Volatility is expected as supply chains restructure through the rest of 2024, but indicators suggest a period of greater stability is beginning compared to the swings of the past four years, it noted.
Whereas in the past, supply chains shifted for economic reasons, today the shift is also driven by politics, mostly related to the interests of the US-led West, China and Russia, said the report.
Commodity prices remain elevated despite weaker demand. This phenomenon is puzzling experts, who are hard pressed to explain the growing disconnect between the forces of supply, demand and prices, the report noted.
Similarly, shipping prices regained strength, partly due to the ongoing Red Sea crisis and the diversion of shipping around the Cape of Good Hope. Port congestion in Asia is also to blame, tying up ship capacity and increasing demand, it noted.
Several emerging economies stand to benefit from the restructuring of global supply chains. These include India, Malaysia, the Philippines, Thailand, Vietnam, and Indonesia. Each country has strengths and weaknesses that will determine the kind of industries they attract, the report by the Hong Kong-based extended supply chain management solution provider said.
The most significant shift and challenge to U.S. hegemony is the deepening relationship between Russia and China, which is evident in the growth of both exports and imports, it added.
ALCHEMPro News Desk (DS)
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