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Report finds supply chain pressure still among top industry concerns

The latest research from GlobalData finds that numerous geopolitical situations are impacting various freight companies in different ways

New research from GlobalData has found that logistics and shipping companies are still finding supply chain pressure to be a major issue in the first quarter of this year.

Amid the ongoing Red Sea crisis and heightened geopolitical tensions in the Middle East, the impact on global trade and operations has so far resulted in a reshaping of trade dynamics and mounting pressure on companies’ logistical capabilities.

GlobalData’s latest data and analytics report finds that supply chain pressure is the prominent concern for companies to start this year, with geopolitical flashpoints like the Panama Canal and South China Sea also impacting the global industry.

GlobalData’s report highlights the impact of geopolitical situations, such as the Red Sea crisis, on global supply chains and the increased shipping costs and delivery times that come as a result.

“Political instability and geopolitical tensions continue to impact business operations,” GlobalData business fundamentals analyst Misa Singh says.

“Regional conflicts are impacting suppliers and companies in sourcing and delivering products. The persistent tension in the South China Sea has also contributed to disruptions and as these disruptions reshape freight flow, and subsequently the supply of goods may be delayed and result in soaring shipping costs.”

An example is Penguin International Limited, who is experiencing supply chain disruption and cost escalation from European suppliers shipping through the Red Sea.

In the aerospace sector, Airbus SE has discussed a different experience, having benefited from the geopolitical scenario due to an increase in air freight demand.

On the shipping side, GlobalData says shipping companies are taking longer routes around the Cape of Good Hope, Cape Horn and the Suez Canal to get to their destinations, putting further pressure on companies in the supply chain.

“Years of disruption following the COVID-19 pandemic and geopolitical tensions have increased the vulnerabilities of global logistics,” Singh says.

“Many supply chains have become progressively more extensive and interconnected, making them susceptible to disruption and delays, and companies will surely keep an eye on how things unfold.”

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