Emerging Market Trends 2022: Global Supply Chains (2023)

Macroeconomic forces such as inflation, geopolitical tension punctuated by Russia’s invasion of Ukraine and spikes in commodity prices heightened supply chain disruptions in 2022, which included capacity constraints, higher freight costs, labour shortages and port slowdowns.

According to a survey of logistics and supply chain professionals conducted in December 2022, some 71.8% of companies were dealing with supply chain disruptions, while 57.7% were trying to navigate transport capacity shortages. Of these respondents, 93% expected these challenges to continue into 2023.

International trade surged in 2021 as countries reopened from the Covid-19 pandemic’s lockdowns, and this momentum carried over into the first half of 2022. Global trade volume reached a record $32trn for the year, buoyed by high energy prices, according to the UN Conference on Trade and Development (UNCTAD) report “Review of Maritime Transport 2022”.

Emerging Market Trends 2022: Global Supply Chains (1)

From the third quarter, however, trade flows eased, with East Asia the only region to post positive trade growth. The World Bank now expects global trade growth to slow sharply in 2023 to 1%.

While a trade slowdown should help alleviate bottlenecks in supply chains, the advent of new strategies to mitigate them – including diversification of suppliers, reshoring, near-shoring and friend-shoring – means that supply chains are still shifting.

This in turn presents opportunities for emerging markets to fill production and manufacturing gaps and develop stronger regional and global trade relationships.

Production gaps

The pandemic was broadly expected to result in unprecedented disruption to the mechanics of most economies, regardless of their size or stage of development. Despite its waning threat to global health, the pandemic’s effects have directly undermined some aspects of the global economy.

Throughout 2022 China’s zero-Covid-19 policy prompted an economic slowdown, limiting manufacturing output and suppressing consumer demand. These policies had ripple effects across emerging markets, especially those whose manufacturing inputs are exported to China.

Emerging Market Trends 2022: Global Supply Chains (2)

(Video) Why Global Supply Chains May Never Be the Same | A WSJ Documentary

For the first time in decades, China’s growth forecast of 2.8% in 2022 was set to be outpaced by the 23 other countries in the East Asia and Pacific region, which are forecast to see 5.3% growth.

Since 2020 many businesses and governments have pursued a so-called China+1 strategy, diversifying their production capacity by setting up operations in other countries while still maintaining a significant presence in China.

Perhaps no country has taken stronger steps to attract foreign investment and provide a regional manufacturing and supply chain alternative to China than Vietnam, whose increased exports to the US and other markets have helped stabilise the economy.

Vietnam posted 8% growth in 2022, its highest rate since 2011, powered by 11.9% growth in the logistics sector.

Two trade agreements signed before the pandemic – the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – laid the groundwork for this positive performance and augur well for the future.

Emerging Market Trends 2022: Global Supply Chains (3)

Bangladesh, India, Malaysia and Thailand have also replaced China in global supply chains, underscoring the strength of East Asia’s performance in 2022.

Last year many analysts were predicting that the US would look to Latin America to meet its manufacturing and imports needs closer to home, and trade has indeed increased.

After ranging between $30bn and $35bn in 2021, Mexican monthly imports to the US surged to all-time highs in 2022 of $37bn-41bn. China has even sought to invest in manufacturing facilities in Mexico to skirt US tariffs and cut delivery costs to the US.

Meanwhile, the Community of Latin American and Caribbean States (CELAC), a bloc of 33 countries that includes regional heavyweights such as Argentina, Colombia and Mexico, signed the China-CELAC Joint Action Plan for Cooperation in Key Areas 2022-24, which covers a host of areas including infrastructure investment.

(Video) Top 10 Supply Chain Management Trends, Predictions, and Strategies for 2022

The 43-country African Continental Free Trade Area has also prompted developments in African countries, such as Ghana’s ongoing efforts to establish special economic zones to increase manufacturing capacity and transform itself into a key processor and exporter.

Emerging Market Trends 2022: Global Supply Chains (4)

Ports and logistics

As much as global supply chains need a greater variety of manufacturers and suppliers to fill production gaps and increase flexibility, ample infrastructure is required to ship production around the world.

