Mark Millar, Managing Partner, Book Author of Global Supply Chain Ecosystems, M Power Associates

https://www.mpowerassociates.com
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Mark Millar

Uncertainty is the only thing we can be certain about for 2017.

Following millions of people voicing their views via the ballot boxes, the new year will see the unfolding of Britain’s exit from the EU and Donald Trump becoming president of the United States.

Undoubtedly, there will be repercussions for trade flows — with consequential impact on freight movements, logistics networks, and supply chain ecosystems. Exactly how, what, where, and when is difficult to predict, but the new world order seems to be one of anti-globalization and increasing protectionism. US consumers will inevitably face increased prices for everyday goods — whether via punitive import tariffs or by the on-shoring of production into a higher cost environment.

It’s now safe to assume the Trans Pacific Partnership is pretty much dead in the water, and that the Transatlantic Trade and Investment Partnership (TTIP) is probably not going to take off.

Nevertheless, the growth story in the East — now widely becoming recognized as “The Asia Century” — will continue, with China likely to take the lead in multilateral preferential trade agreements, specifically the 16-nation Regional Comprehensive Economic Partnership, which embraces almost half the world’s population.

Irrespective of how these protracted negotiations pan out in the medium term, during 2017 there will definitely be changes in trade flows and the related movement of goods. Following the trend beyond globalization toward more regional supply chains, I expect for both air and ocean freight, we will see less intercontinental freight flows and more intraregional cargo movements, with the logistics sector having to adjust capacity, footprints and resources accordingly.

However, one trend that is certain for 2017 is that we will see further exponential growth in the e-commerce frenzy — with all its ramifications for retail supply chains and last-mile delivery networks. 2017 could well be the year when Alibaba gross revenue surpasses that of Wal-Mart.