As per a latest survey of senior executives involved in their firms’ international trade decisions and transactions, commissioned by DP World and conducted by The Economist Intelligence Unit, 70 percent of businesses have predicted that trade will recover to pre-pandemic levels more quickly than recovery after the financial crisis of 2008, which took two years and two months. Nearly a third, though the recovery would be twice as fast, with trade returning to pre-pandemic levels within a year.
The data shows how the pandemic has brought a lasting change in the ways businesses operate. It shows that eighty-three percent of executives indicated that they are in the process of reconfiguring their supply chains by switching or adding new suppliers, using different logistics providers, and/or changing production or purchasing locations.
After the pandemic hit the world, disruptions and shutdown exposed the vulnerabilities of businesses like over-dependence on single geographies and a lack of transparency in the supply chain. The world witnessed shutdown of major economies, ban on international as travel, failing of all forecasts and complications in the logistics of essential commodities due to the imbalance in demand and supply caused by the pandemic.
However, the survey suggests that despite the trouble and disruptions caused, about 42 percent of respondents stated that their firm’s international revenues expanded in the first half of 2020 and Nineteen percent reported no change from the previous year.
These figures are encouraging at a time when only one of the world’s major economies, China, is registering economic growth.
“The impact of the COVID-19 pandemic has redefined how the world stays connected, and companies conduct business. Moments of crisis have historically served as a powerful impetus for innovation. The effects of the pandemic have accelerated the transformation of the supply chains and prompted rapid adaptation to ensure resiliency in international trade. The global business community has risen to the challenge, and taken strong and decisive action to make supply chains more robust and agile – the benefits of which will be reaped in future years.”~Sultan Ahmed Bin Sulayem, CEO and Chairman of DP World
In other findings of the study, it was revealed that:
- Only 8% of businesses believe that recovery to pre-pandemic levels will take more than five years and fewer than 2% believe trade will never recover
- On average, firms said they are reallocating a third of their revenue from the first half of 2020 to remodelling their supply chains. A fifth said they will spend more than 50% of H1 revenues
- 65% of respondents said the reconfiguration process would be complete within one year—no easy task, given the intricacies involved in changing supply chains, which are the products of years of investment, relationship-building; education and training among a host of other factors