The primary cause of the disruptions and surges in freight rates in 2022 was a mismatch between the supply and demand of maritime logistics capacity. With shipping accounting for more than 80% of all global trade, greater investment is needed in ports, shipping fleets and hinterland connections, according to UNCTAD.

It argues that mitigation strategies such as diversifying suppliers, reshoring, near-shoring and friend-shoring will continue to reshape global supply chains.

Digitalisation is already helping ports and the shipping industry to improve efficiency, streamline the processing of documents through e-documents and electronic payments, and create more abundant information flows in warehouses and manufacturing facilities so that artificial intelligence programmes can be trained to prevent bottlenecks.

The emergence of so-called “smart ports” can enhance international competitiveness, reduce environmental impact and improve the workplace environment.

Emerging Market Trends 2022: Global Supply Chains (5)

Meanwhile, the shipping industry has been developing a host of green technologies – from methanol and ammonium to wind – to reduce its carbon emissions. Such shifts could be coupled with investment in digital technologies.

For instance, Baja California and Manzanillo on Mexico’s Pacific coast are being discussed in this light, as the country could channel ample solar and wind power into green fuel centres for the global shipping industry.

Inflation and debt


One of the dominant stories for the global economy in 2022 was inflation, which added extra financial strain amid surging freight rates.

In May the US Federal Reserve implemented its largest interest rate increase in two decades to stem inflation in the US, and its effects have been felt around the globe.

While many emerging market currencies have weakened as a result, proactive measures by central banks have limited the damage and positioned these economies better than in previous inflationary periods.

However, a stronger US dollar makes it more expensive for emerging markets to service existing debt or consider financing new projects, which is contributing to the infrastructure investment deficit in areas where new capital is needed to solve supply chain challenges.

China’s infrastructure investment through the Belt and Road Initiative (BRI) has helped to power growth over the past decade, but the pace of investment slowed during the pandemic.

To help bridge the gap, G7 leaders pledged in June to raise $600bn in private and public funds over five years to finance infrastructure in developing countries and counterbalance the influence of China’s BRI.

New infrastructure projects are also under way that could go a long way towards alleviating pressure on supply chains. For example, the Bioceanic Corridor in Latin America aims to connect the Brazilian port of Santos on the Atlantic Ocean with the Chilean ports of Iquique and Antofagasta on the Pacific Ocean through a series of roads.

Emerging Market Trends 2022: Global Supply Chains (6)

Energy trade

Energy – the lifeblood of the global economy – was at the heart of global supply chain disruptions last year.

Since 2021 energy shortages punctuated by Russia’s invasion of Ukraine and Western policies to restrict Russian exports prompted a spike in prices, increased demand and placed additional pressure on logistics.

(Video) Top 10 Trends in Supply Chain for 2022

These trends peaked in May, when the EU announced a ban on seaborne imports of Russian oil. However, both Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members increased production so that, by the time the ban was instituted in December, the EU found itself with ample supply thanks to increased cargoes from Africa, Latin America, the Middle East and the US.

Members of OPEC and other allied oil-producing nations, collectively known as OPEC+, cut production in September as global demand softened. Underscoring oil’s volatile commodity cycle, demand is expected to rise in 2023 as China and others return to full economic productivity, with Goldman Sachs forecasting that demand could rise by as much as 2m barrel per day.

Emerging Market Trends 2022: Global Supply Chains (7)

While renewables remain a key area of growth in the energy sector, many of the related supply chains are less developed than their conventional hydrocarbons counterparts. Moreover, these green technologies involve a panoply of critical minerals including copper, lithium, nickel, cobalt and rare earth elements, and require energy- and labour-intensive production methods.

As a result of the additional steps of manufacturing components, assembling them and shipping final products, as well as China’s dominant position across these supply chains, the sector faced headwinds in 2022.

International prices for lithium and cobalt have doubled since 2020, while those of copper, nickel and aluminium rose by around 25-40%. Prices for battery-grade lithium carbonate in China hit an all-time high of $74,475 per tonne in October, eclipsing the record set one month earlier.

