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Supply shortages adding to inflationary pressure

Supply shortages adding to inflationary pressure

Supply shortages will increase inflationary pressure this year and such shortages are unlikely to clear until 2023, according to DP World.
The company commissioned a report that showed that 29% of companies that export are concerned about the risk of rising inflation due to supply chain disruption and 30% of companies expect increasing transport costs to limit export-led growth in 2022, also leading to higher inflation.

The study also showed that just-in-time shipping, once the domain of agile supply chains, is now fading with more than a quarter of companies holding onto stock for three months.

To cope with the pandemic and ease inflationary pressures, companies are also changing their strategic outlook. 48% now said diversifying their supplier base is their primary reconfiguration strategy, with efforts focussed on sourcing raw materials (24%) and managing shipping lines and logistics (21%). The highest cited reason for optimism for global trade was the growth of technology to ease supply chain issues, particularly the adoption of 5G to increase connectivity.

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