Hedge funds are scrambling to monitor supply-chain snags. Here are the 10 alternative datasets they're using to gain an investing edge.

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

With the manufacturing and delivery of goods facing logjams around the world — resulting in delays of everything from furniture to food — hedge funds and other so-called smart-money investors are desperate to get a handle on how this could affect their trades.

It’s resulting in growing demand for big-picture data on everything from computer chips to ocean freights, hedge fund managers and data providers tell Insider.

“They’re looking at geolocation data. You know, what is the average wait time at the ports, and how long are our containers sitting at the ports, how long are trucks sitting at the ports to load,” explained Craig Fuller, CEO of FreightWaves. FreightWaves is one of several data providers that tracks the movement of cargo 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 reaching out.

“It’s all about the supply chain right now and so we’re seeing an unprecedented amount of activity,” he said. 

With the holiday shopping season fast approaching, the supply-chain crunch is going to be a focus for everyone from politicians to executives to grandparents shopping for Christmas gifts. Already, President Joe Biden has promised that Los Angeles’ port will operate around-the-clock to break through the logjam. Companies have used the phrase “supply chain” thousands of times in earnings calls already this year.

“Supply chain is taking center stage on earnings calls as the supply chain is a disaster,” Scott Mushkin, an analyst at R5 Capital, told Bloomberg. “Honestly, there is a chance the system breaks down during the holidays.”

There are straightforward trades funds can make — like shorting a retailer reliant on computer chips because semiconductor production fell — as well as interconnected ones being tracked by sharp macro minds. Supply-chain data is critical for measuring the ripple effects of a vast global logistics network.

“It’s important for firms to have at least a general landscape of how companies are connected with respect to upstream and downstream relationships,” said Chris Petrescu, the founder of data consultancy CP Capital and a former data executive at ExodusPoint.

Insider talked to a half dozen industry experts to get a sense of what datasets are best at monitoring supply chains across the globe. Here are the 10 data vendors that top funds are relying on.

1. ClipperData

A container cargo ship in Rotterdam Harbour on April 4, 2021 in the Netherlands. Rotterdam is the largest shipping port outside of Asia.
Niels Wenstedt/BSR Agency/Getty Images

Billed as the top commodity data company, ClipperData tracks oil, chemicals, grains, and other commodities while they are at sea. Users can see where individual ships are, what they are carrying, and where and when they are set to dock.

2. FreightWaves

To match feature USA-ECONOMY/TRUCKERS
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 series of podcasts. The media platform has more than 50 journalists and analysts.

3. Camgian

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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 machinery being produced at different plants. The Mississippi-based company, which partners with the US Military on other data products, believes the index can help show construction activity levels at any given time.

4. Revere

Amazon Business has a new deal selling goods directly to the federal government, and the program is growing under Biden. Analysts said it further entrenches their power in government, meanwhile small sellers are worried.
Rolf Vennenbernd/picture alliance via Getty Images

Revere, which was purchased by data giant FactSet in 2013 for more than $13 million, tracks the relationships between companies, allowing users to see the overall network. On top of generating possible investment ideas, sources tell Insider that they use Revere’s data to make sure they aren’t betting too much on a single company or industry by tracking their supply-chain relationships.

5. Semiconductor Industry Association

President Joe Biden holds a semiconductor chip at the White House in Washington, U.S., February 24, 2021.
Jonathan Ernst/Reuters

Thanks to a partnership with World Semiconductor Trade Statistics, the Semiconductor Industry Association runs a database that gives monthly updates on the sales and production of global semiconductor companies around the world. Funds have zeroed in on datasets like these as everything from cars to microwaves now rely on computer chips.

6. Trendforce

CHARLY TRIBALLEAU/AFP via Getty Images

Trendforce’s library of research spans sectors from consumer electronics, to green energy usage, to semiconductor production, and more. Funds using the dataset have said the vendor has pricing data all the way down to the individual chip level.

7. Flexport

Amazon

An end-to-end supply-chain tracker, Flexport’s dashboard monitors goods from when they leave the warehouse on a truck to the plane heading overseas to the stores unloading them. For ESG investors, the data vendor also has a carbon tracker to show which companies are polluting the most when transporting goods, and which companies are paying carbon emissions fees to make up for it.

8. Ocean Freight Exchange

Chinese President Xi Jinping, Panamanian President Juan Carlos Varela and their wives in front of a Chinese container ship at the Panama Canal’s Cocoli locks, 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 how much weight they are carrying and what the cargo is worth. The firm also provides predictive analytics for funds with small data science teams that can’t quickly clean data.

9. Bazze

The breach of a major telecommunications company’s systems exposed communications between millions of people.
GABRIEL BOUYS/Getty Images

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

10. DecaData Corporation 

Labor shortages and shipping delays have contributed to a supply shortage for many grocery stores during summer 2021.
Tempura via Getty Images

With more than decade’s worth of data on grocery store inventories and sales, DecaData has been used to track the supply chain of goods like Campbell Soup by hedge funds and industry trackers. It’s also used as a preliminary look at inflation, as certain shortages of consumer goods can drive prices up and affect the Consumer Price Index.