Worldwide supply chain stabilising as Omicron rages

Fresh data from IT company Tradeshift suggests that global transaction volumes between buyers and suppliers are increasing & stabilising, despite Omicron

New data from Tradeshift has shown that global transaction volumes between buyers and suppliers are increasing and displaying signs of stabilisation. 

Yet it is likely that more disruption will occur in the future, with the Ukraine-Russian war as well as a slowdown across Chinese supply chains.

IT company Tradeshift was founded in 2009, San Francisco, California, and has been keenly observing the supply chain disruption over the past two years.  

 

Supply chain recovery continues

Tradeshift’s Q4 2021 Index of Global Trade Health shows that the recovery in activity for supply chains in the USA continues to track at a higher level than anywhere else in the world. 

“Momentum dipped slightly in Q4, falling one point compared to the previous quarter, but an index score of 97 (against a baseline of 100) for the period means the cumulative growth in activity since the pandemic sits just 3 points below the pre-pandemic forecast,” the company said. “Spiking cases of the Omicron variant tempered the overall momentum across global supply chains, but the impact has been generally far less severe than during previous waves. Total growth in global transaction volumes during Q4 remained level with the previous quarter, finishing the year with an index score of 75.”

 

Supply chains are growing back stronger

“We saw a massive spike in orders in the second quarter of 2021 and that should have triggered a glut of invoices from suppliers at the end of the year,” said Christian Lanng,  co-founder and CEO of Tradeshift. “We’re seeing some early signs that the pressure on supply chains is starting to ease, but if invoice volumes continue to follow the current trajectory, then it could be at least a year before we see order backlogs fully subside.

“China’s decisive action early on in the pandemic enabled local supply chains to get back up and running before the end of the world, but the same strict policies now seem to be having the opposite effect. A spate of lockdowns in key industrial regions across China could trigger more shortages of crucial manufacturing components and extended order backlogs in international markets.”

 

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