Supply chains are getting shorter. This is highlighted by the study "Trade in Transition 2023" prepared by Economist Impact, research firm of The Economist Group, and commissioned by the terminalista group DP World of Dubai, report which is now in its third annual edition and that in the last publication analyzes the response of companies with respect to one trade scenario that has been impacted by global shocks, such as the war in Ukraine and the repeated lockdowns to contain the spread of the COVID-19 pandemic also in key markets. The Study is based on a survey carried out between September and last November interviewing three thousand executives of companies involved in international business decisions and operations in six regions: North America, South America, Europe, Middle East, Africa and Asia-Pacific.

The study finds that the health crisis and tensions Geopolitics have created great uncertainty for companies that, in response to subsequent supply chain disruptions and in Expectation of a slowdown in business activity in the During 2023, they are focusing on improving their long-term resilience with the aim of protecting against any future shocks.

The document recalls that the World Trade Organization believes that In 2023, the volume of global freight traffic will grow by one percentage point compared with the previous year, compared with +3.5% recorded in 2022 on 2021. The study notes that therefore, Despite the difficulties, there are still opportunities of growth and some of the companies are trying to reap Benefit from some small pockets of growth.

The study specifies that companies still prioritize to the growth generated by the expansion of the market, with the main export drivers that in 2023 should be the growing demand in the main markets and the expansion of activities in new markets. By contrast, inflation is seen as the first factor that in the next 24 months can have a negative impact on activities. La The Economist The Economist Group's Intelligence Unit predicts that this year the average world inflation rate will be 6.9% compared to 9.9% in 2022 and 6.8% in 2021 and the impact is expected to be on on the supply side it will have a Significant negative consequences on the profitability of enterprises.

The document also notes an ongoing reconfiguration of the supply chains, with a shift towards regionalisation and reshoring. In particular, Economist Impact explains that, compared to the previous edition of the study, it is An increase in the tendency to bring the chains closer together has been observed. procurement through nearshoring/regionalization, which recorded an increase of eight percentage points, or reshoring, which rose ten percentage points from to the survey carried out in 2021. The document notes that they are There are many reasons for this change, starting with the Reducing the impact of transport costs on exploitation economic incentives defined by governments. The study clarifies whereas, however, diversification, cited by 47% of respondents, is still the main strategy for achieve an overall decrease in costs and an increase in resilience.

According to the study, resilience is also considered priority over short-term profitability, with Companies that, looking at the long term, are sacrificing immediate profitability to achieve greater resilience. The document also highlights the prevalence of favor the "just in case" rather than the "just in time", with companies increasing their inventories: On average - specifies the study - in 2022 companies held 10.1 weeks of inventory compared to 8.9 weeks in the year and although the increase in stocks increases the costs, however, appear to offset potentially greater losses caused by the shortage of sufficient stocks.

On the occasion of today's presentation of the World report Economic Forum in Davos, the chairman and CEO of DP World, Sultan Ahmed Bin Sulayem, stressed that "the Report is tangible proof of how globalization is changing as companies are forced to adapt to New challenges. By bringing production closer to the end customer, companies can reduce the number of contact points involved in the supply chain and build greater resilience in the flow of goods around the world. However - he added - the commercial scenario is constantly evolving and the next The challenge that will change these trends is a economic slowdown looming over regional markets. Agility Real-time visibility and supply capacity End-to-end chains will be key to ensuring that companies can continue to realize new efficiencies in an environment more and more challenging».

"The passage to regionalization and reshoring - highlighted John Ferguson, practice leader for the New Globalization at Economist Impact - was stark, but not surprising given the triple threat of higher costs, greater risks and government incentives or solicitations to do so. In addition, in previous decades companies had to concentrate only on the economic aspects of trade, i.e. price, quality and delivery. Now they have to take into account other factors not economic like resilience and sustainability. All This is having a drastic change in the chains of procurement, which we are witnessing both in the results of the survey and in changes in global business models".