TODAY’S NEWS. TOMORROW’S INSIGHTS.A daily newsletter from McKinsey & Company
Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
New world-trade winners. It’s becoming trendy to discuss deglobalization. However, the possibility that countries will keep readjusting trade flows is more probable. This will, of course, generate new winners in global trade. 2022 was a tough year for international commerce, with COVID-19-related lockdowns in Asia and conflict in Europe fracturing supply chains and rattling the world. Although leaders relish highlighting the return of jobs to home countries, it’s not easy to do an about-face on globalization. [WSJ]
Shipping hub strikes. Workers were a force to be reckoned with in 2022. Labor unrest at major ports in Africa, Asia, and Europe shook up global supply chains. Rising food and energy prices coupled with stagnant salaries roused employees to make their demands heard, according to freight-forwarding agents, shipping companies, and union experts. In 2022, operations at shipping hubs were hampered by protesting or striking workers at least 38 times, according to one risk management provider. That’s more than four times higher than in 2021. [Bloomberg]
Relationships reexamined. Global trade partnerships have fostered economic growth and increased worldwide product availability. But recent events, including rising geopolitical tensions, have motivated leaders to reexamine global interdependencies. How should companies and countries adjust trading relationships, if at all? To learn where concentration in global trade exists, McKinsey senior partner Olivia White and colleagues analyzed McKinsey Global Institute (MGI) research on more than 120 countries, roughly 6,000 products, and eight million trade corridors.
Concentration creates complications. Global concentration, or when relatively few economies export a given product, can reflect and promote increased efficiency. However, the interruption of concentrated trade flows for products that are difficult to replace on short notice can be particularly disruptive. MGI research finds that for 40% of global trade, the importing economy relies on three or fewer nations for the supply of a given product or manufactured good. Find out where global trade is most concentrated and ways to reassess trading relationships.
— Edited by Belinda Yu, editor, Atlanta
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