COVID-19 was the most devastating setback the world has suffered in over a century. However, with each crisis comes a new dawn, a new hope, and a new opportunity that leads to a better and stronger future.
Corporate appetites to improve supply chains grew due to the pandemic in global trade. As buyers and suppliers have become aware that the current pandemic might not be the last significant disruption to international trade, they have sought to increase inventory buffers and strengthen supply networks to counteract future disruptions.
Supply chain interruptions are often experienced, as was illustrated earlier this year by the blockage of the Suez Canal by a container mega-ship. According to McKinsey & Company, businesses experience shocks that leave them inactive for a month every 3.7 years.
DP World’s Trade-in Transition report shows that 83 percent of businesses surveyed have made investments in reconfiguring their supply chains. Their decision to move to a different location aims to improve the production or purchasing outlook and shorten their supply chains.
In addition to increased visibility, digitalization also allows manufacturers to manage their purchasing. At the same time, suppliers can track real-time updates regarding their order backlogs for more accurate inventory management.
The demand for more seamless and end-to-end logistics services has increased dramatically to address the market’s volatility. In the absence of technology, it would be impossible for supply chain operators to bridge such gaps in trade flows.
Although digital solutions are not a panacea for trade, broader policies must strengthen them. This pandemic has also increased the need for government alignment. A rise in customs and border checks has compelled trade entities to intensify public-private collaboration to facilitate smoother cross-border trade while accelerating knowledge transfer and capacity building.
According to IMF projections, global economic growth is projected to be 6 percent in 2021 and 4.9 percent in 2022.
Accordingly, the global economic forecast for 2021 remains unchanged from the April 2021 forecast, but with offsetting revisions.
As countries across the globe emerge from the grip of a pandemic, the next two years are likely to offer new growth opportunities, especially in the global trade and industrial sector.
We at GL International are committed to helping you and your business make the most of these opportunities, ensuring that your organization is prepared to deal with these new challenges.