Deficiency in transport and communications infrastructure is
one of several supply chain barriers that act as obstacles for speeding up
global economic growth, according to a recently released report by the World
Economic Forum.
The report, entitled “Enabling
Trade: Valuing Growth Opportunities,” was prepared by the World Economic
Forum in collaboration with Bain & Co. a Boston-based global management
consulting firm.
The report was made public Jan. 23 at the opening of the 11th
annual World Economic Forum in Davos, Switzerland. The forum is a gathering of
the world’s political and business leadership.
The report highlights a variety of identified supply chain
barriers – ranging from poor physical and technical infrastructure to border
controls, customs paperwork, lack of coordination between national agencies and
regulations favoring local products over imported ones.
“This report makes clear that transportation infrastructure investment
can have a very positive and immediate impact on trade growth and economic and
social development, particularly in emerging market areas,” noted APM Terminals
CEO Kim Fejfer, who took part in the forum, which was held Jan. 23 to 27.
AP Moller-Maersk, the parent company of APM Terminals, is an
active participant in the World Economic Forum group that prepared the report.
The WEF study estimates that global trade would increase by
an estimated $1.6 trillion, or 15 percent, while global GDP would rise by $2.6
trillion, or roughly five percent, if every country improved two key supply
chain barriers just halfway to the world’s best practices: improving inadequate
infrastructure and adopting modern communications technology such as electronic
freight releases, and by streamlining and simplifying border administration
procedures.
“Addressing infrastructure requirements to facilitate global
market access is a relatively straightforward process when strong local
partnerships can be forged,” Fejfer said. “We share a common interest in
creating modern port and inland transportation facilities so local communities
can benefit from trade-driven development.”
The study’s authors examined the effects of trade barriers by
contacting about 90 internationally active companies representing combined annual
revenue of $800 billion. Of these companies, 35 provided input, with 21 of
these participating in preparing 18 case studies representative of major industries,
barriers and supply chain functions.
The telecom and transport infrastructure components were
defined by the report’s authors as the availability and quality of transport
infrastructure; the availability and quality of transport services; and the
availability and use of information and communication technologies.
Increased operational costs, increased demands on investment
and working capital, and cargo delivery delays were found to be the consequences
of inadequate infrastructure, discouraging individual company trade growth and
participation.
The report’s executive summary can be read or downloaded at:
http://www3.weforum.org/docs/WEF_SCT_EnablingTrade_ExecutiveSummary_2013.pdf.
The full report is at:
