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The COVID-19 pandemic continues to shape prospects for emerging markets and global supply chains in 2022, according to the Agility Emerging Markets Logistics Index 2022 report
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Around two-thirds of survey respondents expect record freight rates to return closer to historical levels during 2022, while 80% see supply chain congestion unwinding
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The Gulf states have built the most dynamic and robust business environments among emerging markets
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Vast populations, domestic production capabilities and online retail development see China, India and Indonesia top the domestic logistics opportunities ranking
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The sophisticated and well-connected export markets of China, India and Mexico are the strongest emerging markets for international logistics opportunities
China has come out on top of the annual Agility Emerging Markets Logistics Index 2022, with eight of the 10 ranking positions occupied by emerging markets from Asia-Pacific and the Gulf states.
The index, published by transport and logistics analyst Transport Intelligence (Ti) and supply chain service provider and investor Agility, ranks the world’s 50 top emerging markets by logistics infrastructure, business conditions and digital readiness.
The research examines the competitiveness of emerging market countries and compares them in ways that are useful to shippers, carriers, distributors and others in the supply chain.
“All 50 of the countries in the Index are competing for foreign investment. All are striving to expand their middle classes. All want to join the knowledge economy and become indispensable as suppliers, markets and innovators. The pandemic can’t change that,” said the report.
Global supply chains were characterized by bottlenecks, capacity constraints and sky-high freight rates in 2021 as retailers, manufacturers and logistics service providers battled the ongoing impacts of the Covid-19 pandemic.
Among the report’s key findings are:
- The COVID-19 pandemic continues to shape prospects for emerging markets and global supply chains in 2022;
- An accelerated shift to online retail, digitalization and sustainability will be the legacy of the Covid-19 pandemic;
- Global economic prospects in 2022 are good, but supply chain challenges will remain;
- Digital readiness requires connectedness, compatibility and culture; and
- Asia Pacific and Gulf states dominate
“The pandemic and its effects continue to shape the results of the Agility Emerging Markets Logistics Index in 2022. The results not only highlights the countries which have most successfully dealt with the pandemic but also brings into sharp relief the reality that for many countries the pandemic stills dictates social and economic opportunities in 2022,” the report said.
The industry professionals surveyed for the 2022 index offered a broadly positive outlook for the year ahead, despite the challenges.
Around two-thirds of respondents expect record freight rates to return closer to historical levels during 2022, while 80% see supply chain congestion unwinding.
Uncertainty over the strength of the global recovery remains, with more than one-third of respondents saying a global recession in 2022 is “likely” or “certain,” while the Middle East and North Africa, Central Asia, South America and Sub-Saharan Africa regions are all unlikely to see growth in 2022.
The report shows that Asia-Pacific’s emerging markets offer the strongest domestic and international logistics opportunities, although results see the region’s domestic logistics markets leadership erode.
The Gulf states have built dynamic and robust business environments which not only lead emerging markets but increasingly chase global best practices.
Online retail, the adoption of technology digital business practices and investment in sustainable energy resources see both regions’ emerging markets share digital readiness leadership.
Vast populations, domestic production capabilities and online retail development see China, India and Indonesia top the domestic logistics opportunities ranking.
The sophisticated and well-connected export markets of China, India and Mexico are the strongest emerging markets for international logistics opportunities.
The United Arab Emirates (UAE), Malaysia and Saudi Arabia top the business fundamentals ranking, a measure that is increasingly dominated by the Gulf States. Along with the UAE and Saudi Arabia, Qatar, Bahrain and Oman rank in the top 10, with Kuwait in twelfth.
The UAE tops the first-ever digital readiness ranking, which measures all 50 emerging markets by their adaptability and preparedness of the digitally driven and sustainable post-pandemic global economy. The rest of the Top 10 are Malaysia, China, Saudi Arabia, India, Thailand, Qatar, Indonesia, Chile and the Philippines.
Overall topnotchers
China and India maintain their positions at the top of the Index, ranking first and second overall.
Rounding out the top 10 overall ranking of emerging logistics markets were UAE, Malaysia, Indonesia, Saudi Arabia, Qatar, Thailand, Mexico and Turkey. Vietnam fell from eighth in 2021 to 11th overall.
But while China and India lead the Index, the Gulf States and Southeast Asian markets provide an ever stronger push for growth, said the report.
As the leader, China remains indispensable to the global supply chain, its position as one of the world’s most important logistics markets matched with its position as one of the world’s most promising in terms of future development, said the report.
The world’s second largest economy ranks as the top-performing emerging market for domestic and international logistics opportunities, although its business fundamentals ranking slips two positions. The country is third in the new digital readiness ranking.
The rapid development of China’s e-commerce market also contributes to its overall performance. Revenue from online merchandise retail is expected to top US$1.5 trillion in 2022, helping to drive a domestic express market that Ti values at more than $90 billion.
India ranks second overall in 2022 following a year that saw it rebound from the effects of the Covid-19 pandemic disruption at the macroeconomic level.
The UAE ranks third overall with its top-ranking performance in both the business fundamentals and digital readiness categories. The Emirates combines these significant strengths with top five rankings in both domestic and international logistics opportunities.
Malaysia’s fourth overall position in the Agility Emerging Markets Logistics Index 2022 comes as it recorded strong performance in both the business fundamentals and digital readiness rankings.
Indonesia’s fifth overall rank in the 2022 Agility Emerging Markets Logistics Index is driven by top 10 performance in the domestic and international logistics opportunities categories, as well as in the new digital readiness ranking.
Photo by Marcin Jozwiak on Unsplash
