Chain Analysis

While alternative data provides valuable insights into supply chain disruptions, there are challenges to consider:

1. Data Complexity

Interpreting alternative data, such as satellite imagery or shipping data, requires specialised tools and expertise. Investors must ensure they have the resources to analyse this data effectively to avoid misinterpretations.

2. Data Accuracy and Timeliness

Not all alternative data is created equal. Some data sources may be incomplete or outdated, leading to inaccurate predictions. Investors need to ensure they’re using reliable and up-to-date data to make informed decisions.

3. Global Uncertainty

Supply chains are often influenced by unpredictable events, such as geopolitical tensions, natural disasters, or sudden changes in trade policy. Investors must be prepared to adjust their strategies in response to these external factors.

The Future of Alternative Data in Supply Chain Analysis

As global supply chains become more complex and interconnected, the importance of alternative data in analysing disruptions will continue to grow. With advancements in AI and machine learning, investors will be able to analyse vast amounts of alternative data more efficiently, providing deeper insights into supply chain health and potential risks.

Platforms like TrendEdge offer powerful tools for accessing and analysing alternative data, helping investors stay ahead of supply chain disruptions and make more informed decisions.

Alternative data has become an essential tool for analysing supply chain disruptions, offering real-time insights that help investors navigate global markets. From satellite imagery to web scraping, these data sources provide a clearer picture of supply chain health and enable investors to anticipate disruptions before they impact company performance or stock prices.

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