Tuesday 17th March, 2020
Global business to business transactions have dropped by 62% in the past week according to the latest data from Tradeshift.
Analysis across the Tradeshift platform, which handles trade transactions between over 1.5 million businesses in 190 countries, found cross border transactions between businesses have fallen by 58% week on week, while domestic transactions have dropped 66% during the same period.
The findings mirror the pattern observed in China during the height of the outbreak across the region. Tradeshift’s data analytics team found cross border and domestic trade activity in China fell by 56% in the week commencing February 16th.
The scale of the slowdown is having a significant impact on liquidity, with an increasing number of large organisations saying they are looking at ways to build or maintain cash reserves. Tradeshift is actively working with customers to advise on measures to ease liquidity pressures and get working capital flowing through the supply chain.
Christian Lanng, CEO, Tradeshift, said: “Every conversation I’m having with businesses right now centres on cash flow. Companies are looking at how they can keep cash on their books to see them through the current period. But they’re also acutely aware that suppliers are facing the same liquidity challenges. If cash dries up across the supply chain, we could see a lot of smaller businesses start to fold. It’s a balancing act. Get it wrong and the whole house of cards could come down.