Supply chains, traditionally susceptible to disruption, have become more unpredictable post-pandemic, as highlighted in a global Shopify report. Ongoing challenges include sanctions, aftershocks, political instability and persistent shortages.
- Energy
- Raw materials
- Shipping containers
- Labour
This has led to weak links in how businesses source, produce, transport, and deliver goods.
Is this the new normal?
Consumer behaviour shifts towards digital retail, influenced by changes in shopping habits. The falling Australian dollar affects overseas purchases. High fuel prices persist due to currency decline and supply constraints, contributing to a 5.2% inflation rate. Automotive fuel prices surged nearly 14% in a year. KPMG estimates global production disruptions every 3.7 years, emphasising the need for robust supply chain efficiency and resilience.
Excess inventory cuts will affect transport demands
Supply chain challenges lead businesses to overstock, causing negative impacts. Research from the University of NSW reveals that brands like Burberry, Amazon, Nike and H&M often dispose of excess stock, facing consumer backlash. Global protectionism, especially in automotive parts, contributes to trade barriers, making world trade complex, costly, and less beneficial. Weak demand for transport and logistics is expected until excess stock is cleared, and e-commerce transactions rise in Australia. The world trade scenario is in correction mode, with slight growth forecasted.
Transport to/from Asian countries is strengthening
Despite a lag compared to the EU and the U.S, a global bank forecasts good growth in transportation activity to and from Asia in the ‘new normal’. India’s economy is a bright spot, set to grow 6.2% and 6.3% in the coming years. The Asian Development Bank predicts a 4.7% growth for the region. A McKinsey report emphasises Asia’s pivotal role in world order, technology, demographics, energy, resources, and capitalisation, positioning it as a hub of world trade and a global economic power. Half of the world’s highest-value trade routes pass through Asia.
E-commerce logistics return to lower trend
E-commerce logistics, having experienced a pandemic peak, now faces lower-end growth, with IAB Australia reporting stabilised domestic online retail spending. Chinese app Temu is anticipated to surpass Amazon in value. Amidst the ‘new normal’ Australian transport and logistics businesses should monitor emerging trends, emphasising the need for effective risk management strategies.