A new survey from DP World, released on Nov. 14, which surveyed dozens of freight forwarders in October, paints a stark picture of an industry in turbulence, with climate change and access to talent weighing heavily on business resilience and the ability to create seamless supply chains.
Some 63% of the respondents said Inflation is the main concern, while 56% cited geopolitical tensions as another major cause of concern.
The findings from the survey were showcased at the Global Freight Summit, inaugurated by Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates airline and Group and Chair of the World Logistics Passport (WLP) Global Steering Group, and attended by Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, as well as members from the Digital Freight Alliance (DFA).
The survey found that around 10% of the respondents said they had changed the markets they do business in due to uncertainty. While 78% said they expect geopolitical tensions and inflation to remain concerns over the next five years, with two-thirds (66%) of freight forwarders believing it is ‘impossible to say’ when economic disruptions will subside.
However, many in the supply chain industry appear cautiously optimistic, especially with regard to technology. . Three-quarters (75%) of the respondents said they expect technology to be a significant factor in easing the current supply chain woes. In fact, more than half (56%) believe digitalization will be the single biggest driver of efficiency, reducing bottlenecks and supporting the industry going forward. Technology will have a considerable impact on the supply chain, with three in four saying it will lead to cost savings and a greater ability to target and deliver to new customers.
But many were unclear on how to integrate technology into their industry, with a third saying they wanted to, but simply did not know how to do it. It is unsurprising then that half of the freight forwarders said they are further behind on their company’s digital transformation journey than they had hoped.
Other challenges that freight forwarders are currently experiencing include rising and unpredictable freight rates, with 80% highlighting this as the biggest worry keeping them awake at night. The lack of financing options is another major issue, with 37% of those surveyed saying this has a crippling effect on their ability to deliver goods.
Interestingly, whilst the pandemic has disrupted every industry, including logistics, it has resulted in several positive benefits. A third of freight forwarders said it prompted a much-needed overhaul of their business, with 41% saying it has changed how they track cargo. Over half (54%) said it has increased pressure on management to operate more sustainably.
"The uncertainties of today’s world are making trade harder and it is increasing the disconnect at various points across the whole supply chain, " said Mike Bhaskaran, Group Chief Operating Officer, Digital Technology at DP World, in a statement. " The freight forwarding community must come together to act now to mitigate risk, so that we can build towards a more resilient future."
