The aftermath of the economic crisis of 2009 highlights the shifting patterns of global tradelanes. Shifts in tradelanes have always occurred as new markets opened however, these changes have become more pronounced as outsourcing has become the norm and individual countries’ economies become more entwined with one another.
Transportation and logistics providers must continually monitor economic changes throughout the world and be able to respond to these changes in order to grow their business. For example, long known as the world’s largest import market, the US, instead, is improving its export output. Near sourcing is another major trend that is appearing to take off. Mexico’s output is increasing as more manufacturing shifts to this country. Rising oil prices, transportation costs, labor costs etc. are among the reasons for this trend.
Because of the ongoing debt situation in Europe, the jury is still out as far as what the outcome will bring. Like the US, Europe too, has primarily been known as an importer however, it has witnessed increases in exports in 2011. This may prove to be a long term trend in which case, it may stave off any possibilities of a recession in 2012.
This leads us to China, the exporter to the world. Because its two largest partners, the US and Europe, are no longer importing as they did prior to the 2009 economic crisis, China is shifting its focus to other markets including South America, Middle East, Africa, domestically and regionally. Although, the sustainability of some of these shifts, remain questionable, the Chinese government is also studying ways in which to encourage domestic spending. This will be good news for those transportation and logistics providers that have made investments in the country. Plus it will be good news for places such as the US and Europe who have seen their exports increase throughout 2011.
In regards to global trade, Africa and the Middle East remain in their infancy however; both regions need to be monitored by transportation and logistics providers. DHL, a great example of a logistics provider that responds quickly to trade shifts, is investing heavily in Africa. Not only known for its raw materials and minerals, but basic manufacturing is increasing in Africa. South Africa is also a growing a logistics hub. With the aftermath of the “Arab Spring”, the Middle East, flushed with plenty of cash, has invested in infrastructure and is in a geographic location idea for trade, connecting Europe and Asia.
Emerging markets has been touted as a great growth potential for companies, transportation and logistics providers. True, these markets have experienced strong growth, but questions abound on their ability for continued growth and if they are able to carry the world if another economic crisis occurs. One must also not forget about the traditional markets as they continue to evolve.
Still, investing in foreign locations is not for the faint of heart. For companies looking to grow their business via expansion, partner with a credible transportation/logistics provider who has the knowledge of such things as customs, trade, infrastructure, taxes etc. For those companies, transportation providers and logistics providers, monitoring these ongoing shifts in tradelanes is vital and companies such as Transport Intelligence can help. Transport Intelligence and Agility partnered to publish the annual Agility Emerging Markets Index . It is a good study on shifting tradelanes and countries to do business in. The report is available for free here.
