The main finding resulting from DHL’s Global Connectedness Index 2020 (GCI) developed together with lead author Steven A. Altman, Senior Research Scholar at the NYU Stern School of Business, concludes that global trade has rebounded strongly despite ongoing trade disputes and setbacks caused by COVID-19, and that digitalization reached new heights with forecasts predicting healthy trade growth in 2021.

“Soft V”
While presenting the seventh edition of the GCI study, CEO John Pearson of DHL Express, spoke repeatedly of a “soft V” when describing the implications of COVID-19 on the global economy. The
pandemic is unlikely to send the world's overall level of connectedness below where it stood during the 2008 - 2009 global financial crisis. Trade and capital flows have already started to
recover, and international data flows surged during the spreading pandemic as in-person contact migrated online, boosting international internet traffic, phone calls, and e-commerce, were his key
statements.
"The current crisis has shown how indispensable international connections are for maintaining the global economy, securing people's livelihoods, and helping companies strengthen their trading
levels," the executive said.
Developing countries benefit
He emphasized that connected supply chains and logistics networks play an essential role in keeping the world running and stabilizing globalization, especially at a time of a crisis that spans
the globe. This not only benefits leading trading, industrial, and logistics companies, but also increasingly embraces the economies of developing countries. Similarly, international trade
empowers SMEs to participate in the global marketplace, Mr. Pearson stressed in his presentation.
Punitive tariffs are poison to trade
How essential a networked world is, without trade barriers and punitive tariffs, is shown by the upcoming transport and distribution of COVID-19 vaccines. “The recent vaccine breakthrough has
put a spotlight on the systemic importance of fast and secure medical logistics dependent on a worldwide interconnected network that effectively ensures international distribution,” the
executive exclaimed. This includes traditionally underserved areas such as sub-Sahara Africa or parts of Latin America which have gained more attention in recent months. “We intend to up our
activities very strongly, particularly in Africa,” Mr. Pearson announced.

No major signs of reshoring
During the video call, the study’s lead author Steven Altman of the NYU Stern School of Business, delivered a homage on the merits of globalization. “We’ve seen a boom in medical production
and trade, and the upping of international internet traffic by 48% since the outbreak of COVID-19 as people-connectivity plummeted.” This digitalization trend will continue, he predicted.
Stronger global connectedness accelerates the world's recovery from the pandemic, as countries that connect more to international flows tend to enjoy faster economic growth, the scholar said.
Further to this, Altman emphasized that there were few signs of production reshoring, i.e. the return of industries to their countries of origin. Although he did not call the Trump policy by its
name, this specific finding of his university laid down in DHL’s Global Connectedness Index is a slap in the face for the still incumbent U.S. president, who boasted that he wanted to bring back
industries that had migrated to China, in particular by means of punitive tariffs and trade barriers. According to the NYU Stern School, this approach has failed all along the line.
Mixture of hopes and fears
In his brief forecast, Altman said that basically the prospects for globalization are quite bright, quoting an IMF study predicting an average trade growth of 8% in 2021. The U.S. presidential
transition and major international trade agreements give signs of hope, he said. Conversely, persisting technical conflicts (5G), populist opposition to globalization, the policy of nationalistic
regimes including the Brexit drama, are risk factors that could affect trade negatively.
Rounding the findings off, the GCI states that Europe remains the world's most globally connected region, with 8 of the 10 most connected countries, headed by the Netherlands, taking the top
spot. This shows what the political disintegration of the EU might put at risk.
“DHL – Amazon: do they still partner or are they becoming increasingly competitors?”
“The online shopping spree continues unabated: which consequences will this have for DHL Express in terms of ground infrastructure and fleet development?”
DHL promised to answer these questions in due time.
Heiner Siegmund
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