An unforeseen event had an impact in import-export business opportunities. On the morning of March 23, the 20,000-tonne, 400-metre long Ever Given cargo ship ran aground in the Suez Canal and shut down international shipping for six days. The manmade waterway is a major East-West trade connection for exports ranging from auto parts to computer equipment to furniture to clothing.
Export opportunities to China as well as overall import-export business opportunities were jeopardised as the disruption cost global trade USD6bn to USD10bn a day according to our estimation. “We calculated that the interruption to trade would mean 0.3% point downward revision in our forecast,” says Françoise. “If we hadn’t had the Ever Given stuck in the Suez Canal, the +7.7% increase we predict for this year in our global trade forecast would have been +8.0%.”
Because of this event, export opportunities could be momentarily reduced, while further costs to global trade could arise due to supply chain disruptions, already frayed during the Covid-19 crisis. We estimate that supply chain disruptions other than the Suez Canal event would cost at least 1.5% point to global trade growth in volume terms this year. In value terms, supply chain bottlenecks are actually pushing prices and thus our forecast higher.
“One lesson that has emerged recently is that it’s very important for companies to have a good knowledge of their supply-chain exposures and a good knowledge of their suppliers.” says Françoise. “Companies need to look for solutions in order to be prepared if a crisis emerges that would hit their supply-chains.” Having a “Plan B” is necessary if you don’t want to miss out on export business opportunities.
Some 20-30% of companies in a supply chain survey we conducted late last year said they are considering home-shoring or near-shoring. “For example, a lot of economies are putting subsidies in place to encourage companies to ‘come home’,” Françoise adds. “But according to our analysis, China still appears as the top destination for companies looking for supplies outside their home country. So it’s not the end of the Chinese supplier yet.” And, as China’s economic rebound is ahead of the rest of the world, it’s also not the end of export opportunities to China.
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