Although the supply chain crisis as a result of the impact of Covid-19 has been concluded, it is clear that things do not go from white to black overnight. So while ports may be opening up and freight rates may be coming down, there is still angst on many counts, especially considering the difficulties the global economy is going through. Oren Klachkin, chief US economist at Oxford Economics, told Bloomberg that “2023 will be a better year, but supply chains will continue to cause headaches” and “the speed at which supply-side entanglements are resolved It will be key to determining how quickly inflation falls.”

HSBC has indicated that world trade growth next year will likely slow to 1,1%, from a rise of 6,1% this year, to match the rise in 2019 during a global industrial recession. According to HSBC economist James Pomeroy, it will be key to see how consumer demand responds to high inflation rates, as well as a return to travel and leisure spending after a couple of years spent on buying estate. "It seems likely to me that we will enter a year next year in which, on the goods side of the economy, the question will not be about inflation, but about deflation," he points out, not ruling out a demand for more goods. weak.

A key stretch of supply chains is shipping, so it is important to know how it will perform in 2023. In this regard, Xeneta chief analyst Peter Sand said that 2023 will see global container volumes moved fall as the cost of living crisis takes its toll on consumers. “Rates will come down,” he said because cargo capacity is growing steadily through the second quarter of 2024. “Disrupted supply chains should be able to fully unwind year-round: first in the ocean, then on. on the inside,” Sand said, adding that labor strikes and outbreaks of Covid infections in China pose risks to the outlook.

Hopes are for the second half of 2023

Referring to the projected market strength for 2023, Heath Zarin, founder and CEO of EV Cargo, noted that “our expectation is that the first half will be more or less the same: continued economic weakness or weakness, which will then manifest in chains supply systems that work better, but in general there is less economic activity. The earliest we are seeing a recovery is in the second half of the year.” Along with this he expects a return to a high level of M&A in supply chain services, especially in inland logistics. Proof of this is Deutsche Bahn's interest in exploring the sale of its logistics unit DB Schenker. “The pace of consolidation in the industry, both vertically and horizontally, is something that has been accelerated by Covid, and that will definitely continue,” he said.

Analyst Chris Rogers also believes that 2023 will have two phases: “high inventories still need to be dismantled. Wage inflation will overtake logistics and commodity prices as a driver of supply chain costs. High interest rates will spell trouble for trade financing.” Going into the second semester, he estimates that there will be some hope of normality and that only then will it be possible to "obtain some evidence of whether three years of change and a trade war really changed someone's strategies,"

Bill Seward, the new president of supply chain solutions for United Parcel Service (UPs), who told Bloomberg that “a lot of companies still feel disgusted and burned by what happened with regard to accessibility” in reference to the bad Memories left over two years of shipping congestion, delivery disruptions, and component shortages around the world.

He details that "many senior executives feel very mistreated over the last two years with respect to reliability and there is a great emphasis on the ability to reduce risk and be able to flex in different ways." Thus, for example, UPS observes that repositioning trends (something that analysts anticipated) shift the demand for their services to markets such as Mexico. “Manufacturing costs and stuff are definitely not going down,” he said, so “you see changes in terms of where manufacturing will be and we're seeing it in our business. We are definitely seeing this shift to different geographies.”

The technological revolution will be another trend that will not slow down. In this regard, Julie Gerdeman, executive director of Everstream Analytics, affirms that "the pandemic increased the cadence, variety and intensity that overwhelmed an already overloaded system," she said. "The sooner companies get involved and take advantage of technology, the more impact and improvement they can achieve in logistics and value chains."