DHL launches global trade barometer, and the mercury is rising

22 / 01 / 2018

  • Index = expected trade development within next three months

Logistics giant DHL has introduced what it claims is an early indicator for the current state and future development of global trade.

The DHL Global Trade Barometer, published quarterly, is based on large amounts of logistics data from the deepsea container market that are evaluated with the help of artificial intelligence.

The January 2018 barometer indicates that global trade will continue to grow within the next three months. On its initial release, the index scored 64, which is slightly below the values calculated for previous months.

“That means that world trade is still considered to be in an expansive mode, but growth loses momentum,” said a spokesperson for DHL.

The spokesperson added: “The decline is due to weakening prospects for Chinese and Japanese trade, which is only partially offset by improved prospects for India, South Korea and Great Britain.”

Developed in co-operation between DHL and Accenture, the barometer provides an outlook on future trade and also on the prospects for the global economy.

Tim Scharwath, chief executive of DHL Global Forwarding, Freight, said that the logistics provider has both “a deep understanding of the driving forces behind global trade volumes” and “the industry expertise to analyse and interpret market data”.

Scharwath added: “Our network, knowledge and experience uniquely position us to understand global supply chains in order to derive a global trade outlook.

“The DHL Global Trade Barometer shows impressively how digitalisation – with the use of Big Data and Predictive Analytics – opens up entirely new opportunities that we can use for the benefit of our customers.”

Accenture will provide data modelling and predictive analytics to forecast future trade trends for DHL which stated that it will receive “one unified view of the insights which will give them a stronger understanding of current and future state of global trade logistics for its customers”.

The DHL Global Trade Barometer is based on import and export data for a number of intermediate and early-cycle commodities that serve as the basis for further industrial production, e.g. brand labels for clothes, bumpers for cars or touch screens for mobile devices.

Sources for the index are aggregated market data from air and containerised ocean freight in seven countries, which account for more than 75% of world trade. Using artificial intelligence and various statistical methods this data is compressed to a single index value, which is published on a global level and individually for the seven countries evaluated.

The DHL Global Trade Barometer index represents the weighted average of the current growth and the upcoming two months of global trade.

An index value above 50 indicates a positive development; values below 50 point to a decline in world trade.

Tests with historical data have revealed a high correlation between the DHL Global Trade Barometer and real containerized trade, providing a three-month forward-looking estimate.

In addition to the findings on world trade in general, says that the barometer provides “deep insights into specific issues, e.g. the main macroeconomic factors that are affecting trade trends or the countries and regions that are driving global trade”.

By breaking down the global supply chain, volume trends within industry sectors could be identified, pointing to outperforming and declining sectors.

The new tool will help DHL customers to optimise their business processes

Due to the high quality of the data, said DHL, the barometer has a “high significance also beyond logistics”.

As an indicator for future trade and economic growth worldwide, the index could be integrated into forecast models by banks, associations or economic research institutes.

“In a world characterized by volatility and uncertainty, we are contributing to greater transparency and predictability – for the benefit of our customers, our business and society,” Scharwath said.