Global logistics executives, still worried about a recession, say they are battling higher costs, reducing dependence on sourcing from China, and planning to boost investment in Africa despite seeing emerging markets investment overall as somewhat riskier.

The 2024 Agility Emerging Markets Logistics Index —  which surveyed 830 industry professionals — found that half of these respondents expect a global recession in the coming year, down from nearly 70% a year ago.

The Agility survey noted that more than 63% of respondents say their companies continue overhauling supply chains by spreading production to multiple locations or relocating it to home markets and nearby countries.

China, the world's leading producer, stands to be most affected, with 37.4% of industry professionals saying they plan to move production/sourcing out of China or reduce investment there.

"Shippers and carriers are struggling to minimize supply chain risk and find new growth opportunities. Inflation and recession risks have eased, but the industry is still living with the aftershocks of the COVID pandemic," said Tarek Sultan, vice chairman of Agility.

"At the same time, businesses are worried about geopolitics — troubled trade relations between China and the U.S. and Europe, and the thicket of sanctions against a growing number of countries," he added.

The report noted a move towards supply chain restructuring — with India, Europe, and North America ranking ahead of China as destinations executives expect to move production to in 2024 and onwards.

It also found that 40% of businesses expect to be less reliant on China in five years, with the leading factors in decisions to de-risk in China including the difficulty of doing business, US-China trade fiction, a slowing economy, and the harshness of China's COVID restrictions.

India – many see India growing in importance as a producer and market but cite inadequate infrastructure and corruption as the biggest obstacles there.

Increased Africa investment

Meantime, the report said the industry is gearing up for a surge in Africa investment.

It added that nearly 62% of professionals say their companies are planning additional or first-time investments in Africa vs. only about 7% exiting or scaling back there.

China and India, the world's two largest countries, held their spots at No. 1 and 2 in the overall rankings.

Meanwhile, UAE, Malaysia, Indonesia, Saudi Arabia, Qatar, Vietnam, Mexico, and Thailand  rounded out the top 10.

The report said No. 24 South Africa and 25 Kenya were highest among countries in Sub-Saharan Africa.

"Three of the four countries offering the best emerging markets business conditions are situated in the Arabian Gulf: UAE (1), Saudi Arabia (3) and Qatar (4). Malaysia (2) and Jordan (5) both moved up in the business fundamentals rankings," the index added.

China and India were tops for domestic and international logistics.

In digital readiness, China jumped three spots to No. 1, followed by UAE, Malaysia and Qatar. India fell from the top spot a year ago to No. 5 this year.

Outside of the top 10, many of the biggest swings in year-to-year rankings involved countries experiencing conflict, facing international economic sanctions, or suffering from chronic economic instability. Among them: are Ukraine, Russia, Iran, Ethiopia, Argentina, Lebanon, and Tunisia.

"Supply chain managers are still coming to terms with the political and economic instability characterising the post-COVID global economy. Geopolitical relationships are changing rapidly, and this is having a major impact on international trade and risk profiles," said John Manners-Bell, chief executive of Transport Intelligence (Ti).

"Businesses need to be alive to the opportunities and threats that exist in emerging markets and use data, such as the Agility Emerging Market Logistics Index, to inform agile decision-making," he added.

Ti is a leading analysis and research firm for the logistics industry and has compiled the Index since it was launched in 2009.

The survey and Index are Agility's 15th annual snapshot of industry sentiment and ranking of the world's 50 leading emerging markets.

The Index ranks countries for overall competitiveness based on their logistics strengths, business climates and digital readiness — factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.

The report noted that shipping and logistics costs that soared during the COVID pandemic and its aftermath are still climbing, but at a slower rate, the survey found.

It added that one-way shippers expect to cope is by the increasing use of digital freight forwarding from 37.8% today to 52% in five years.