• Supply chain professionals rank India, China as 1, 2
India has the greatest potential among emerging markets, according to a survey of logistics professionals for the 11th annual Agility Emerging Markets Logistics Index. In the survey of 780 logistics executives, India, China, Vietnam, Brazil and Indonesia rank as the countries with greatest potential as logistics markets.
In the overall Index, a broad gauge of competitiveness, India finished No. 2, behind China in the 50-country Index, which uses data to rank countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors. After India, the top countries were United Arab Emirates, Indonesia, Malaysia, Saudi Arabia, Qatar, Mexico, Thailand and Turkey.
China, India and Indonesia rank highest for domestic logistics; China, India and Mexico are top for international logistics; and UAE, Malaysia and Saudi Arabia have the best business fundamentals.
In business fundamentals, India at No.18, tumbled eight spots from 2019, suggesting economic reforms have not gone far enough for India to maintain its place.
“The industry sees India as having the greatest potential for logistics as an emerging market,” says Andy Vargoczky, SVP Sales & Marketing Asia-Pacific for Agility Global Integrated Logistics. “The slowdown in business fundamentals is concerning, but India is still seen as a viable alternative compared to China, which has been embroiled in a trade situation during the last year with the U.S.”
2020 Index and Survey Highlights
• China and India, atop the 2020 rankings based on their size and strength as international and domestic logistics markets, lag behind smaller rivals in business fundamentals, a category that ranks countries based on regulatory environment, credit and debt dynamics, contract enforcement, anti-corruption safeguards, price stability and market access. In that area, China ranks No. 8 and India is No. 18.
• The strongest clusters of emerging markets are in the Arabian Gulf and Southeast Asia, thanks to business-friendly conditions and core strengths – the Gulf’s energy wealth and Southeast Asian manufacturing power – that draw logistics activity. In the Gulf, UAE (No. 3), Saudi Arabia (6), Qatar (7), Oman (14), Bahrain (15) and Kuwait (19) rank strongly. Among ASEAN countries, Indonesia (4), Malaysia (5), Thailand (9), and Vietnam (11) are strong.
• Survey respondents see India as the market with greatest potential over China, their second choice. In rankings of best business conditions, several countries are making big moves: Egypt climbs 10 spots to #17; Ukraine jumps 10 spots to #27; Ghana drops 13 spots to #32; and Iran tumbles 12 spots to #38.
• Forty-two percent of those surveyed say a prolonged trade situation between the U.S. and China could benefit Southeast Asian countries, which offer manufacturing and sourcing alternatives to China. This is less, however, than 56% who said last year that Southeast Asia would benefit.
• Egypt, despite a brief period of social unrest in 2019, showed significant gains across all indices. On the overall index, Egypt rose six spots to No. 20, while leaping 10 spots on the business fundamentals chart (20), six spots on the domestic opportunities index (13) and jumping five spots on the international opportunities index (23).
• The top three factors that keep small businesses out of global trade are trade bureaucracy (17%), government/border instability (14%) and inability to compete with larger rivals (14%), according to supply chain professionals.
• Despite the belief a recession is likely, emerging markets still grew 3.7% in 2019 and are projected by the IMF to grow 4.4% in 2020. As for what is driving emerging markets growth, 23% say modernization of customs systems and processes; 18% cite increased internet penetration; 16% say modernization of logistics provider systems (WMS, TMS, etc.); and 15% mention increased adoption and modernization of online payment systems.
• The top five “megacity” emerging markets logistics hubs are Shanghai, New Delhi, São Paulo, Jakarta and Mexico City. Megacities – urban centers with populations of 10 million or more – require vast logistics support to meet domestic needs and engage in trade.
• E-commerce fulfillment is named as the logistics service most likely to maintain or improve growth, well ahead of other services such as domestic last-mile delivery and international express parcel delivery.
• The countries with the least potential as logistics markets in 2020 are Syria, Iran, Venezuela, Iraq and Libya, according to the survey. Transport Intelligence (Ti), a leading analysis and research firm for the logistics industry, compiled the Index.
2020 Agility Emerging Markets Logistics Index : www.agility.com/2020index
