Media coverage of the World Economic Forum’s Annual Meeting in Davos is often confined to soundbites from world leaders and journalists’ efforts to capture the prevailing mood of the business world. This is the tip of a very big iceberg which this year comprised 480 sessions on a vast array of subjects. Here’s a brief summary of some of the event’s logistics and supply chain content.
De-globalisation has become a perennial issue at Davos, with widely divergent views on whether it is actually happening, what is causing it and how far it might go. Some trade specialists see it as a long-term restructuring of supply chains that had over-reached themselves and become too vulnerable. For others it is a short-term reaction to a series of shocks, collectively known as the ‘polycrisis’, that have happened to coincide. Global logistics providers at Davos in search of advice on future market trends had to navigate a broad range of opinions and projections.
Cyber threats to supply chains were explored in a session I moderated. According to the latest BCI survey, cyber attacks and data breaches will pose the greatest risk to supply chains over the next 5 years. The digitalisation of logistics processes is exposing them to greater risk at a time when ransomware attacks have been increasing exponentially. Couple this with legacy computing systems, failures to ‘patch’ against viruses and widespread cyber complacency and you get a sense of big trouble ahead.
A common theme of Davos 2023 was the need to accelerate industry-level initiatives to address a series of mega-challenges, particularly climate change. One such initiative is the First Movers Coalition, an alliance of around 70 large businesses committed to use the ‘power of procurement’ to hasten the uptake of green technologies and renewable energy in ‘hard-to-abate’ sectors, including shipping, aviation and trucking. At one session, in the company of US Climate Envoy John Kerry, we heard how FMC member Volvo Trucks is purchasing lower-carbon materials to cut the ‘embodied’ CO2 in its new generation of electric vehicles.
Another hot topic was the measurement of Scope 3 emissions from upstream supply chains, particularly in sectors, such as electronics and automotive, where they average roughly 80% of companies’ total emissions. Despite the development of online tools for the collection, sharing and reporting of this emission data, such as Siemen’s SiGREEN platform, creating the necessary carbon visibility across highly-fragmented, multi-tier supply chains remains a very daunting task.
The port sector had quite a high profile at Davos. DP World, for example, participated in several trade-related sessions and had an impressive off-site pavilion. The port of Antwerp also outlined its ‘net-zero’ plans’ for bunkering and supplying the ‘green molecules and electrons’ needed to power low-carbon shipping but also becoming a conduit for sequestered CO2 destined for off-shore geological storage under the North Sea.
Dealing effectively with all these logistics challenges will require the recruitment, retention and reskilling of much more supply chain ‘talent’, a view expressed in several Davos sessions and one that I enthusiastically endorsed in a panel discussion.
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