Global supply chains – the arteries of modern commerce – are facing immense challenges. The pandemic’s disruptive shock waves, geopolitical tensions and climate-induced crises have pushed these systems to their limits.
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Covid-19 marked the first major disruption, halting trade routes, triggering container shortages and driving freight costs to historic highs. Since 2023, persistent disruptions at maritime chokepoints such as the Black Sea, Red Sea, Suez Canal and Panama Canal have intensified inflation, prolonged shipping times and strained economies. These disruptions reshaped global trade, tested governments and even contributed to political unrest.
The impact is particularly acute for small island developing states and least-developed countries, which depend heavily on imports. Small and medium-sized enterprises (SMEs), often operating on razor-thin margins, have been hit the hardest.
These cascading crises reveal a sobering truth: global supply chains are fragile and inequitable. Addressing this requires a fundamental rethink, with a focus on three pillars: inclusive, sustainable and resilient supply chains.
Supply chains must work equitably for everyone – from multinational corporations to SMEs and traders in developing economies. SMEs, which account for over 90 per cent of businesses globally, are vital to economic growth yet bear the brunt of disruptions.
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Container freight rates surged in early 2024, with the Shanghai Containerised Freight Index reaching 2,130 points in January, double its December 2023 level. Further disruptions caused rates to peak above 3,700 points by mid-2024. For small traders handling lower-value, higher-volume goods like agricultural products and textiles, container prices often exceeded the value of the goods inside, making trade untenable.