Trade activity across transport and logistics supply chains grew 10 percent in the fourth quarter of 2020, according to new data.
Tradeshift’s Index of Global Trade Health points to a significant recovery in global supply chain activity. Overall transaction volumes across the sector finished the year up 2.9 percent from pre-Covid-19 levels compared to an overall decline of 3.4 percent globally.
Technology and manufacturing sectors were up by more than 16 percent each. Digitized invoicing and retail ordering led the way in Q4, with transaction growth of 34 percent. In a roller-coaster year for the sector, transaction activity had dropped by as much 36 percent in Q2.
The latest data also show strong order books among buyers in almost every region, suggesting news of a vaccine roll-out in December prompted organizations to press ahead with purchasing decisions that may have previously been delayed or cancelled.
“Modern supply chains are built like high-performance vehicles,” said Christian Lanng, CEO of Tradeshift. “Asking them to navigate the kind of unpredictable environment we saw in 2020 is the equivalent of driving a Formula One car over a series of speed bumps. Conditions are certainly improving, but supply chains are bearing the scars from such a prolonged period of volatility”
U.K. losing ground
While business confidence appears to be improving, Tradeshift data shows that U.K. trade activity continued to struggle in Q4. Transaction volumes across the region grew just seven percent quarter-on-quarter and remained well below the levels seen before the pandemic. The combination of a significant drop in activity during Q2 and a weak recovery meant that U.K. trade activity finished the year 36 percent below the pre-pandemic level in March 2020.
Trade activity in Western economies has only recently shown signs of returning to growth, but Tradeshift’s data show businesses in China have been operating at near-normal capacity since April 2020. Cumulative transaction volume growth since Q2 stood at 118 percent at the end of 2020 compared to an overall activity drop of 3.4 percent globally during the same period.