Global giants Siemens and GE have both stated that soaring mineral prices, inflation and supply chain disruptions are hurting profitability.

Several emerging markets invested in these key industries in 2022, including Indonesia, which announced plans in January 2022 to establish a $4bn industry for polysilicon, a key raw material in the production of solar panels.

The demand for solar photovoltaic panel production is set to grow by 150-400% from 2021 to 2030, according to the International Energy Agency’s July report entitled “Securing Clean Energy Technology Supply Chains”.


What are current trends in supply chain distribution? ›

Key Takeaways

Supply chain as a service (SCaaS) providers will see a boom in adoption. Circular supply chains will help turn operations into zero-waste environments. Cloud SCM solutions will continue to grow in popularity. AI, IoT and embedded analytics will grow in popularity and see massive integrations.

What is the future of global supply chains? ›

Traditional supply chains sought to achieve stability and minimize costs. Future supply chains will need to be much more dynamic—and be able to predict, prepare, and respond to rapidly evolving demand and a continually changing product and channel mix. In short, supply chains will need to become agile.

What is happening with global supply chain? ›

The pandemic highlighted how interconnected the world is right now. Multiple bottlenecks have disrupted global supply chains – the networks of people, companies and modes of transport that order and manufacture goods and deliver them to warehouses, shops or even right to our doors.

What are four trends we are seeing in supply chain management? ›

Below, we'll take a look at some of the latest supply chain trends and how they're impacting businesses.
  • Sustainability. ...
  • Circular Supply Chains Over Linear Supply Chains. ...
  • Growth of Supply Chain Integrations. ...
  • Workforce Globalization. ...
  • Increased Demand for SCaaS and SCM Support.
Jul 7, 2022

What are the 5 biggest supply chain issues? ›

Shippers' Top 5 Supply Chain Challenges:
  • Keeping transportation costs down.
  • Keeping up with customer/industry demands.
  • Sourcing consistent, reliable carrier capacity.
  • Keeping up with the latest technology solutions and demands.
  • On-time pickup and delivery performance.
Sep 30, 2022

What are the 5 key trends in supply chain management SCM? ›

New market dynamics are among five trends that IDC said will drive supply chain development over the next decade. In no particular order, they include networks and ecosystems; data analytics and automation; sustainability and the global workforce.

What are the 3 global supply chain issues? ›

the three critical challenges facing global supply chains: labor shortages, equipment availability, and the ripple effect of global bottlenecks.

Is the supply chain Improving 2022? ›

It's been an eventful two years in the supply chain industry. But, while complications still exist as we head into the fall of 2022, we are starting to see easing pressures in shipping and transportation, where things are moving faster and at higher volumes.

What are the four 4 stages of supply chains? ›

What are the components of your supply chain you should be focusing on right now?
  • INTEGRATION. Integration starts at your strategic planning phase and is critical throughout your communications and information sharing and data analysis and storage. ...

Are there still supply chain issues 2022? ›

Geopolitical conflicts, strike threats and weather-related disasters tested supply chains in 2022, adding new headaches for businesses still grappling with the fallout from the pandemic.

What is the most problematic trend in the supply chain? ›

Here are five major challenges that companies continue to face in their supply chains–and the solutions that will help logistics providers prepare for the future.
  • 1 - Huge E-commerce Growth. ...
  • 2 - Sudden Shortages. ...
  • 3 - Centralized Inventory. ...
  • 4 - Limited or Insufficient Visibility. ...
  • 5 - Patchwork Logistics.
May 3, 2022

Will supply chain issues be resolved in 2022? ›

In 2022, you should expect to see an accelerated level of investment as businesses seek to enhance critical supply chain planning capabilities by adopting more advanced digital enablers, such as cognitive planning and AI-driven predictive analyticsm as well as adding greater integrity and visibility into secure supply ...

What are the 7 R's of supply chain? ›

So, what are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.

