Biz leaders see trade recovering from Covid faster than 2008 crisis: Study

Firms reallocating a third of their revenue from the first half of 2020 to re-modelling their supply chains

A study commissioned by global logistics operator DP World has found that 70 per cent of businesses predict trade will recover to pre-pandemic levels more quickly than recovery after the financial crisis of 2008, which took two years and two months.

Nearly a third thought the recovery would be twice as fast, with trade returned to pre-pandemic levels within a year.

The study conducted by The Economist Intelligence Unit, said that the data showed that the pandemic has brought lasting change to the way companies do business.

Eighty-three per cent of executives indicated that they are in the process of reconfiguring their supply chains by switching or adding new suppliers, using different logistics providers; and/or changing production or purchasing locations.

About 65 per cent of respondents said the reconfiguration process would be complete within one year—no easy task given the intricacies involved in changing supply chains, which are the products of years of investment, relationship-building; education and training among a host of other factors.

During the early stages of the pandemic, shutdowns and disruption to production exposed vulnerabilities such as over-dependency on single geographies and a lack of transparency on the movement of cargo.

Many of the world’s major economies were in lockdowns of varying severity, international travel had come to an almost complete stop and supply chains for essential goods were complicated by demand and supply shocks they were not prepared for.

“The impact of the Covid-19 pandemic has redefined how the world stays connected, and companies conduct business,” Sultan Ahmed Bin Sulayem, chief executive officer and chairman of DP World was quoted as saying.

Part of the study also showed that on average, firms said they are reallocating a third of their revenue from the first half of 2020 to re-modelling their supply chains, while a fifth said they will spend more than 50 per cent of H1 revenues.