Why do freight forwarders believe disruptions will last five years?
Eight in 10 (78%) freight forwarders expect geopolitical tensions and inflation to last for five years, according to a survey.
The survey, by port operator and logistics firm DP World, also found 66% of freight forwarders believed it was “impossible to say” when economic disruptions will subside.
Speaking at the Global Freight Summit in Dubai, Mike Bhaskaran, group chief operating officer, digital technology at DP World, said: “The uncertainties of today’s world are making trade harder and it is increasing the disconnect at various points across the whole supply chain. The freight forwarding community must come together to act now to mitigate risk, so that we can build towards a more resilient future.”
He said “concrete actions” were needed to solve “the major challenges keeping the community awake at night”.
The survey, involving “dozens” of freight forwarders in October, found inflation was a main concern for 63%, while 56% cited geopolitical tensions as another major cause of concern.
One in 10 (10%) said they had changed the markets they do business in as a result of this uncertainty.
Eight in 10 (80%) said “rising and unpredictable freight rates” was the “biggest worry keeping them awake at night”, with 37% saying this had a crippling effect on their ability to deliver goods.
Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, said: “Global supply chains are significantly impacted by the pandemic, geopolitical tensions and the looming threat of the global climate change crisis.
“These challenges have demonstrated that many parts of the global supply chain infrastructure are fragile. These rising concerns make it imperative for logistics operators to come up with the tools and solutions that offer real-time visibility across the entire supply chain. This can allow trade routes to be fit for purpose, and thus facilitating a more seamless movement of trade around the globe.”
However, DP World found the pandemic had produced some benefits for the industry. A third of freight forwarders said it had ignited a “much-needed” overhaul of their business. Over half (54%) said it had increased pressure on management to operate more sustainably.
DP World said the supply chain industry appeared “cautiously optimistic”, with 75% of respondents saying they expected technology to be a significant factor in easing supply chain challenges.