North American businesses are optimistic about 2024, balancing their concern about geopolitical events with a growing belief that technology will transform the efficiency and resilience of supply chains in tandem with agile trade strategies, according to a study from Economist Impact and DP World.
The fourth annual “Trade in Transition” report was commissioned by Dubai-based transportation provider DP World and led by researchers at Economist Impact. It is a global survey that retrieves data from over 3,500 executives, examining private sector sentiment on international trade and supply chains.
The survey found that when asked to assess the future of global trade, one-third of North American business leaders pointed to technologies that improve supply chain efficacy and resilience as their main source of optimism.
In the coming year, businesses plan to incorporate advanced automation (28%), augmented or virtual reality (27%), 3D printing (26%) and blockchain technology (25%) to enhance efficiency, traceability, security and data protection. And 97% of executives are using AI to revolutionize at least one aspect of their supply chain operations, from solving inventory management issues to reducing trade expenses.
Another strategy businesses are using to manage risk is streamlining their supply chains. Specifically, North American businesses are nearshoring, establishing parallel supply chains, and expanding into neutral markets. And increasingly, companies are reconfiguring their supply chain by working with fewer suppliers – a strategy up by 160% over last year’s report.
Survey respondents said they are taking those steps to handle an array of trade hurdles expected to surface in 2024: challenges in exporting and importing due to transport expenses (26%), shortages of vital production inputs (22%), and concerns about rising inflation and economic unpredictability (27%). Uncertainties surrounding tariffs also remain a substantial concern, with 20% expressing apprehension regarding exports and 21% concerning imports.
“Businesses are inherently cautious amidst ongoing economic pressures, especially given heightened geopolitical tensions,” Brian Enright, CEO & Managing Director, DP World Americas, said in a release. “The intricate dynamics of globalization and the broader landscape are reshaping global trade. There is a growing conviction that technology integration, coupled with agile supply chain strategies, has the potential to revolutionize the efficiency and resilience of supply chains, enabling businesses to adapt more quickly and seamlessly.”
Gartner, Inc.