Executive Briefings

In Recovery, Trade Values May Rise Faster than Volumes, Boosting Air Express Business

As the economy rebounds, rising demand for individualized health care, for documents transfer in the international services industry and for equipment spare parts will result in the air express industry claiming a larger share, in value terms, of international trade. This is the prediction of a new study from Deutsche Post DHL and the London School of Economics.

The study "International Trade, Express Logistics and Globalization: Part and Parcel of the Solution to Current Economic Challenges" reveals that the medium-term outlook for global trade remains strong even as trade remains stagnant in the short run, due largely to the low availability of credit. However, when credit becomes freely available and trade rebounds, the study suggests that the return of trade will not benefit all countries equally.

The study has singled out cost of sea transport and the availability of review procedures as two key prominent factors that influence a country's ability to attract international trade. The findings were based on an analysis of the cost and quality of logistics in Brazil, Russia, India and China, which account for 40 percent of the world's population and 15 percent of the global economy.

"Transport and logistics costs in particular outweigh tariffs as the greatest barriers to trade by a factor of 9:1. The study shows that countries which seek to be at the forefront of the next wave of globalization need to benchmark themselves against global best practices. Export-reliant emerging economies can improve trade conditions to strengthen their international trade levels when the global economy rebounds," said Frank Appel, CEO, Deutsche Post DHL.

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As the economy rebounds, rising demand for individualized health care, for documents transfer in the international services industry and for equipment spare parts will result in the air express industry claiming a larger share, in value terms, of international trade. This is the prediction of a new study from Deutsche Post DHL and the London School of Economics.

The study "International Trade, Express Logistics and Globalization: Part and Parcel of the Solution to Current Economic Challenges" reveals that the medium-term outlook for global trade remains strong even as trade remains stagnant in the short run, due largely to the low availability of credit. However, when credit becomes freely available and trade rebounds, the study suggests that the return of trade will not benefit all countries equally.

The study has singled out cost of sea transport and the availability of review procedures as two key prominent factors that influence a country's ability to attract international trade. The findings were based on an analysis of the cost and quality of logistics in Brazil, Russia, India and China, which account for 40 percent of the world's population and 15 percent of the global economy.

"Transport and logistics costs in particular outweigh tariffs as the greatest barriers to trade by a factor of 9:1. The study shows that countries which seek to be at the forefront of the next wave of globalization need to benchmark themselves against global best practices. Export-reliant emerging economies can improve trade conditions to strengthen their international trade levels when the global economy rebounds," said Frank Appel, CEO, Deutsche Post DHL.

Read Full Article