As rising costs, sluggish demand, and supply chain disruptions continue to impact their firm, top logistics executives are pessimistic about the prospects for this year, with nearly 70% of them stating they are preparing for an economic recession.
According to Kuwait’s Agility’s global poll of 750 experts, nearly half (45.1%) and 23.3% of the participants believe that a recession will occur this year.
Operators in the sector, such as transporters and shippers of consumer goods and cargoes, have recently been affected by the inflation brought on by Russia’s war in Ukraine. Business input costs have increased due to the conflict, but revenue has decreased.
“Carriers and shippers feel the effects of higher energy prices, tight labor markets, and broader inflation. Three years after the pandemic’s start, supply chains still have a lot of volatility. Now there’s uncertainty as consumers and businesses pull back on spending and hiring,” said Tarek Sultan, Agility Vice Chairman.
Most CEOs surveyed (96.3%) claimed that the conflict in Ukraine had affected their company. Almost a third (28.6%) claimed that logistical costs have gone up, and another third (29.8%) claimed that company costs—including those for raw materials and energy—had increased.
While 14.7% reported a drop in income, 23% stated they were still suffering from supply chain problems. When asked what they may do to address “spiking” energy prices over the next 12 months, 10.4% aim to reduce labor costs, while 23.3% stated they might raise pricing.
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