Trade Resilience: Addressing Global Supply Chain Disruptions
How can the public, private and tertiary sectors collaborate to prepare for future disruptions and black swan events?
With the global economy recovering steadily from the headwinds created by the COVID-19 pandemic, numerous challenges need to be addressed to rejuvenate the global freight and logistics industry, including the requirement to manage the additional ‘black swans’. Though global value chains have adjusted post-pandemic, some industries have faced significant supply disruptions. Increasing global shocks highlight the need for more collective action and coordination to build resilience, mitigate risk and enable inclusive growth, especially amongst the world’s most vulnerable communities. There has also been an increased focus on embedding sustainability and inclusion into the global economies through a robust and diversified freight and logistics chain.
To help highlight and mitigate these challenges, Whiteshield presented the Global Freight Resilience Index 2022 at a closed-door panel session in Davos alongside the annual meeting of the World Economic Forum.
The private session brought together key global policymakers and representatives from international financial institutes and the private sector, who shared their perspectives on top future trends shaping logistics, resilience, and trade at a time when disruption and volatility have never been higher. The event was structured around presenting the third edition of the Global Freight Resilience Index results, followed by a panel of global leaders discussing the disruption underway across markets and potential future scenarios for the trade and logistics industries. This high-level panel included HE Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, Mike Bhaskaran, Chief Executive Officer, World Logistics Passport, and Patricia Francis, Former Executive Director of the International Trade Centre UN/WTO.
The GFRI index evaluates 130 countries based on more than 40 country-level indicators that, once aggregated, result in eight equally weighted categories creating the two sub-pillars of the index: Policy opportunity and Freight performance.
The panel discussion highlighted issues – including the state of global trade after two years of shocks to the system, building supply chain resilience through diversification, redundancy, regionalization, or a combination, new possible disruptions, and the resilience level of countries to sustain new freight and logistics shocks. Future leadership and innovation in logistics coming from established or emerging markets were also discussed.
The index highlights that Port-Brexit disruption has been lighter than expected as volatility was masked by the coronavirus response and shed light on Vietnamese logistics that demonstrated break-out growth with key policies firmly supporting the country’s push towards economic prosperity. Africa and Latin America are the two continents that account for most countries lagging in the policy pillar and require the most significant improvement.
To conquer the challenges, countries need to act quickly
Countries should swiftly strategize policy actions given their Freight Resilience Index score and balance between the pillars.
Economies with disproportional scores in Policy Opportunity and Freight performance need urgent action, while countries with balanced scores require more thoughtful solutions.
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