DHL Global Trade Barometer: A bittersweet “what could have been” scenario

And why I’m nevertheless optimistic

These are without a doubt uncertain times we are facing, both on a private and professional level. Though it’s clear to which disruptive event I’m referring, please allow me to delve a bit deeper. Usually, we would have released the latest update of our DHL Global Trade Barometer (GTB) in the last few days. For those who are not yet familiar with our GTB, let me explain it in a nutshell. DHL Global Trade Barometer (GTB) is a unique early indicator of both the current state and future development of global trade. It is based on selected and aggregated market data from air and containerized ocean freight, accounting for more than 75 percent of world trade. The data is compressed into an index that forecasts how global trade will develop in the next three months. Everything above the index value of 50 represents growth in global trade. Since its launch in early 2018, the tool has proven its accuracy, reliability, and credibility. However, the GTB – as a very early indicator – is unable to predict the impact of such disruptive events as COVID-19. To avoid presenting an inaccurate picture, we have decided to postpone the release of the GTB update for the second quarter of 2020. It will take some time to collect and analyze the data showing the initial impact of COVID-19, and even then, we won’t be able to predict the full extent of the consequences – but we will at least have a first impression.

What a bittersweet coincidence - just as COVID-19 was spreading across the globe we received the latest results of our most recent GTB analysis, which actually painted an encouraging picture. The updated GTB indicated early signs of recovery for the first time after four quarters in which world trade had been losing momentum. The Index had increased by +3 points to 48, only two points away from the turnaround point between decline and growth. Six out of the seven monitored countries have been delivering encouraging outlooks. In June 2019, we saw the DHL Global Trade Barometer falling below the threshold of growth for the first time since its launch and world trade progressed at a moderate pace throughout the rest of the year. The most-up-to-date GTB, however, showed the first promising steps in the right direction since that mid-2019 dip. While the latest DHL Global Trade Barometer update has been showing signs of recovery fuelled by nearly all contributing countries, COVID-19 started disrupting traditional supply chains at the same time. After trade tensions and Brexit, a new threat is putting world trade at risk like never before. 

Let me be clear: I don’t want to portray a pessimistic future, rather I want to highlight how unique and unpredictable this situation is that we are currently in. That said, I’m firmly convinced that the situation will once again take a turn for the better both economically and especially in people’s daily life.

What makes me so confident? As I have clearly illustrated, it’s not data my confidence is based on, because the data is not currently precise or accurate enough to draw conclusions one way or the other – at least not in this exceptionally unusual situation. My confidence is instead based on my colleagues at DHL Global Forwarding and the whole Deutsche Post DHL Group. I’m deeply impressed by the commitment, strength, and can-do-attitude that they are showing every day as they serve our customers, be it by dispatching, loading, un-loading, or consolidating freight in our operations or by delivering shipments, parcels, and mail to our customers. Last but not least, I base my confidence on the colleagues working behind the scenes in the home office who are expertly managing multiple tasks while physically distanced from their teams. One would be tempted to think that these challenges and the overall uncertainty would tear people apart and corrupt their morale - but it has actually been the complete opposite case. Although we are forced to distance ourselves socially, the people are closer to each other than ever before. I see smart, unorthodox, and pragmatic ways of solving problems and overcoming hurdles – and I mean that with the utmost sincerity. You can be sure you have a good team of freight forwarders when they move cargo safely and punctually in normal times, but you know that you have an excellent team of freight forwarders when they get shipments and freight moved in times like these, when capacity and equipment is tight and most parts of the world are under lockdown. With nearly all commercial passenger flights being cancelled, air freight capacity is tight in the market. Despite this, our colleagues are working tirelessly to find and implement creative alternatives. For instance, they are setting up to 20 additional charter flights a week, not only to secure the necessary flow of goods and keep supply chains up and running, but also to secure the transport of protective gear, facial masks, medicine, and biologicals. This type of agile problem solving perfectly exemplifies our group’s purpose of “connecting people, improving lives”.

Thank you to all the people who I am grateful to call my colleagues and thank you to all our customers for your trust and collaboration! We are here for you!

Stay safe! Stay healthy!