Here's how global supply chains will change after COVID-19
https://www.weforum.org/platforms/covid-...-after-covid-19
Containers are seen at Yantian port in Shenzhen, Guangdong province, China July 4, 2019. Picture taken July 4, 2019. REUTERS/Stringer ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. CHINA OUT. - RC1471296020
The coronavirus pandemic is fundamentally reshaping global trade.
Image: REUTERS/Stringer
06 May 2020

Jesse Lin
Project Specialist, Digital Trade, World Economic Forum LLC
Christian Lanng
Chief Executive Officer, Chairman and Co-Founder, Tradeshift

• The coronavirus crisis has revealed the fragility of the modern supply chain.

• Recent data shows the devastating economic impact as week-on-week trade in China, the US and Europe halved because of the crisis.

• Diverse sourcing and digitization will be the key to building stronger, smarter supply chains and ensuring a lasting recovery.

The COVID-19 pandemic has hit global trade and investment at an unprecedented speed and scale. Multinational companies faced an initial supply shock, then a demand shock as more and more countries ordered people to stay at home. Governments, businesses and individual consumers suddenly struggled to procure basic products and materials, and were forced to confront the fragility of the modern supply chain. The urgent need to design smarter, stronger and more diverse supply chains has been one of the main lessons of this crisis.

What the data tells us

Recent data from Tradeshift, a global platform for supply chain management, reveals the magnitude of the impact on trade and demand. It suggests the effects of the initial shock may continue to linger for the coming months. In China, domestic and international trade transactions suffered a week-on-week drop of 56% beginning mid-February. The United States, United Kingdom, and Europe followed suit, with a combined initial drop of 26% in the beginning of April, and a continuing decline of 17% in late April.

Furthermore, trade has flatlined in every region affected by the lockdown. Overall weekly transactions on the Tradeshift platform since March 9th are down by an average of 9.8%, compared to pre-lockdown figures, with a pronounced decline in invoices and orders since the end of March.

Week-by-week transaction volume

Two side effects of the contractions in global trade have emerged. One is that it takes longer to settle an invoice, reversing a previous trend of faster payments. According to Tradeshift’s data, businesses took an average of 36.7 days to settle an invoice in 2019, compared to 36.8 days in 2018. In the first quarter of 2020, average payment terms have risen 1.7% to 37.4 days.

Secondly, the lack of orders going through the supply chain is building up to another tidal wave with new orders slowing and invoices dropping off. Average weekly order volumes on the Tradeshift platform have dropped by 15.9% since March 9th. Invoices have dropped by 16.7% during the same period. So far, businesses are still receiving money from orders placed before the lockdown, but those are drying up. The coming months could be very difficult for suppliers globally.-- excerpt, rest at link above --

HT @mimi2020

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Healthcare is the biggest exposure?

I have seen very few new cars sitting on lots.

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