What are the seven new trends in supply chain technology area? ›

7 Best Supply Chain Technology Trends & Innovations
  • Internet of Things.
  • Artificial Intelligence.
  • Augmented Data Intelligence.
  • Warehouse Automation.
  • Robotics.
  • Last-Mile Delivery.
  • Utilization of Supply Chain Management Software.

What are the top 3 elements of supply chain? ›

Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery). Sometimes logistics is separate, and procurement may be included with Purchasing, depending upon how location specific the procurement activities are.

What are the six 6 major drivers of supply chain performance? ›

Five supply chain drivers, Production, Inventory, Location, Transportation, and Information, influence the performance of the supply chain. Companies can develop and manage these drivers to emphasize the ideal balance between responsiveness and efficiency, depending on your business and financial requirements.

What are the top 3 causes of supply chain disruptions? ›

The following are the typical factors that may create these interruptions:
  • Pandemics. In the previous year, we've seen how the Covid-19 (novel coronavirus) epidemic wreaked havoc on global supply chains across sectors. ...
  • Natural Disasters. ...
  • Logistics Delays and Failures. ...
  • Price Fluctuations. ...
  • Cyberattacks. ...
  • Product Problems.

What are the 3 possible challenges facing supply chain in the next 5 years? ›

The following are 2022's biggest supply chain challenges faced by product-based businesses from all over the globe.
  • Material scarcity. ...
  • Increasing freight prices. ...
  • Difficult demand forecasting. ...
  • Port congestion. ...
  • Changing consumer attitudes. ...
  • Digital transformation. ...
  • Restructuring. ...
  • Inflation.
Mar 17, 2022

What are 4 C's in SCM? ›

Our framework encompasses four main configurations – the communicative, coordinated, collaborative, and co-opetitive – and we refer to these as the 4 C's in supply chain management.

What are the 6 components of the global supply chain? ›

CIO, the business magazine from Boston's International Data group, have identified six core components of good SCM: Planning, Sourcing, Making, Delivering, Returning, and Enabling.

What supply chain challenges will be the biggest issues in 2022? ›

Labor shortages and rising wages continue to be major concerns for driving supply chain challenges and inflationary pressures. The unemployment rate ticked up slightly to 3.7% in October, up from 3.5% in August.

What are the five 5 aspects of supply chain? ›

Supply chain management has five key elements—planning, sourcing raw materials, manufacturing, delivery, and returns.

What things will be in short supply in 2022? ›

Shortages 2022: 5 products expected to be in tight supply this...
  • Semiconductors. Justin Sullivan via Getty Images. ...
  • Aluminum. Justin Sullivan via Getty Images. ...
  • Food products. Alex Wong via Getty Images. ...
  • Plastics. Bill Pugliano via Getty Images. ...
  • Building materials. Scott Barbour via Getty Images.
Jan 31, 2022

Is the global supply chain improving? ›

Global supply chain woes have eased ahead of the holiday season, Flexport founder and co-CEO Ryan Petersen said. Logistics challenges have seen “huge improvement,” he said, as ports are less congested and the cost of shipping goods has fallen significantly this year.

What are current supply chain issues? ›

Global political unrest is the main factor causing current supply chain issues. Business leaders say their current supply chain issues primarily stem from global political unrest (58%), lack of raw materials (44%) and rising fuel and energy costs (40%). Only 31% cited inflation as a major contributor.

What are the 8 key supply chain processes? ›

8 Key Business Processes for a Seamless Supply Chain Management
  • Customer Relationship Management. ...
  • Supplier Relationship Management. ...
  • Customer Service Management. ...
  • Demand Management. ...
  • The Order Fulfilment. ...
  • Manufacturing Flow Management. ...
  • Product Development and Commercialisation. ...
  • Returns Management.
Nov 18, 2022

What are the 3 supply chain strategies? ›

3 supply chain strategies for small businesses
  • Demand-driven supply chain strategy. A demand-driven supply chain focuses on meeting demand from the consumer. ...
  • Agile supply chain strategy. ...
  • Collaborative supply chain strategy.
Jan 21, 2022

What are the 3 main flow of supply chain management? ›

There are three types of main flows that happen in any supply chains: flow of materials/goods, flow of money/cash, and flow of information.

