The global economy has been facing geopolitical instability, which has created significant challenges for the supply chain infrastructure worldwide. The continuing trade tensions between the US and China, as well as the Ukraine war, have created a lack of trust between countries, resulting in a need for supply chains to become more agile and adaptable.
The COVID-19 pandemic has also highlighted the importance of supply chain resilience, and the need to develop a more flexible approach to overcome the challenges of today and tomorrow. Stable relationships and climate conditions are crucial for the free flow of goods and information across borders. However, the increasing mistrust between countries and the changing climate conditions have made it necessary for supply chains to adapt to the needs of businesses and customers.
DP World’s annual research, conducted in partnership with Economist Impact, has highlighted a shift towards regionalisation and reshoring as a result of the current geopolitical situation. The study revealed that up to 20% of leading UAE executives cite trade shocks and inflation as top barriers to growing exports this year, and 24% of respondents have begun regionalising in 2022, compared with 13% in 2021. Similarly, 21% are reshoring, compared with 8% in 2021.
To ensure these changes are resilient and bring long-term value, traditional globalisation is being redefined by reshoring, with major companies moving to manufacture closer to home markets. DP World has been at the centre of this shift, creating regional hubs and port-centric capabilities to store inventory while diversifying transport routes. This adds further resilience by ensuring goods are nearby and always have multiple, dependable options available.
However, it is essential to maintain a balance between regionalisation and globalisation, as companies and communities rely on access to all corners of the world. Therefore, it is necessary to improve the physical as well as the digital trading infrastructure to ensure supply chains remain agile to global conditions.
Utilising technology is crucial to this process, and the UAE is a world leader in this regard. DP World has been investing heavily in solutions that aid greater communication between shorter, localised supply chains and global ones. DP World’s “Cargoes” suite is a prime example, streamlining every step of a cargo’s journey along a supply chain. This tool can be used to better manage customer expectations, make more informed, cost-effective decisions regarding inventory, and adapt services accordingly where necessary.
In an era of greater regionalisation, DP World’s approach helps to ensure that companies can remain connected to the global economy while also adapting to local conditions. By leveraging technology and building a more flexible infrastructure, supply chains can become more agile and adaptable to overcome the challenges of geopolitical instability and climate change.
