The author is the Director General of the World Trade Organization

Supply chain disruptions are painful for both companies and consumers. They are causing trouble for governments and central banks around the world, and the war in Ukraine is exacerbating that pressure. For small businesses, especially from developing economies, the consequences for growth, job creation and poverty reduction can be catastrophic.

Small businesses may find themselves excluded from global supply chains as freight rates skyrocket, shifting capacity to the most profitable routes. Despite growing economic uncertainty, the private sector, governments and international organizations are not working together to deliver the solutions needed to improve the efficiency and resilience of trade flows.

we are in the WTO Recently convened over 20 leading CEOs and leaders The supply chain crisis and possible responses from the perspective of ocean carriers, port operators, logistics companies and financial institutions.

Delays and shortages still hamper global trade, largely as consumers shift spending away from services to durable goods amid the pandemic. But it’s not just strong consumer demand and booming e-commerce that’s causing freight costs to soar. A clear message from business leaders is that structural weaknesses were weighing on supply chains even before the pandemic. These problems are only getting worse, and we need to fix them.

Shipping companies say onshore congestion is the main driver of soaring freight rates, with competition in containers and port standoffs now excluding small businesses and developing economies from trade networks – and that has been building for years.Carriers have dramatically increased the number and size of ships in their fleets, but infrastructure has lagged and many Ports cannot accommodate new oversized ships.

Severe labour shortages have severely impacted unloading and transshipment of cargo at ports, as seafarers, truck drivers, shore and warehouse workers in some major hubs refuse to offer low wages, unsociable hours and difficult working conditions. Businesses report that only a handful of truckers will show up to keep container terminals open overnight.

Self-driving trucks and driverless cranes are already improving efficiency and working conditions in some ports. Private sector investment in further automation can help fill some of the labor gaps, but most importantly, labor conditions for workers must also improve. Public and private investment is urgently needed, and port operators and shipping companies want the government to speed up the planning approval process. Freight forwarders say hinterland road and rail infrastructure – already strained in many countries by the growth of domestic e-commerce – also requires investment, especially in developing and landlocked economies.

In addition to physical infrastructure and labor shortages, digital infrastructure and connectivity also require attention and investment. Traders are often unaware of upstream or downstream disruptions until it is too late to reschedule or reschedule shipments. This makes the current supply crunch more difficult to manage.

In addition to these structural issues, process issues such as red tape and paper-based customs agreements add unnecessary delays and costs to trade transactions.implement WTO Trade Facilitation Agreement Investing in a streamlined system will reduce unnecessary bureaucracy, speed up customs clearance and reduce transaction costs. Governments have shown that they can quickly streamline border processes to enable rapid delivery of essential goods. Developing countries benefit the most.

Last, but perhaps most importantly for the future, climate change poses a long-term threat to supply chains and global trade networks. Developing countries and small island nations are most at risk, but no country or business will be affected. Long-term decarbonization of shipping and logistics will require major breakthroughs and could lead to higher transport costs.

To avoid a further rise in inflationary pressures, we need bold and coordinated action. Each player must play their part in addressing the structural weaknesses behind supply chain disruptions, even as we work to bring supply and demand back into balance. Otherwise, the global economy will pay the price — especially for consumers, small businesses and fragile states. It is in everyone’s interest to address these issues, and there is a strong sense of goodwill: we must act now.