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Today’s Pickup: emerging economies are disrupting global trade dynamics

Good day,

About two decades ago, bilateral trade was mostly an affair between the developed countries, with 62 percent of the trade happening between the U.S., Canada, and Europe. But now, the share has come down to 47 percent and still shrinking, as the value of trade between developing economies has grown tenfold during the same time frame.

Fifty-three percent of bilateral trade now involves at least one emerging market, up from 38 percent in 1997. The number of countries where the majority of trade is with emerging markets is also up sharply, to 64 from 19 two decades ago. This shift in trade dynamics would mean developing economies will no longer have to depend on the wealthier nations for commerce. More food, energy, consumer goods, and services are flowing into the relatively underdeveloped parts of the world and bringing in the much-needed inclusive growth.

Did you know?

The U.S. Energy Information Administration on Tuesday cut its 2019 world oil demand growth forecast by 20,000 barrels per day (bpd) to 1.38 million bpd due to intensifying trade tensions between China and the U.S.


“Not hedging is the risky behavior.”

– Pat Draut, principal at K-Ratio, insisting on the need for shippers and carriers working in the spot market to trade in freight futures for exerting greater control over their costs and revenue.

In other news

Adidas ups air freight to make up for supply chain shortages

Adidas will increase its use of air freight as part of an attempt to recover from “supply chain shortages”, which executives say will affect sales growth for most of 2019. (Supply Chain Dive)

In logistics, employers scramble for workers

The number of job openings for workers in the U.S. has climbed to 7.5 million, while the number of workers hired stands at nearly 5.5 million – about 2 million below the number of available openings. (Marketplace)

Waymo and Lyft partner to scale self-driving robotaxi service in Phoenix

Waymo is partnering with Lyft to bring self-driving vehicles onto the ride-hailing network in Phoenix as the company ramps up its commercial robotaxi service. (TechCrunch)

As air freight carriers move to online pricing, forwarders call for comparison sites

Forwarders are struggling to see the benefits of online rates and bookings for air freight that are published on individual airline websites. As the carriers begin to move their pricing information online, forwarders are claiming it leads to inefficiency. (The Loadstar)

Amazon one-day shipping lifts startups serving Walmart Inc.’s pledge last month to pump $800 million into making next-day delivery the new standard upped the pressure on its brick-and-mortar rivals to spend more trying to catch up all over again. (Bloomberg)

Final Thoughts

Starbucks has partnered with Microsoft to trace the journey of its coffee beans from the farm to the store, in an attempt to connect its coffee patrons with the people who grow it. The idea is to provide a mobile application where customers can check for information on their coffee’s origin, processing and packaging centers, and Starbucks’ efforts to help the farmers lead better lives.

A lot of the coffee that gets exported is grown across economically backward countries in Asia and Africa, where the coffee industry is still entrenched in worker exploitation and forced labor. Starbucks committal to ethically sourcing its coffee beans has pushed it to create real-time visibility and traceability into its supply chain.

This project is powered by Microsoft’s Azure Blockchain Service, which traces every step of the coffee supply chain and records the information in a shared, immutable ledger that provides all the stakeholders a holistic view of the bean’s journey. Starbucks believes that apart from empowering farmers, this will help customers see the impact of their purchase in the real world and the many faces behind the coffee they love.

Hammer down everyone!

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Vishnu Rajamanickam, Staff Writer

Vishnu writes editorial commentary on cutting-edge technology within the freight industry, profiles startups, and brings in perspective from industry frontrunners and thought leaders in the freight space. In his spare time, he writes neo-noir poetry, blogs about travel & living, and loves to debate about international politics. He hopes to settle down in a village and grow his own food at some point in time. But for now, he is happy to live with his wife in the middle of a German metropolitan.

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