UNCTAD: Fragile Logistics Threatens Sustainable Development

Trade disruptions have become commonplace across the globe, but often the biggest hits are taken by developing nations. 

It's why ministers participating in the 16th UN Conference on Trade and Development (UNCTAD16) have called for a coordinated investment in more sustainable logistics networks. 

Overcoming disruption

Ministers at UNCTAD16 warned that many supply chains are close to breaking point. If nothing changes, inequality in global supply chains will likely deepen and recent progress could stall.

With logistics networks fragile amid ongoing instability and shifting regulations, trade is increasingly at risk. Sustainable development is under threat as key trade arteries grow more congested and bottlenecks more frequent.

To avoid unstable routes, maritime shipments are constantly being rerouted, extending journey times even as overall volumes fall.

Rebeca Grynspan, UNCTAD Secretary-General, said: "A ship that once crossed the Red Sea in days now sails for weeks around the Cape of Good Hope.

“These are not just logistics challenges – they are development challenges.”

Supply chain diversification 

Small island and landlocked developing countries are facing the most disruption. Amid economic uncertainty and rising fuel costs, inflation in small island states is growing five times faster than the global average rate. 

As key locations grow volatile, shipping is diverted onto longer journeys, increasing fuel use and emissions.

Despite a push for cleaner fuels, around 90% of the world’s active fleet still runs on conventional fossil fuels, driving high CO2 output.

Rebeca is calling for zero-carbon shipping, supported by sustainable fuels, digital trade systems to mitigate risk and optimise rerouting, and more resilient transport corridors that include every country and reduce bottlenecks.

“Supply chains are not just ships and cargo," she stated. “They are also the 1.9 million seafarers who keep trade moving, the ports that need climate resilience and the corridors linking landlocked countries to the world.”

Diversifying trade routes and fuel sources strengthens supply chain resilience by providing alternative options amid uncertainty.

Relying on a single fuel leaves shipping firms exposed and worsens environmental impact.

By broadening supplier bases, companies reduce risk and support suppliers.

Building resilience

This year has shown how a single disruption can cascade into wider problems.

Volatility is showing little to no sign of easing, exposing businesses worldwide to upheaval. Over the past 12 months, logistics companies have moved to strengthen resilience and transform supply chains.

"These challenges are not the exception – they are here to stay," said Saleh bin Nasser Al-Jasser, Saudi Arabia’s Minister of Transport and Logistics Services.

“We have to be ready to live with them and overcome them as they arise.”

He said Saudi Arabia is investing in digitalisation, connectivity and infrastructure to maintain trade resilience.

Businesses and countries that adapt to current volatility to safeguard their future supply chains will build long-term strength and better management.

Some leaders are forming partnerships to bolster resilience for smaller states and developing countries.

“No one nation can build its own resilience through external aid alone,” states Moustoifa Hassani Mohamed, Minister of Economy, Industry and Investments of the Comoros.

“Partnership remains important for us, but resilience begins through a clear national vision that would help us to grow our economy.”

Forming alliances makes shared regulations more accessible.

This benefits smaller countries and those that depend on smooth maritime trade. As relationships deepen across supply chains, every country gains.

Collaboration adds new value, enables fresh solutions and strengthens supply chains. By sharing prosperity, networks become more resilient and efficient.

The result is greater innovation, wider resource sharing, reduced inequality and improved sustainability. For this to happen, countries must be willing to reach out and share resources.