Image: DHL/NYU

Despite global crises, DHL's "Connectivity Tracker," which provides analyses of global trade, reports an all-time high for global trade. It's hardly surprising that traded goods are now statistically traveling longer distances (an average of 4,970 km): Sanctions are being circumvented by every possible (and impossible) means. This increases the distances traveled.

At least this is seen as a sign that globalization has not gone into reverse and is now moving toward regionalization. The Global Connectedness Tracker is published in collaboration between DHL and the New York University Stern School of Business as an update on the state of globalization. An extension of the established DHL Global Connectedness Report, the tracker tracks the proportional distribution of trade, capital, information, and people flows around the world.

The tracker measures international relative to national activity on a scale of 0% to 100% by region, individual country, and geopolitical orientation. The current value of 25% demonstrates that globalization continues at record levels despite geopolitical tensions and uncertainties. Users can download and share charts and data.

"The Global Connectivity Tracker makes it clear that there are still countless opportunities for countries and companies around the world to expand their markets," says John Pearson, CEO of DHL Express. "The international environment is changing, but the fundamental drivers and benefits of international connectivity remain. Global trade helps people, companies, and entire nations thrive." And, of course, also those in control of logistics.

J. Pearson

In 2023, 21% of the value of all goods and services produced worldwide were traded internationally. This figure is just below the all-time high of 22%, first reached in 2008 and again in 2022.

According to the study, relations between the US and China have continued to weaken. Direct trade between the US and China fell from 3.5% of global merchandise trade in 2016 to 2.6% in 2024 (January to July). At the same time, these figures reflect that direct trade between the US and China accounts for only a small portion of global trade.

The DHL Global Connectedness Tracker also shows that countries that are neither close allies of the US nor China are accounting for a growing share of global trade and are assuming new roles as bridges between the geopolitical rivals. Countries that are not close allies of either superpower increased their share of trade from 42% in 2016 to 47% in 2024. The United Arab Emirates, India, Vietnam, Brazil, and Mexico recorded particularly strong gains during this period.

Given potential tariff increases on US imports and potential new trade conflicts following Donald Trump's return to the White House, the analysis advises caution regarding assumptions that such developments would reverse globalization. The DHL Global Connectivity Tracker points out that global trade has already remained resilient following Brexit, during the US-China trade conflict, the COVID-19 pandemic, and the wars in Ukraine and the Gaza Strip.

"In turbulent times, it's important to look beyond the political crossfire surrounding globalization to make informed decisions. These decisions should be based on how international flows are actually developing," explains Steven A. Altman, Director of the DHL Initiative on Globalization at the Center for the Future of Management at NYU Stern. "While there's no guarantee that global flows will remain so robust, evidence shows that companies and countries often find creative ways to preserve the benefits of globalization. As long as markets are interconnected, a company that unilaterally withdraws from globalization can jeopardize its own competitive position."

Graphic: DHL/NYU

The DHL Global Connectivity Tracker shows that information flows – due to digitalization – have shown the greatest increase in the degree of globalization in the past two decades.

Although there has been greater interest in producing goods closer to customers in recent years, the analysis shows that regionalization is not overtaking globalization. In fact, most flows take place over stable or longer distances – which contradicts a broad trend toward regionalization. In the first seven months of 2024, traded goods even covered the longest average distance ever (4,970 km). In line with this, the share of goods trade that took place within the major global regions fell to a low of 51%.

klk./ www.dhl.com

The DHL Connectedness Tracker

The DHL Global Connectedness Tracker analyzes more than eight million data points on international trade, capital, information, and people flows. It also includes a user-friendly online data tool that provides customized insights into the state of globalization and world trade, interactive charts, and download options. The DHL Global Connectedness Tracker was commissioned by DHL and created by Steven A. Altman and Caroline R. Bastian of the New York University Stern School of Business.

The Connectedness Tracker for download