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Home » Global supply chains are struggling to keep pace with spiking orders volumes, Tradeshift data reveal
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Global supply chains are struggling to keep pace with spiking orders volumes, Tradeshift data reveal

Global supply chains are struggling to keep pace with spiking orders volumes, Tradeshift data reveal
April 22, 2021
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Business to business trade activity grew by 10% in the first quarter of 2021, but a recent surge in order volumes is creating fresh challenges for suppliers after a year of intense disruption, new transaction data from Tradeshift can reveal.

According to Tradeshift’s latest Index of Global Trade Health, order volumes jumped 16.9% in Q1 and one in five suppliers are concerned about their ability to keep pace with demand. The strain on supply chains is particularly acute among manufacturers. Order volumes across the sector were up by 80% year on year in March, but invoice volumes grew by just 20% over the same period.

The emerging delta between orders and invoices suggests that working capital is failing to flow through to suppliers to support the sudden ramp-up in customer demand. In a survey of suppliers, Tradeshift found that nearly a third of respondents had seen their cash flow position deteriorate over the past six months. Nearly half said that they’ve seen an increase in the number of late customer payments since the beginning of the year.

“The pattern we’re seeing in our data suggests supply chain activity is beginning to find its level and that level is currently set at one hundred miles per hour,” said Christian Lanng, CEO, Tradeshift. “A lot of suppliers have been left beaten up by events of the past year. Now they’re being asked to run a marathon without any fuel in the tank. It’s no wonder cracks are starting to appear, particularly in the manufacturing sector.”

Recent data suggests factories in the Eurozone’s manufacturing heartlands have been running at a record pace in 2021. Tradeshift’s own analysis shows that total transaction volumes across the region’s supply chains grew by 14.5% in Q1. U.S. transaction volumes, which leapt 29% in Q4, fell back into line with global averages in Q1, rising 10.2% during the period.

In the UK, transaction volumes have been running at a significant deficit since the pandemic, but there are signs that trade activity may be turning a corner. A 6% rise in transaction volumes during the first three months of 2021 brought supply chain activity up to parity with the pre-pandemic level in Q1 2020.

Christian Lanng commented: “A year ago, an unprecedented event caused havoc among global supply chains. Today, an unprecedented recovery is creating further disruption. The lack of transparency in supply chains makes them extremely vulnerable to volatility. Digitalization is seen as a way of building more resilient, collaborative supply chains. But we need to take the conversation beyond simply delivering transparency for buyers and look at whether the systems we are deploying are also delivering equivalent value and support to suppliers.”

https://hub.tradeshift.com/research-and-reports/tradeshift-index-of-global-trade-health-q1-2021
Submit your logistics, material handling, or supply chain related company news in Supply Chain Quarterly's's Industry Press Room section or New Products section
Global Manufacturing Technology
KEYWORDS Tradeshift
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