Surge in UAE’s supply chain reflects Q4 uptick in global trade

An upswing in supply chain activity in the UAE, a global nerve-centre of logistics, signals a significant jump in world trade volumes in the last quarter of 2020.

In the fourth quarter of last year, global trade volumes grew by more than 13 per cent over a January 2020 baseline and nearly 30 per cent from the lowest point in the second quarter of the year, new data from Tradeshift’s Index of Global Trade Health show.

The fourth quarter of 2020 witnessed a significant recovery in global supply chain activity, with quarterly growth rates exceeding pre-pandemic levels by 14 per cent.

The UAE, a redistribution gateway for multinational corporations, has transformed itself from a logistics hub into a supply chain nerve-centre in recent years.

Strategic geographical location and world class infrastructure have positioned the UAE as an ideal supply and redistribution gateway and offers huge growth potential for businesses.

The UAE’s trade facilitation reforms, fast customs clearance and strategic location in the east west trade route have been key to transforming the nation as the logistics hub and a gateway for Asia, Europe and the Middle East and Africa region.

Tradeshift’s data shows businesses in China have been operating at near-normal capacity since April 2020. Cumulative transaction volume growth since Q2 stood at an incredible 118 per cent at the end of 2020 compared to an overall activity shortfall of 3.4 per cent globally during the same period.

“China has significantly outperformed the West by bouncing back quickly,” said Christian Lanng, CEO, Tradeshift. “The consistency we’re seeing in transaction data offers a level of predictability that has yet to return fully in other regions.”

Tradeshift’s analysis of digitized invoicing and ordering data suggests a particularly strong end to the year in the US, where the number of transactions between buyers and suppliers jumped 29 per cent in Q4, double the rate of growth seen globally during the period. Trade activity in the Eurozone rose 22 per cent compared to the previous quarter.

The latest data also shows strong order books among buyers in almost every region, suggesting news of a vaccine roll-out in December prompted organizations to press ahead with purchasing decisions that may have previously been delayed or cancelled.

“Covid exposed an imbalance in the relationship between buyers and suppliers. As buyers focus on building resilience to future shocks, we need to consider how best to equip suppliers to come with them on that journey,” said Lanng.

issacjohn@khaleejtimes.com