North American Firms See Tech as Silver Lining in 2024 Business Forecast

New technology, particularly AI, is fuelling optimism in North American firms, though executives remain cautious, according to new research from Economist Impact and DP World.

Despite geopolitical uncertainty and economic challenges, North American businesses are not just surviving, but thriving, according to compelling new research from Economist Impact and DP World. Their secret? A bold embrace of technology, including Artificial Intelligence (AI), to reconfigure their supply chains.

According to the 2024 Trade in Transition study, a growing belief that technology will transform the efficiency and resilience of supply chains in tandem with agile trade strategies is the primary driver of optimism for 2024. With rising concerns of political instability, inflation, and a downturn in key markets, businesses in North America are actively reconsidering risks by deploying AI-based tech, and dual logistic strategies.

The annual Trade in Transition study, commissioned by DP World and led by Economist Impact, captures the perspectives of trade experts and senior executives globally. This year’s report is the fourth edition.

2023 was a pivotal year in supply chain innovation, as technology continues to drive optimism for 2024.

The global survey found that when asked to assess the future of global trade, one-third of North American business leaders pointed to technologies that improve supply chain efficacy and resilience as their main source of optimism. Other key highlights of the Trade in Transition study include:

• Widespread adoption of AI: 97% of executives are using AI to revolutionise at least one aspect of their supply chain operations, from solving inventory management issues to reducing trade expenses.
• Future technologies: In the coming year, businesses plan to incorporate advanced automation (28%), augmented or virtual reality (27%), 3D printing and blockchain technology (26% and 25% respectively) to enhance efficiency, traceability, security and data protection.
• Strategic supply chain adaptation: North American businesses are strategically navigating heightened risks by nearshoring, establishing parallel supply chains and expanding into neutral markets. Increasingly, companies are reconfiguring their supply chain by working with fewer suppliers – a strategy up by 160% over last year’s report.
• Consolidation trend: Over a quarter of businesses are opting for fewer suppliers, marking a 160% increase from the previous year. This trend towards consolidation is driven by a desire to reduce supply disruptions, even as businesses grapple with the trade-offs between diversification and control, and risk management.
• Trade hurdles in 2024: Businesses face significant challenges in exporting and importing due to transport expenses (26%), shortages of vital production inputs (22%), and concerns about rising inflation and economic unpredictability (27%). Uncertainties surrounding tariffs also remain a substantial concern, with 20% expressing apprehension regarding exports and 21% concerning imports.

Brian Enright, CEO & Managing Director, DP World Americas, said: “Businesses are inherently cautious amidst ongoing economic pressures, especially given heightened geopolitical tensions. The intricate dynamics of globalization and the broader landscape are reshaping global trade. There is a growing conviction that technology integration, coupled with agile supply chain strategies, has the potential to revolutionize the efficiency and resilience of supply chains, enabling businesses to adapt more quickly and seamlessly. Our commitment to innovation will enhance the vital connectivity, efficiency, and adaptability needed by businesses."

To view the full report, please click here.

About Economist Impact

Economist Impact combines the rigour of a think-tank with the creativity of a media brand to engage an influential global audience. We partner with corporations, foundations, NGOs and governments across big themes including sustainability, health and the changing shape of globalisation to catalyse change and enable progress. Learn more: impact.economist.com.

About Trade in Transition

This is the fourth edition of the Trade in Transition report commissioned by DP World and led by Economist Impact. It is a global survey that retrieves data from over 3,500 executives, examining private sector sentiment on international trade and supply chains. More specifically it looks at how factors such as geopolitics, climate change and technology impact trade and supply chains.

Trade in Transition looks into regional (North America, South America, Europe, Middle East, Africa, and Asia-Pacific) and sectoral data (FMCG, industrial, consumer goods, food-and-drink, energy-and-natural resources, health and pharma, and logistics and distribution) to compare and contrast priorities in international trade. Learn more: economistimpact.com/trade-in-transition/

About DP World

Trade is the lifeblood of the global economy, creating opportunities and improving the quality of life for people around the world. DP World exists to make the world’s trade flow better, changing what’s possible for the customers and communities we serve globally.

With a dedicated, diverse and professional team of more than 106,500 employees from 158 nationalities, spanning 73 countries on six continents, DP World is pushing trade further and faster towards a seamless supply chain that’s fit for the future.

We’re rapidly transforming and integrating our businesses -- Ports and Terminals, Marine Services, Logistics and Technology – and uniting our global infrastructure with local expertise to create stronger, more efficient end-to-end supply chain solutions that can change the way the world trades.

What's more, we're reshaping the future by investing in innovation. From intelligent delivery systems to automated warehouse stacking, we’re at the cutting edge of disruptive technology, pushing the sector towards better ways to trade, minimising disruptions from the factory floor to the customer’s door.

WE MAKE TRADE FLOW

TO CHANGE WHAT'S POSSIBLE FOR EVERYONE.

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