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Many firms have no contingency plans if trade war worsens: Survey

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SHANGHAI : As the US-China trade war drags into its 16th month and continues to disrupt supply chains, more than one-quarter of multinational companies have not made contingency plans, showed a survey from a subsidiary of courier giant DHL.

The survey by DHL Resilience360, a supply chain risk management software platform, included 267 anonymous responses from supply chain executives across industries.

Over half of the respondents were from companies with annual revenue of over 1 billion yuan (S$194 million) and most were from the US and European Union.

Of the respondents, 48 per cent from the engineering and manufacturing industry and 40 per cent from the automotive mobility sector reported that they had no contingency plans at all.

"We are now dealing with such a new frontier that most supply chain professionals have not encountered this before, and it is so new that I think a lot of people are struggling to even understand what they can do to deal with it," said product director for risk monitoring at DHL Resilience360 Shehrina Kamal.

Of those that had decided against relocating out of China, some said they were unaffected by the trade war.

Of the 12 per cent of respondents that have moved manufacturing out of China, some faced headaches such as a lack of skilled labour.

India and Vietnam were among the most popular alternative locations. - REUTERS