Supply Chain Execs Express Protectionism Concerns

More than 80 percent of supply chain managers polled at manufacturing companies involved in international trade, expressed concern that growing protectionism could sink the world into a global depression, according to BDP International. Respondents also feared that the current economic downturn could result in a prolonged reversal of world trade. On a somewhat brighter note, three-quarters of them believed the recession would not last more than another 12 months.

The survey was conducted between March 23 and March 31 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 percent response rate.

The study was structured to provide for respondents’ anonymity. The respondents represented the chemical (62.1 percent ), diversified industrial (12.1 percent ) and consumer/retail (10.3 percent ) industries, and were based in North America (39.7 percent ), Europe (31 percent ) and Asia/Pacific (24 percent ). Nearly 70 percent represented companies with more than US$10 million in annual revenues.

"With supply chain professionals on the front lines of international trade experiencing the impact of the global recession and growing protectionism, the timing was right to learn how they are aligning their priorities to manage the crisis," said Richard Bolte, Jr, president and CEO of BDP International. "The fact that 17 G20 members and other countries have implemented nearly 50 measures restricting trade since last November has dramatic implications for global supply chains.”

Significantly, 84.2 percent of the respondents agreed that a rise in protectionism could turn a global recession into a global depression, with 60.3 percent agreeing that it will cause a collapse of globalization. In terms of its impact on their own companies, 20.7 percent said it would result in a significant reduction in export activity and an even deeper slowdown in business. And 17.2 percent, primarily North American respondents (26.1 percent), see protectionism contributing to an increase in the cost of materials sourcing.

In addition, nearly half (47.3 percent ) said their companies are placing greater emphasis on near-sourcing to reduce supply chain costs. This appears to correlate with their concern over reverse globalization, volatile fuel costs, reducing their carbon footprint and other factors such as supply chain security and regulatory compliance.

BDP International, www.bdpinternational.com