New research shows that business is feeling the effects of inflation, geopolitical tension, port congestion and transportation costs in dramatically different and regionally specific ways, with those in South America and Africa facing a more negative business outlook.
The study, conducted by Economist Impact, surveyed executive-level participants representing businesses in 26 major countries across the globe. The research was commissioned by DP World, global logistics company and a key participant in the World Logistics Passport.
In South America and Africa, executives have a more negative outlook on the impact of transportation costs on business outlook – even when compared to other developing countries.
For example, 42.5% and 49.5% of executives surveyed in South America and Africa respectively identified higher transport costs as the top limitation for increasing exports. This compared to 19.9% for those in China, 27.5% in India and 25% in the UAE.
Improvements in port and logistics infrastructure are cited as a key route to trade growth – for imports in particular. Nearly one in three (31.7%) business leaders across the identified markets indicated that improved port and logistics infrastructure are drivers of import growth.
Both hard and soft port and logistics infrastructure are part of this important driver of growth – with trade routes, technologies and streamlined partnerships being examples of soft infrastructure. For example, over half (55.7%) of executives said that their company had either implemented digital solutions to enable seamless movement through customs and border control in 2021 or planned to do so in 2022.
Nearly one in two (47.9%) executives around the world are seeking more diversity of supplier base regardless of location, with approximately three in five executives (59.2%) saying that choosing suppliers and markets based on the lowest possibility of being caught in a geopolitical dispute is ‘absolutely critical’.
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