Nearly 70% of global logistics executives say they are bracing for recession amid higher costs, slowing demand, and ongoing supply chain disruption arising from China’s battle to contain COVID, Russia’s war in Ukraine, and the impact of climate change.
Ninety percent of the 750 industry professionals surveyed for the 2023 Agility Emerging Markets Logistics Index also say their shipping, storage and other logistics costs remain well above the pre-pandemic levels they were at in early 2020.
The Index ̶ compiled by Ti Insights, leading analysis and research firm for the logistics industry ̶ ranks China number one, however only 11% of respondents say their company’s manufacturing footprint is the same as before COVID.
“Carriers and shippers are feeling the effects of higher energy prices, tight labour markets and broader inflation even though freight rates have fallen and ports have cleared cargo backlogs,” said Agility Vice Chairman Tarek Sultan. “Three years after the start of the pandemic, there is still a lot of volatility in supply chains. Now there’s fresh uncertainty as consumers and businesses pull back on spending and hiring.”
“It is not possible to overstate the challenges faced by emerging markets countries in the past couple of years,” said Prof. John Manners-Bell, founder of Ti Insights and data platform GSCi. “Geo-political tensions have combined with financial uncertainty and the lingering effects of the pandemic to create an ever more complex business and investment environment. The role that the Agility Emerging Market Logistics Index plays in providing insight into this volatile and uncertain environment landscape is more critical than ever.”
The survey and Index are Agility’s and Ti Insight’s 14th annual snapshot of industry sentiment and ranking of the world’s 50 leading emerging markets. The Index ranks countries for overall competitiveness based on their logistics strengths, business climates and digital readiness — factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.
China and India, the world’s two largest countries, held their spots at No. 1 and 2 in the overall rankings. UAE, Malaysia, Indonesia, Saudi Arabia, Qatar, Thailand, Mexico and Vietnam rounded out the top 10. Turkey, No. 10 in 2022, dropped to 11th. No. 24 South Africa and 25 Kenya were highest among countries in Sub-Saharan Africa.
Arabian Gulf countries – UAE, Qatar, Saudi Arabia and Oman — again offered the best business conditions. Malaysia, with the 4th best environment for business, was the only non-Gulf country in the top 5.
China and India were tops for domestic and international logistics. India jumped four spots to No. 1 in digital readiness, followed by UAE, China, Malaysia and Qatar.
Farther down, there was more volatility in the rankings than in any prior year of the Index. Conflict, sanctions, political tumult, economic missteps and continued COVID fallout damaged the competitiveness of Ukraine, Iran, Russia, Colombia, Paraguay and others. Among countries leaping forward in certain categories: Bangladesh, Pakistan, Jordan, Sri Lanka and Ghana.
2023 Index Highlights
Source: Transport Intelligence, 7th Feburary 2023
Author: Transport Intelligence & Agility
Supply chain strategists can use GSCI – Ti’s online data platform – for key decision making.
GSCI data can help users identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends, as well as understand future impacts on the industry.
THE 2023 AGILITY EMERGING MARKETS LOGISTICS INDEX
NOW AVAILABLE TO DOWNLOAD
Recession risk, inflation, Covid lows, war in Ukraine and major location shifts shape this year’s Index.
Emerging markets have faced extraordinary challenges over the last 2 years, making this year’s Agility Emerging Markets Logistics Index more critical than ever.