Shipping Industry Revamps Supply Chains Amid Geopolitical Risks and Fragmentation

Three quarters of businesses worldwide are revamping their supply chains by collaborating with more suppliers to manage risks in an increasingly fragmented global landscape. Research conducted by Economist Impact and DP World at the World Economic Forum sheds light on this strategic shift, a response to escalating geopolitical uncertainty accentuated by ‘America first’ policies of the new US administration.

The Trade in Transition study, based on a survey of over 3,500 supply chain executives globally, underscores the necessity for firms to swiftly adapt to rising protectionism and changing geopolitical dynamics. Nations considered non-aligned, like Vietnam, Mexico, India, the UAE, and Brazil, are emerging as critical trade hubs, helping mitigate trade risks and bridging gaps brought on by global conflicts.

Businesses are adjusting sourcing strategies, with around 40% increasing US-based sourcing and 32% adopting dual supply chains to counter geopolitical risks. Concepts like friendshoring, relocating supply chains to politically aligned countries, are also gaining traction, with 34% of businesses pursuing this approach. By diversifying suppliers, leveraging neutral hubs, and embracing technologies like AI, companies are better equipped to navigate the economic and geopolitical complexities of the current era.

Global trade dynamics demand agility, resilience, and innovation. DP World Group Chairman and CEO, Sultan Ahmed bin Sulayem, emphasizes the importance of empowering businesses with infrastructure, expertise, and technology to thrive amidst fragmented markets. Economist Impact’s insights provide a roadmap for fostering dialogue, innovation, and resilience within the global supply chain ecosystem, enabling businesses to adapt and excel in this dynamic world of trade.

Source