Tariffs, sanctions, embargoes, political instability, among other disruptors including natural disasters and cyberthreats, greatly impact the global economy.
It also affects how OEMs manufacture and distribute their products. So how does big business maintain supply chain continuity and guarantee a reasonable level of service in this complex operating environment? Out of necessity, it commits to a strategy, a contingency plan.
As trade tensions between China and the US grow, businesses in the Asia Pacific region – according to research released from Economist Impact and DP World – are adopting diversification strategies and digital innovation to maintain supply chain resilience. About 33 per cent of these Asia Pacific (APAC) businesses are creating parallel supply chains to avoid disruptions caused by geopolitical risks, while 29 per cent are creating dual supply chains to cater for Chinese and US markets as companies navigate the complexities of increasingly fragmented trade environments.
The fifth annual Trade in Transition study surveyed more than 3,500 supply chain executives around the world. The global findings, which were launched at the World Economic Forum, reveal that firms are being forced to adapt at speed to rising protectionism and shifting geopolitical alliances, with business continuity and cost management as chief concerns.
The research has outlined three main trends in APAC trade.
1. Strategic diversification to manage risks and regional pressures
Adoption of ‘China Plus One’ strategies and the creation of parallel supply chains have become more prevalent among APAC businesses, spurring the growth of alternative production hubs in other Asian countries such as Thailand and Vietnam. Firms in APAC are also increasing regional integration and establishing dual supply chains to better mitigate geopolitical risks, reduce costs and strengthen oversight.
2. Leveraging government intervention and reconfiguration
Supply chain regionalisation is further incentivised by the negotiation and implementation of regional preferential trade agreements which result in enhanced cost control, operational efficiency and support for local economies. About 38 per cent of APAC business leaders saw increased opportunities in the region with the likes of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) in effect, while 30 per cent enjoyed cost savings given reduced tariffs on exports in member countries. Almost a quarter (23 per cent) of respondents also reported enhanced sourcing within the region, strengthening local supply chains and reducing dependence on markets outside the region.
3. Technology adoption to counter labour shortages and enhance efficiency
Businesses continue to invest in emerging technologies such as automation and artificial intelligence to address workforce shortages and sustain productivity. These investments are paying off, with 36 per cent of APAC business leaders reporting significant reductions in trade operation costs, and 28 per cent seeing improvements in resource planning and supply chain efficiency. Governments in the region are also supporting technological transformation, with initiatives such as Japan’s Society 5.0 empowering businesses through digital innovation.
Glen Hilton, CEO & Managing Director, Asia Pacific, DP World, said: “The Asia Pacific region is in an era of significant transformation. As businesses in the region implement bold strategies – diversifying supply chains, capitalising on regional trade deals and adopting frontier technologies – to drive expansion, they must also balance ambition with caution to sustain momentum in the face of global geopolitical instability.
“Our customers can count on DP World to help them strike this balance. With our suite of end-to-end supply chain solutions anchored by our strong network of ports and terminals, we stand ready to help businesses design agile supply chains for them to tap on Asia Pacific’s unparalleled growth potential.”
John Ferguson, Global Lead, New Globalisation, Economist Impact, added: “In 2025 and the foreseeable future, global trade will be shaped by three forces: shifting geopolitics, climate change, and a new wave of AI and automation. Yet, businesses are not retreating from international trade but are stepping up to the challenge. Firms that stay agile and cost-efficient will have the edge. Firms that also combine risk management with AI experimentation and openness will be best placed to win in this new chapter of globalisation.”
A conversation with DP World CEO and Managing Director APAC, Glen Hilton
With more than 30 years of experience in logistics as well as port and terminal operations, Glen Hilton has been delivering effective and innovative solutions that make trade flow and unlock greater opportunities for people and businesses.
As the CEO and Managing Director for DP World in the Asia Pacific region, Glen oversees the company’s operations across several markets including Australia, China, Hong Kong SAR, the Philippines, South Korea, Thailand, and Vietnam. Based in Singapore, Glen leads a team of more than 10,000 employees in developing and implementing DP World’s commercial and operations strategies to accelerate growth across the region and deliver unrivalled value to customers and partners. He has also worked to build strong partnerships with China-based suppliers and maximise port-side investments in Türkiye, Europe, and Southeast Asia.
Hilton started his career with DP World in 2005 and within a year, was tasked to lead port operations in the Dominican Republic, which grew by 80 percent under his stewardship. He was subsequently named regional Head of Southeast Asian operations, a role he held for four years prior to his current appointment.
Hilton also previously served as the CEO of Malaysia’s largest container terminal at the Port of Tanjung Pelepas and was General Manager of international cargo handling for an airline in his native Australia.
Q: Do you have any important messages you would like to share in regards to supply chain diversification?
A: Companies should view supply chain diversification as an investment towards long-term resilience rather than a reactive measure to immediate disruptions. Diversification is a multi-step endeavour that requires deliberate strategic planning and weighing options among different configurations of supplier networks and manufacturing bases.
According to this year’s Trade in Transition research led by Economic Impact and supported by DP World, 46 per cent of businesses globally are diversifying geographically to access new markets and mitigate disruptions. However, this strategy is most effective when considered alongside other supply chain management approaches such as developing dual supply chains, reshoring, or regionalising. Businesses must build approaches tailored to their specific circumstances.
Q: Have you observed any recent logistics trends that you would like to elaborate on?
A: Technology is transforming the logistics sector within the APAC region and around the world. We anticipate continued adoption of frontier technologies such as AI, IoT and blockchain to optimise manufacturing and distribution workflows. These technologies enhance demand forecasting, inventory management and route optimisation, resulting in more efficient and cost-effective operations. IoT and blockchain, in particular, are enabling real-time tracking and monitoring of goods, significantly improving transparency and traceability.
