In a bid to shorten supply lines as a means of possibly avoiding supply-chain disruption, 96% of manufacturers approached in a study focusing on “near-shoring” have said that geopolitical events are forcing them to make changes to their supply lines.
The study, commissioned by Dubai logistics multinational DP World and Economist Impact, titled 'Trade in Transition', found that the near-shoring momentum had picked up in 2022, doubling year on year.
“The change has been swift,” a statement released by DP World said.
“In the space of just a year, the number of companies shifting their manufacturing and suppliers – either to their home markets or nearby – has doubled compared to 2021.”
The statement added that the trend to shorten supply lines was driven mainly by costs and the risk of disruption.
Coinciding with the World Economic Forum gathering in Davos, Switzerland, this week, the report also points out that the shift from lengthy globalised supply lines to shorter, more trade-bloc-orientated arrangements, is uneven.
The study showed that “while 27% of companies said they were decreasing the length of their supply chains due to geopolitical events such as the war in Ukraine, another 33% plan to expand into more stable and transparent markets”.
Commenting on the study’s findings, DP World CEO and Group chairman, Sultan Ahmed Bin Sulayem, said: “The report is tangible evidence of how globalisation is changing as companies are forced to adapt to new challenges.
“By bringing production closer to the final customer, firms can reduce the number of touchpoints involved in the supply chain and build greater resilience into the flow of cargo around the world.”
* Follow Freight News for more information that has emerged through the Trade in Transition study.
