Image: DHL/NYU

Despite global crises, DHL's "Connectedness Tracker," which provides analyses of global trade, reports an all-time high for world 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 lengthens the routes.

This is seen as a sign that globalization has not reversed course and is now moving towards regionalization. The Global Connectedness Tracker, a collaboration between DHL and the New York University Stern School of Business, provides an update on the state of globalization. As an extension of the established DHL Global Connectedness Report, the Tracker monitors the distribution of trade, capital, information, and people flows around the world.

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

“The Global Connectedness Tracker clearly shows that there are still countless opportunities worldwide for countries and companies to expand their markets,” says John Pearson, CEO of DHL Express. “The international landscape is changing, but the fundamental drivers and benefits of international connectivity remain. Global trade helps people, businesses, and entire nations succeed.” And, of course, it also benefits those who manage the logistics.

J. Pearson

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

According to this data, 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, however, these figures reflect the fact that direct trade between the US and China represents 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 of China account 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 in share during this period.

Given the possibility of 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 Connectedness Tracker points out that global trade has already proven resilient following Brexit, the US-China trade conflict, the Covid pandemic, and the wars in Ukraine and Gaza.

“In turbulent times, it’s important to look beyond the political crossfire surrounding globalization in order 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, it’s clear 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 Connectedness Tracker shows that information flows have seen the greatest increase in the degree of globalization over the past two decades due to digitalization.

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

klk./www.dhl.com

The DHL Connectivity 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 tailored insights into the state of globalization and world trade, interactive charts, and download options. The DHL Global Connectedness Tracker was commissioned by DHL and developed by Steven A. Altman and Caroline R. Bastian of the New York University Stern School of Business.

The Connectedness Tracker for download