Will supply chains ever go back to normal? ›

Supply chain conditions should stay on a more encouraging trajectory in the final stretch of 2022 and in 2023. One of the benefits of weakening demand is it will ease stress in supply chains,” said Oren Klachkin, Oxford's lead US economist.

What are the 7 key issues of supply chain management? ›

7 Main Challenges in Supply Chain Management And How You Can Workaround It
  • Quality Customer Service. The supply chain management is centralized on the needs of the customers. ...
  • Costing. ...
  • Risk Management. ...
  • Supplier Relationship. ...
  • Qualified Personnel. ...
  • Unforeseen Delays. ...
  • Fast-Changing Markets.
Feb 5, 2019

What are two trends affecting supply chain management? ›

Top 8 Supply Chain Trends for 2023:
  • Rising supply chain and delivery costs.
  • Difficulty in maintaining customer loyalty.
  • Acceptance of managing complex operations.
  • Collaboration between online retailers.
  • Diversification of delivery partners.
  • Digital transformation.
  • Reducing environmental impact.

What shortages are coming in 2023? ›

The WFP predicts that by 2023 there will be a shortage of wheat and corn, which are two staple products in the food supply chain. The reports also estimate that these shortages will increase global food prices and could even trigger a new global recession.

How long will the supply chain shortage last? ›

Analysis from Sea-Intelligence, gauging the amount of bogged-down shipping capacity, shows “all three models suggest we should be back at the 'normal' 2% capacity loss baseline by early 2023.”

What are the 10 elements of supply chain management? ›

What are the 10 Basic Elements of Supply Chain Management?
  • Integration. Every business needs strategic planning for the better functioning of operations. ...
  • Operations. ...
  • Purchasing. ...
  • Distribution. ...
  • Agility. ...
  • Innovation. ...
  • Performance Measurement. ...
  • Alignment.
Jul 8, 2022

What are pillars of supply chain? ›

The three pillars of supply chain management are strategy, service, and cost.

What is one of the current challenges in distribution? ›

In a world of high competition and low margins, this is a difficult time for the distribution industry. Supply chain uncertainties, inventory issues, and rising competition from e-commerce chains such as Amazon have made it hard to compete.

What type of supply chain does KFC use? ›

The supply of logistics model based on DRP KFC supply process is: The restaurant will be reported to branch distribution center order demand, the latter after an order to the supplier, the supplier delivery to the distribution center, distribution center under the line delivery.

What are the 4 levels of distribution? ›

Distribution channels include wholesalers, retailers, distributors, and the Internet. In a direct distribution channel, the manufacturer sells directly to the consumer. Indirect channels involve multiple intermediaries before the product ends up in the hands of the consumer.

What are the 4 chains of distribution? ›

There are four types of distribution channels that exist: direct selling, selling through intermediaries, dual distribution, and reverse logistics channels. Each of these channels consist of institutions whose goal is to manage the transaction and physical exchange of products.

What are the main supply chain challenges? ›

The following are 2022's biggest supply chain challenges faced by product-based businesses from all over the globe.
  • Material scarcity. ...
  • Increasing freight prices. ...
  • Difficult demand forecasting. ...
  • Port congestion. ...
  • Changing consumer attitudes. ...
  • Digital transformation. ...
  • Restructuring. ...
  • Inflation.
Mar 17, 2022

What are the four main factors that influence distribution? ›

Factors Influencing Choice of Distribution Channel – 5 Important Factors: Product, Company, Competitive, Market and Environment Related Factors. Deciding or selecting channels of distribution is a strategic decision for any manufacturing or trading concern.

What are the three critical distribution problems? ›

Distribution channels are formed to solve three critical distribution problems: functional performance, reduced complexity, and specialization.

What are the biggest challenges in supply chain 2022? ›

Driver shortages, logistics provider capacity issues, inflation, shipping delays, increased freight costs, depleted inventory levels, labour shortages and demand peaks are driving discussions and require attention.


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