top of page

How Trade Facilitation Can Support Supply Chain Diversity In a Post-Pandemic World

World Economic Forum: Resolving the global supply chain crisis requires collaboration across the trade community.

  • The pandemic has exposed vulnerabilities in the global supply chain.

  • Developing economies have been hardest hit by this disruption.

  • Public-private efforts can help deliver trade facilitation reforms.

After two years of a global pandemic, international trade is bruised and battered. The carefully tuned machinery we call the supply chain has become erratic, impacting all parts of the world. We overestimated the sturdiness of the system and underestimated the costs of dysfunction. While international trade remains resilient, its recovery will probably take an adjusted form.

Emerging economies are bearing the brunt of the pandemic inflicted trade disruption. Countries that painstakingly invested in joining the international value chain producing textiles, machinery parts, electronic components and agricultural produce are feeling the pinch.

Bananas are piling up in seaports due to shortages of containers and carton boxes; vehicle parts manufacturers are missing their service level agreements due to late arrival of consignments at the assembly plants; and emerging e-commerce micro-enterprises are struggling as they face increasing transportation costs.

COVID-19 is reshaping global supply chains

Behind the statistics and the headlines, there are people. Stretched supply chains threaten job stability, downsize business expansion plans, reduce investment, and undermine government tax revenues in the very countries that can least afford to cushion the blow by supporting the private sector through to recovery.

We can counter this disruption by increasing our efforts to cut the unnecessary delays and red tape at borders that continues to cause frustration, generate unnecessary costs and affect livelihoods. What used to be considered an inconvenience, or the cost of doing business, risks terminally damaging developing nations competitiveness in supply chains.

But a crisis can also be a catalyst for change and the sheer scale of this pandemic presents an unprecedented opportunity for reform. Large enterprises, realising the fragility of their production processes, are scrambling to rethink their operations. Boardroom executives are considering spreading risk among multiple production plants, multiplying component suppliers, shortening the distances between production and assembly facilities, and bringing their manufacturing closer to their customers.

9 views0 comments


bottom of page