Protectionism Concerns Supply Chain Executives

April 22, 2009
Negatives and positives are expressed by supply chain managers who responded to a survey recently conducted by BDP International.

One negative attitude expressed by more than 80% of managers at manufacturing companies involved in international trade was that growing protectionism could sink the world into a global depression.

A second thought is that if prolonged, the current economic downturn could result in a prolonged reversal of world trade. Looking for some light in the survey? More than 75% of respondents thought that the current recession won’t last longer than 12 months.

Respondents are greatly concerned with reverse globalization, volatile fuel costs, reducing their carbon footprint and other factors such as supply chain security and regulatory compliance. As a result, some 47.3% said their companies are placing greater emphasis on near-sourcing to reduce supply chain costs.

Respondents were in the chemical (62.1%), diversified industrial (12.1%) and consumer/retail (10.3%) industries, and were based in North America (39.7%), Europe (31%) and Asia/Pacific (24%). Nearly 70% represented companies with more than $10 million in annual revenues. The survey was conducted via an on-line questionnaire, which was distributed to a sample population of 596 supply chain/logistics executives, 58 of whom responded for a statistically valid 9.7% response rate. The study was structured to provide for respondents' anonymity.

In a news release, BDP noted that, “Respondents' biggest near-term priority with regard to sourcing, logistics and supply chain practices was cost-based selection of transportation modes among rail, barge and truck for domestic transport, and ocean and air carriers for global transport (81%). Renegotiation of transportation contracts, signed as recently as several months ago and no longer reflective of current supply- and-demand conditions, was also a near term priority (57%). In terms of both near- and long-term priorities, more than 60% of the respondents said their companies are placing greater emphasis on supply chain visibility, indicative of their need to further optimize these networks to reduce spend, and gain greater control over their transportation and logistics activities.”