With the global economy recovering steadily from the headwinds created by COVID-19 pandemic, there are numerous challenges that 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 large 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 – a global strategy, and public policy advisory firm – presented the Global Freight Resilience Index 2022 and organised various sessions, including a closed-door panel discussion during an event on May 25, 2022, at the Swiss mountain village of Davos alongside the annual meeting of the World Economic Forum.
HE Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade said, “Like most industries, freight and logistics is currently confronting immense change – and like all change, this brings both risk and opportunity. New technology, new market entrants, new sustainability demands, new customer expectations and new business models are all impacting supply chains around the world, and as the world shifts to embrace the fourth industrial revolution, we need to make sure our global trading system is adaptable, future-proofed and fit for purpose. The technology that’s already available to us, deployed in the right way, can get the world moving again and ensure our global trading system has the resilience it needs for the long term.”
Mike Bhaskaran, Chief Operating Officer, Technology and Logistics, DP World said: “At a time when trade wars and other political uncertainties have dominated news headlines, unprecedented events have upended global trade. However, such black swans can’t be treated as one-offs as they are the agents of change, signalling to the international community that it is time to come together to make global trade more resilient and robust.”
Fadi Farra, Managing Partner, Whiteshield said: “The Global Freight Resilience Index is a good indication of how the business environment of a country will perform and how quickly businesses might rebound after taking an economic blow from a crisis such as COVID-19 pandemic. These are critical insights for businesses to make far reaching choices as they build facilities, extend supply chains, and cultivate new markets. It also enables policy makers to make informed decisions.”
The private session at the event brought together key global policy makers and representatives from international financial institutes and 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 a presentation of 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.
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 resilience level of countries to sustain new freight and logistics shocks. Future leadership and innovation in logistics coming from established or emerging markets was also discussed.
The 2022 report reveals that Europe, North America, and Asian Tigers are the leading regions in terms of freight resilience. Top-ranking basket of countries remained stable over the past 3 years with the most noticeable performers successfully capitalizing on introduced policies and logistical expertise.
Singapore tops the GFRI 2022 rankings and is a global hub projected to grow its freight and logistics sector to $115billion by 2023 while the USA’s spending on key freight technologies is set to reach $88 billion by 2024. UAE – Abu Dhabi and Dubai – is also set to spend $1.3 billion through 2022 in port expansions to strengthen the country’s position as a global hub for trade and logistics.
The index highlights that Port-Brexit disruption has been lighter than expected as volatility was masked by the coronavirus response and also sheds 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 greatest improvement.