Logistics executives increasingly believe top companies should look to bring their supply chains closer to home to avoid being impacted by trade wars, sanctions and other global shocks, a new survey has found.
Supply chain managers increasingly see ‘onshoring’ and ‘near-shoring’ as a means of hedging against disruption to global trade caused by the Covid-19 pandemic, the Thomson Reuters report says.
More than three-quarters (78 per cent) of global trade executives polled said major companies should begin “diversifying” their supply chains to hedge against disruption to international trade, the survey of 228 logistics professionals found.
The survey also found trade professionals are becoming increasingly concerned about the impacts of trade wars, tariffs and sanctions on their supply chains, amid mounting geopolitical tensions.
Almost half (44 per cent) of global firms said trade wars are already impacting their businesses, including 69 per cent of US companies and 90 per cent in the Asia-Pacific.
“The trade war between the United States (US) and China, retaliatory tariffs, sanctions, inflation, political instability, Russia’s invasion of the Ukraine, Brexit — all have implications on global trade,” the report said.
“Ongoing trade disputes between the US and China affect companies in virtually every industry, and broader US tariffs on steel and aluminium have prompted such countries as Canada, Mexico, India, and Turkey to retaliate with their own tariffs on a variety of US goods. Consequently, it’s not surprising that the country with the highest number of companies affected by retaliatory tariffs is the US,” the report said.
Companies in the US, EU, and UK cited regulatory changes associated with Russia sanctions as one of the major factors currently impacting their businesses, the report found.
The logistics professionals believed the world’s top corporations should start working to ensure their supply chains are more reliable, by shifting production closer to home and bringing on board local suppliers.
“Conversations on trade management issues – like supply chain stability, tariffs, sanctions, and customs compliance – have been thrust into the spotlight in recent years, and for good reason,” Brian Pecceralli, Thomson Reuters chief operating officer, said.
“Any organization involved in import/export activities must understand that a healthy business is contingent upon strengthening its modern global trade management system,” he added.