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Most Plan Africa Expansion Despite Cautious Outlook on Emerging Markets
DUBAI, UAE, Feb. 6, 2024 /PRNewswire/ -- Global logistics executives, still worried about the recession, say they are battling higher costs, reducing dependence on sourcing from China and planning to boost investment in Africa to despite considering investing in emerging markets in general as riskier.
Half of the 830 industry professionals surveyed for the 2024 Agility Emerging Markets Logistics Index expect a global recession in the next year, compared to nearly 70% a year ago.
More than 63% of respondents say their companies continue to restructure supply chains by spreading production to multiple locations or relocating to domestic markets and nearby countries. China, the world's top producer, appears to be the hardest hit: 37.4% of industry professionals say they plan to move production/sourcing out of China or reduce investment there.
"Shippers are struggling to minimize supply chain risk and find new growth opportunities. Inflation and recession risks have receded, but the industry is still living with the aftershocks of the COVID pandemic. At the same time, companies "They are concerned about geopolitics - the troubled trade relations between China, the United States and Europe, and the tangle of sanctions against a growing number of countries," said Agility vice president Tarek Sultan.
The survey and index are Agility's 15th annual snapshot of industry sentiment and ranking of the world's top 50 emerging markets. The Index ranks countries according to their overall competitiveness based on their logistics strengths, business climates and digital readiness, factors that make them attractive to logistics providers, freight forwarders, air and sea carriers, distributors and investors.
Shipping and logistics costs that skyrocketed during the COVID pandemic and its aftermath continue to rise, but at a slower pace, the survey found. One way shippers hope to address the situation is by increasing the use of digital freight transportation from 37.8% today to 52% within five years.
Meanwhile, the industry is preparing for increased investment in Africa. Nearly 62% of professionals say their companies are planning additional or first-time investments in Africa, compared to only about 7% exiting or pulling back there.
China and India, the two largest countries in the world, maintained their positions in first and second place in the overall ranking. The United Arab Emirates, Malaysia, Indonesia, Saudi Arabia, Qatar, Vietnam, Mexico and Thailand completed the top 10. South Africa, at number 24, and Kenya, at number 25, took the top spots among sub-Saharan African countries.
Three of the four countries offering the best trading conditions in emerging markets are located in the Arabian Gulf: United Arab Emirates (1), Saudi Arabia (3) and Qatar (4). Malaysia (2) and Jordan (5) moved up the business fundamentals rankings.
China and India ranked first in domestic and international logistics. In digital readiness, China jumped three spots to No. 1, followed by the United Arab Emirates, Malaysia and Qatar. India fell from first place a year ago to fifth place this year.
Outside of the top 10, many of the biggest variations in rankings from year to year involved countries experiencing conflict, facing international economic sanctions, or suffering from chronic economic instability. Among them: Ukraine, Russia, Iran, Ethiopia, Argentina, Lebanon, Tunisia.
Index Highlights 2024
Transport Intelligence (Ti), a leading analytics and research firm for the logistics industry, has compiled the Index since its launch in 2009.
John Manners-Bell, CEO of Ti, said: "Supply chain managers are still coming to terms with the political and economic instability that characterizes the post-COVID global economy. Geopolitical relationships are changing rapidly and this is having a major impact. in international relations and risk profiles. Companies must be alert to the opportunities and threats that exist in emerging markets and use data, such as the Agility Emerging Market Logistics Index, to inform agile decision making."
2024 Agility Emerging Markets Logistics Index: agility.com/2024index
About Agility
Agility is a global leader in supply chain, infrastructure and innovation services with more than 45,000 employees across six continents. Agility, a multi-business operator and investor, specializes in growing and scaling operational businesses. Agility companies include the world's largest aviation services company (Menzies Aviation); a global fuel logistics business (Tristar); the market leader in logistics parks in the Middle East, South Asia and Africa (Agility Logistics Parks); and a commercial real estate company developing a mega shopping center in the United Arab Emirates (UPAC). Other Agility companies offer customs digitalization services, remote site infrastructure services, government and defense services, and e-commerce and digital logistics enablement. Agility invests in innovation, sustainability and supply chain resilience, and has minority stakes in a growing portfolio of listed and unlisted companies.
Website: www.agility.com
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