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Global Economy

Camp formation instead of globalization

In the logistics and transport industry, there are increasing signs of a reversal in the globalization of the world economy. This is shown by the results of a recent study by the market research company Price Waterhouse Coopers (PwC).

China is cutting back commitments

According to the experts at PwC, mergers and acquisitions in the transport sector are an indicator of international integration in the global economy. China in particular has played an increasing role in controlling the flow of goods and their transport routes in recent decades.

A trend that now seems to be reversing: In the first half of 2022, Chinese logistics companies were involved in only 15 percent of all global takeovers and mergers, the lowest level in ten years. "Tendencies towards deglobalization can already be observed," says PwC partner André Wortmann. In addition, there is a risk that a counterweight to the Western countries could form under Chinese and Russian leadership. "As a result, Western transport and logistics companies could become more reluctant when it comes to deals or investments in China."

The study also shows a declining trend towards strategic alliances and joint ventures in the industry in all regions. According to PwC, they only occur occasionally and in relation to specific sectors such as autonomous vehicles or alternative fuels.

Possible "formation of the Eastern Bloc"

According to the study, which PwC conducted together with its strategy consultancy Strategy&, the decline in transaction activities with Chinese participation is also attributed to the ongoing Covid 19 crisis in China. However, it also speaks of "concerns about a possible formation of the Eastern Bloc under Chinese and Russian leadership".

This scenario assumes that the war in Ukraine will continue even longer and lead to long-lasting sanctions against Russia. It also suggests that the world faces an extended period of economic uncertainty and reduced trading activity.

Number and volume of transactions down

In the logistics and transport industry, the wave of concentration has receded after last year's record. According to the study, a total of 129 transactions with a total value of almost 126 billion US dollars were announced in this sector worldwide between January and June. One mega deal stands out: The financial group Blackstone and the Italian Benetton Group want to take over the majority of the Italian Atlantia for 52 billion dollars. According to PwC, there were 322 transactions in the industry worldwide in 2021 with a total value of around $219 billion.

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