According to the 2025 Trade in Transition report, technology adoption in supply chain management is already delivering tangible results in the APAC region, with 36 per cent of business leaders reporting significant reductions in trade operation costs with the help of technology. As digital integration deepens, these technologies will be pivotal in addressing challenges such as labour shortages and improving efficiency, while enhancing visibility and responsiveness.
Q: The report touches on trade tensions between the US and China. Would you like to weigh in on this in light of the recent Trump inauguration?
A: Global trade today is more complex than ever, demanding agility, resilience, and innovation. At DP World, we empower businesses with the global infrastructure, local expertise, and advanced technology needed to thrive in this evolving landscape across fragmented markets.
For businesses targeting both Chinese and US markets, dual supply chains offer a critical solution to navigate the complexities of increasingly fragmented trade environments. These supply-chain models enable firms to adapt to divergent regulatory requirements and trade policies in each market, ensuring continuity and reducing the risk of operational delays. In fact, within APAC, 29 per cent are creating dual supply chains to cater for the Chinese and US markets.
Q: What are your thoughts on the latest report? Does anything surprise you? Did you expect to see these results?
A: The latest Trade in Transition report reinforces the trends we have been observing over the past few years, as businesses focus on cultivating supply chain resilience in the face of an increasingly complex global trade environment, driven by geopolitical tensions, shifting consumer demands, and the need for greater resilience.
We see growing adoption of the ‘China + 1’ strategy among businesses.
Companies are not abandoning China but are instead supplementing their operations by building manufacturing and supply chain hubs in alternative markets such as Vietnam, Malaysia and Thailand. This approach allows businesses to maintain presence in the world’s second largest economy while reducing overdependence on any single market.
The growing acceptance and adoption of technology is also a positive signal that the industry is looking at different ways to improve efficiency and productivity.
Q: Are businesses around the world doing enough to reinforce their respective supply chains?
A: Businesses worldwide have made significant strides in reinforcing their supply chains, but the dynamic nature of today’s trade environment means that there is always more to be done. The growing adoption of strategies like supply chain diversification, regionalisation, and dual supply chains demonstrates a heightened need for supply chain resilience in the face of geopolitical tensions, economic uncertainty, and climate-related disruptions.
Another area where businesses need to do more is in addressing ESG requirements. With global regulations like the EU’s Carbon Border Adjustment Mechanism (CBAM) and Corporate Sustainability Due Diligence Directive (CSDDD) setting the bar higher, companies must focus on reducing Scope 3 emissions and ensuring ethical practices throughout their supply chains.
Ultimately, reinforcing supply chains is a continuous process. As trade policies evolve and risks emerge, businesses must remain agile – leveraging technology, fostering partnerships, and reevaluating their strategies to ensure efficiency, sustainability and resilience.
Q: Should businesses internationally generally seek to establish dual supply chains amid geopolitical risk?
A: Establishing dual supply chains can be an effective risk management strategy for navigating geopolitical uncertainties. According to the 2025 Trade in Transition report, 32 per cent of global businesses are using dual supply chains to retain to key markets like the US and China while mitigating geopolitical risk.
However, dual supply chains are just one approach within a broader range of supply chain strategies that businesses can adopt, such as diversification, regionalisation, nearshoring or localisation. The right approach depends on specific operational needs, industry requirements, and risk profiles. For instance, diversification spreads risk but demands precise execution to control costs, whereas localisation enhances control but limits the supplier pool. Success lies in striking the right balance between these approaches.
Q: What are the consequences of potentially over investing supply chains? Or, what are the consequences of not investing in contingencies for moving freight?
A: Supply chain management has become an essential focus for businesses worldwide.
A 2023 survey by Accenture saw executives claiming to miss revenue growth opportunities of between 7.4 per cent to 11.0 per cent due to disruption in their engineering, supply, production and operations, highlighting the need for businesses to invest in supply chain and operational resilience to remain competitive.
However, no two businesses are the same. Companies must tailor their supply chain investments to align with their unique circumstances, ensuring they take calculated risks balancing growth potential and stability of operations.
Q: Can you link any developments in the commercial road transport industry to the topics discussed in the report?
A: Technology is changing the game for the commercial road transport industry and more broadly for the logistics industry.
Road freight is seeing increased integration of advanced technologies to optimise operations and address existing inefficiencies. Telematics and IoT-enabled systems enable real-time vehicle tracking, route optimisation, and predictive maintenance, while AI-powered tools are enhancing freight planning and reducing downtime.
Government intervention through trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) continue to encourage the regionalisation of supply chains, which have a direct impact on the road freight industry.
By reducing trade barriers and harmonising customs procedures, these agreements facilitate cross-border trade, increasing the demand for efficient road freight services to connect manufacturing hubs, distribution centres, and regional markets.
Moreover, the integration promoted by these agreements incentivises the development of regional transport corridors and cross-border infrastructure projects. For example, the Greater Mekong Subregion corridors are being enhanced to support the increased movement of goods within RCEP countries, creating significant opportunities for road transport operators to scale their operations and improve efficiency.
On a broader level, governments across the Asia-Pacific and Oceania region are increasingly prioritising domestic manufacturing and economic growth policies. Comprehensive Economic Partnerships, such as the Australia-UAE and New Zealand-UAE agreements, are establishing bilateral free trade frameworks that strengthen economic ties. As economic growth takes centre stage for policymakers, governments will look to streamline operations, reduce expenditure, and invest in sectors that drive economic expansion – helping to curb inflation and ease cost-of-living pressures on households.
