The global market is an unpredictable partner, often shrouded in complexity and uncertainty. For businesses navigating international cargo transportation, it’s essential that you stay ahead of trends in global trade. This will empower you to make informed investments, form valuable partnerships, and brace for potential challenges.
At Tideworks, we are committed to providing terminal operators with the insights and tools they need to prosper in today’s dynamic market.
In this article, you’ll find a comprehensive summary of the trends shaping the industry. Here’s the key takeaway: while global trade is expected to grow through 2025, shifting geopolitical dynamics introduce a layer of uncertainty. Keep reading to learn more.
Prediction 1: Trade Expected to Rebound from 2023 Lows
It’s no secret that the last few years have been difficult for global trade. Between elevated interest rates and the effects of inflation, the global market slammed its brakes on trade growth in both 2022 and 2023. In fact, global trade saw a rare contraction of 3% in 2023.
However, global markets began to rebound promisingly in 2024, and if current trends hold true, this growth is expected to continue throughout 2025. Qatar National Bank attributes this growth to three main factors:
- Leading indicators like the Dow Jones Transportation Average are pointing towards increased trade volume.
- New policy measures are being implemented in China that are expected to stimulate the Chinese economy, and this could lead to broader economic invigoration.
- Interest rates from major banks are expected to become less restrictive for businesses.
Should these factors continue as expected, they indicate a promising year for global markets in 2025.
Prediction 2: Interest Rates Projected to Normalize
Because inflation has begun to cool off, financial policymakers—like the Federal Open Market Committee (FOMC)—are expected to lower interest rates, thereby making the overall economy more accommodating for trade.
In July of 2023, the FOMC set its interest rates at a staggering 5.5% to combat runaway inflation, and they’re currently sitting somewhere between 4.75% and 5%. According to Forbes, though, you can reasonably expect that short-term interest rates will come down to around 3.5% by the end of 2025.
Be aware, though, that there is some uncertainty in this projection. Forbes considers interest rates between 2.75% and 4.25% possible. This uncertainty is partially due to an unclear job market and the ever-present prospect of renewed inflation.
Prediction 3: Accelerated Trade Growth Expected in China and Africa
Chinese authorities have begun to implement a large number of aggressive financial measures to bolster the Chinese economy. This is in response to below-average trade projections for 2024. As these policies take hold, they’re expected to catalyze economic growth broadly throughout East Asia, thereby accelerating trade for the entire global market.
Meanwhile, Africa’s exports were projected to grow faster throughout 2024 than any other region. And while the World Trade Organization expects the country’s export growth to slow again in 2025, its world GDP at market exchange rates is expected to exceed all other regions in the same year.
These forecasts indicate that China and Africa can both be expected to play an important role in shaping global trade throughout 2025.
Prediction 4: Geopolitical Dynamics Make All Predictions Tenuous
Clearly, most indicators point to a bustling global market in 2025, but The World Trade Organization listed geopolitical dynamics as a key downside risk for the near future.
For example, conflicts like the wars in Ukraine and the Middle East put considerable question marks on the otherwise sunny forecast. This is because regional hostilities can majorly disrupt trade routes and overturn economies, both of which impede global trade.
Similarly, political dynamics between the US and China resulted in the slowing of trade between the two countries in 2023. These countries have the two largest economies in the world, so trade difficulties between them can make waves in global markets.
These conflicts don’t entirely mitigate the otherwise positive outlook for the future, but they have the potential to upend projections if they escalate.
Meet These Opportunities and Challenges with Tideworks
The outlook for global trade looks very promising, if a little uncertain. In addition, the terminal industry itself is rapidly evolving due to the advent of AI and smart terminal technology, meaning there are many factors to consider independent of the global market.
This makes it essential to stay ahead of the curve by adopting cutting-edge software and leveraging the latest industry insights, rather than relying solely on long-term projections. Embracing modern technology and staying informed ensures your terminal operations remain agile, enabling you to adapt swiftly to market changes and maintain peak performance.
We can help you there.
Tideworks terminal operating systems and applications are designed with tomorrow’s cargo transportation ecosystem in mind, so we’re uniquely positioned to help you navigate whatever the future holds. To learn more about how our products and services can optimize performance and futureproof your terminal, schedule a consultation today.