We are delighted to share that Daniel Karlsson, Managing Partner of ARC Consulting, was recently featured in a prominent Swedish newspaper, Dagens Industri, discussing the escalating crisis in the Middle East and its profound impact on global supply chains.
The ongoing maritime crisis, fuelled by attacks in the Red Sea, has spurred an unprecedented number of Swedish companies to explore the possibility of relocating their procurement and production operations from Asia to Europe, as reported by Daniel Karlsson in a recent interview.
In the featured article, Daniel Karlsson warned about the stark reality of potential cost increases that many businesses and ultimately, consumers will face. He emphasized the persistent threat of skyrocketing freight prices, possibly increasing by 30% or more in the near future. Karlsson expressed concern about the situation in the Red Sea, stating that the shipping crisis shows no signs of improvement.
As mentioned in the article, we have received a large increase of requests from clients affected by the global shipping turmoil, particularly those with operations or significant purchases in Asia. European businesses, in particular, are seeking assistance in investigating and mapping out possibilities to de-risk their supply chains.
“We are receiving more inquiries than ever about diversifying supply chains and supplier bases due to among other things, the logistical challenges in the Suez Canal,” said Daniel Karlsson.
The prevailing trend in recent years saw companies moving their procurement and production to Asia, driven by cost considerations. However, disruptions in supply chains during the COVID-19 pandemic and the grounding of Evergreen’s Ever Given in the Suez Canal marked a turning point. The recent attacks in the Red Sea have further accelerated this shift. Explore further insights on the Red Sea disruptions and strategies to navigate the evolving geopolitical currents here.
Daniel Karlsson also highlighted a surge in interest among clients for production in Eastern Europe, with many Swedish companies already embarking on this journey. ARC Consulting is actively involved, providing analyses and recommendations on where, how, and which categories of products that can be moved from Asia to Europe. Learn more about how ARC Consulting can help your company here.
Increased costs and a deteriorating investment climate in not least China, coupled with rising geopolitical tensions, contribute to more companies planning a diversified approach to their supply chains, Daniel Karlsson added.
While some companies may consider bringing volumes back to Sweden, Daniel Karlsson noted that, at present, countries with lower costs and larger supplier bases are more attractive options. Romania, Bulgaria, and Turkey are cited as examples.
As the supply chain landscape undergoes significant transformations, ARC Consulting remains at the forefront, guiding businesses through strategic decisions in these challenging times. Daniel Karlsson’s insights shed light on the evolving dynamics of global trade and the imperative for companies to adapt to emerging challenges.
Other Media Mentions:
Daniel Karlsson’s insights have also garnered attention in several other leading publications, including: