DHL index shows 25% globalization rate

Globalization is trending upwards, despite regionalization and nearshoring gaining momentum in the past year. Globalization, which reached a record high of 25% in 2022, continues to linger just under that number, according to the DHL Global Connectedness Index, presented in a March 14 webinar by DHL. The index “summarizes globalization, based on international flows of trade, capital, information and people worldwide” from 0% to 100%, according to the report. While strong, 25% indicates there is “ample scope” for globalization growth, according to the report. [caption id="attachment_57141913" align="aligncenter" width="528"] DHL Global Connectedness Index from 2001 to 2023. (Courtesy/DHL)[/caption] “There is ample evidence of global trade having lifted millions of people out of poverty, empower[ed] minority groups, and support[ed] economic development and innovation around the world,” DHL Group Chief Executive Tobias Meyer previously told Air Cargo Next . Indeed, “the growth of international flows is keeping pace with — and in some cases exceeding the growth of — domestic activity,” the report states. “The data are unambiguous: flows of trade, capital, information, and people between countries have proven highly resilient in the face of recent crises.” Comparatively, globalization was at 20% in 2001, according to the index. “Globalization has become a divisive issue in many countries around the world, as people question its impact, whether it has produced a sharp and uneven divide between winners and losers, and whether it poses a threat or opportunity for domestic production and national economies overall,” Meyer told Air Cargo Next . DHL is at No. 2 on Air Cargo Next ’s 2023 Power 25 list of top freight forwarders with 1.9 million airfreight tonnes flown. Omnishoring With a recovering market and increased demand in the first quarter of the year, there is no evidence of geopolitical fractures across global trade lanes outside of Russia, Andrew Williams , DHL chief executive for the Americas, said during the webinar. While many regions in the Americas are moving away from Chinese manufacturers, nearshoring is also not occurring as rapidly as it has been reported, he said. “We don't necessarily see this on a wide-scale basis globally, but rather, we characterize what's happening now more as ‘omnishoring,’ where indeed some countries are for sure de-risking their supply chains, expanding to new sourcing and production locations,” Williams said. U.S.-China trade lanes have declined 25% since 2016, however China remains one of the top 10 most globalized economies in the world, in addition to: Singapore Netherlands Ireland Luxembourg Malta Switzerland Belgium United Arab Emerates United Kingdon Hong Kong, SAR, China “I think, if anything, globalization is evolving,” Cathy Roberson , Cargo Facts Consulting senior consultant and Air Cargo Next columnist, said today. “It will never go away in my opinion. We talk about ‘regionalization,’ that’s still global in my mind.” Retailers continue to source from overseas with diversified sourcing partners to other countries and have reduced exposure to Chinese manufacturers, Roberson said. Shippers “haven’t completely pulled out of China,” she said. “China has built impressive manufacturing capabilities, including the required infrastructure — there is no other country that can match their abilities.” E-commerce effect E-commerce continues to boom globally, contributing 50% to 60% of total volumes in some markets, especially since the pandemic, Williams said in the webinar. This trend is aiding globalization, he said. “E-commerce allows entrepreneurs to trade internationally, regardless of their scale or the resources they have access to,” Williams said. “And it's opened up doors of international trade for a variety of diverse businesses.” E-commerce is projected to grow 5% to 7% year over year in U.S.-China trade lanes, Derek Lossing , senior adviser and founder of Cirrus Global Advisors, previously told Air Cargo Next . Register here for Air Cargo Next ’s free webinar, “The Role of Drones in the Future of Air Cargo,” on Tuesday, March 26, at 11 a.m. ET.

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