Recently, my attention was drawn to an article quoting Goldman Sachs Research that suggested the world economy in 2024 is expected to outperform previous projections, with worldwide GDP growth forecast to expand to 2.6% this year.
The article, which was written before the supply chain chaos caused by the crisis in Red Sea, stated that supply chain resilience will remain important in 2024 with so many risks to navigate like trade protectionism, international conflicts, leadership elections in major global markets, industrial unrest, and droughts worsened due to a severe El Nino.
It would appear that the only certainty is uncertainty. Events in the ocean freight environment in the last four weeks are further evidence that we can’t predict the future and plan for each scenario. Working resiliency into supply chain will remain key to staying adaptable and nimble when planned or unplanned disruption occurs.
Notwithstanding the current crisis in oceanfreight, to which we all hope a solution is found soon, the softer freight market in 2023 helped many sectors, primarily air, return to the more cyclical patterns from 2019 and earlier.
From there, more consistent ordering patterns followed. These more consistent ordering patterns will hopefully feature in 2024. This, combined with a break from the pandemic backlogs, gave shippers a chance to rethink their supply chains based on other factors, such as shifting consumer behaviours.
While the return of cyclical and traditional patterns is a relief, shippers should remember that disruption can happen quickly and often unexpectedly - even in a traditional market. While disruptions aren’t new, 2024 does hint at them presenting more unique challenges.
It's not just risks that are altering the global landscape. Trends like reshoring and nearshoring, particularly in Southeast Asia, India, and Mexico, are contributing to the shift in the flow of freight. And with nearshoring helping to strengthen supply chain resiliency, it’s unlikely to slow down in 2024.
Since 1968, U-Freight has developed a portfolio of air, ocean and overland freight and logistics services, offered by a global network for which resiliency is key.
That resiliency is based on being nimble in our decision making, and swift in our response to changing market conditions; whilst continuing to focus on yield and customer service, rather than volume and sales revenue.
2024 promises to be another year of investment for the U-Freight Group, with further growth in our global operations and services as you can read in our latest newsletter, which I hope you enjoy.
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And, with the start of the Chinese new year of the dragon less than one month away, I would like to wish you “kung hei fat choy” or, if you prefer “gong xi fa cai”