Pandemic Recovery in 2021? Or Beyond?

Percentage of logistics executives who expect particular regions to recover in 2021:

53%

Europe

49%

North America

Percentage expecting recovery in other regions between 2022 and 2024:

51% 42% 52%

South America

say the globaleconomy won’trecover until at least 2022Sub-Saharan Africa

AGILITY EMERGING MARKETSLOGISTICS INDEX2021

Amid an economic downturn and uncertainty caused by the pandemic, these nations rank highest in the 2021 Agility Emerging Markets Logistics Index.

What are the Top TenEmerging Markets in 2021?

2021 IndexRank Change from 2020

2

3

UAE 4

Malaysia5

Saudi Arabia6

Mexico7

Vietnam 8

Qatar9

Turkey10

1 0

0

0

0

0

+1

+1

+3

-1

-1

Top Domestic Logistics Market

Top International Logistics

Opportunities

BestBusiness

Fundamentals

Changes to the Top Ten

Vietnam jumps to 8th from 11th.

Thailand drops to 11th from 9th.

Mexico climbs to 7th, its highest position in Index history.

India2

Indonesia3

China1

India2

Mexico3

China1

Malaysia2

Saudi Arabia3

UAE1

India

Indonesia

China

The Pandemic Brings Challenges, but the LogisticsIndustry is Looking Ahead

How have operations been affectedby COVID-19?

say their supply chain has been disrupted

say they are experiencing decreases in sales

say they are experiencing significant increases in demand for certain items

say orders have been canceled

20%

19%

16%

11%

Once the crisis is over, logistics executives express confidence in returning to business.

Which most closely matches your strategy on operating/investing in emerging markets after the Covid-19 crisis?

say they are reviewing their strategy and they are currently MORE confident

26% say they will be entering emerging markets MORE actively as a result

26%

COVID-19 is Changing the Way Businesses Operate

60% of logistics executives in the Agility Emerging Markets Logistics Index say the pandemic has resulted in permanent changes to the way their businesses operate globally or regionally.

About 25% said it’s too soon to tell.

Only 14% say business will operate as usual, a sign the pandemic has made permanent changes in the way the global economy will move ahead.

The Changing Face of Protectionism

Amid signs of renewed protectionism in developed and developing economies alike, 47% of global logistics executives say their companies will only invest in emerging markets with “favorable conditions.”

Will increasing trade protectionism prompt you to rethink investments in emerging markets?

11% Investments will continue as planned

47% We will continue to invest, but only in markets with favorable trade conditions

18% Investment plans will not be changed

18% We have suspended investments until outcomes are more clear

Nigeria, a Nation on the Move

Nigeria leaped higher in the Agility Emerging Markets Logistics Index for 2021.

Sub-Saharan Africa’s largest economy has not escaped a downturn during the pandemic, but it has a growing and increasingly middle-class population.

Domestic Logistics

Opportunities

Up 6 spots to #10

OverallIndex

Up 5 spots to #30

International Logistics

Opportunities

Up 2 spots to #43

Business Fundamentals

Up 2 spots to #39

The Gulf is Strongest in Business Fundamentals

The Gulf offers the best, most stable business climates in the world of emerging markets.

3

4

Bahrain7

Oman 8

Kuwait11

1

Saudi Arabia

Qatar

UAE

Nearby Jordan is No. 10.Malaysia (2), Chile (5), China (6) and Morocco (9) are the other top performers.

In business fundamentals:

2020: Disruption Across the Global Supply Chain

Logistics executives felt disruption across the entire supply chain in 2020. This is likely to have implications for freight forwarders in 2021 and beyond.

Where companies felt the disruption:

19.6% Congestion at ports and

other transhipment points

16.9% Ensuring supply of

goods/inputs

18.4% Sourcing

transportation capacity

13.8% Storage of goods

16.1% Downstream distribution and delivery to consignees

15.1% International operations

Emerging Markets in 2021: The Most Potential and the Least Potential

The countries with the MOST potential to be logistics hubs in the next FIVE

years are…

Saudi Arabia increases its viability as a logistics center, leaping three spots to #7.Kuwait jumps three spots to #20.

The countries with the LEAST potential to grow as logistics market in the next

FIVE years are…

China

India

Vietnam

Brazil

UAE

1234 5

Iran

Venezuela

Ethiopia

Libya

Lebanon

1234 5

Asia Dominates the 2021 Agility Emerging MarketsLogistics Index

Asia, home to the world’s largest concentration of export-oriented manufacturing, continues to dominate the Index.

Six of the 11 top countries in the Index are Asian markets. Vietnam, the leading alternative to China as a production base for companies looking to exit or diversify from China, jumped three spots to No. 8 in the 2021 Index.

Asian nations on the 2021 Index:

2

3

Malaysia5

Vietnam 8

Thailand11

Philippines21

1 China

India

Indonesia

If Businesses Move Operations from China, Where to Go?

Despite COVID-19 pandemic and ongoing US-China trade friction, only 8% of companies relocating production from China would consider reshoring to their home countries.

For logistics executives who would pull operations from China, where would they relocate to?

Vie

tnam

India

IndonesiaThailand

Malaysia20

%

17%12%

10%

10%

14% Insufficient infrastructure

13% Incurring additional costs

12% Finding right vendors/suppliers

12% Trade compliance issues

10% Changing demands

In a New Decade, Changing Supply Chain Geography

As companies examine new production locations, their biggest concerns are insufficient infrastructure and additional cost. The desire to produce where there is abundant supply of low-cost labor is almost a non-factor today.

Logistics executives were asked: "What are your main concerns in supply chain geography?"

Which is the primary motivator for shifts in production supply chains?

46% Cost factors

23% Surety of supply

16% Diversify supplier base

11% Labor availability

4% Diversify inventory locations

Latin American Emerging Markets Make Some Moves

Chile has traditionally been strong in creating business-friendly conditions.

In 2021, the South American nation has been joined by other Latin American nations that are improving the climate for business.

12

20

Peru 24

Ecuador28

Brazil36

Paraguay40

Bolivia41

5 Chile

Uruguay

Mexico

Notable exceptions: Argentina at #43 tumbled three spots, while Venezuela was #49 out of 50 countries.

0

Changefrom 2020:

+1

+4

+7

+5

+5

+2

+3

Business Fundamentals 2021 Index:

Domestics Logistics Market: Movers and Shakers

2021 IndexRankThe Big Movers: Change from 2020

2

3

UAE 4

Malaysia5

Qatar6

Saudi Arabia7

Brazil8

Mexico9

Nigeria10

1 0

0

+1

-1

-1

-3

0

+6

+4

0

India

Indonesia

China

Malaysia, up four to #5Nigeria, up six to #10Iran, up five to #22Myanmar, up six to #42Cambodia, up five to #44Kuwait, down four to #12Argentina, down four to #26Angola, down six to #49

agility.com/2021Index

21

3

9

586

47

10

4

7

13

8

11

2

1

3

5

811 21

5

12

20

24

28

36

40

41

45%

Middle East andNorth Africa

56%

Asia Pacific

2