Geopolitics, inflation and trade – What's next for international logistics?
Geopolitical tensions are increasingly influencing how and where goods are produced, traded and transported. From tariffs and industrial policy to energy prices, shipping routes and strategic dependencies, international logistics is becoming closely intertwined with geopolitics. What does this changing environment mean for companies operating in and through the Netherlands?
During the HIDC webinar Geopolitics, inflation and trade – What’s next for international logistics?, Albert Jan Swart, Sector Economist Industry, Transport & Logistics at ABN AMRO, and Bart Banning, Sector Expert Mobility at ABN AMRO, shared their perspectives on the changing global economic landscape and its implications for logistics. The webinar was moderated by Remco Buurman, CEO of HIDC.
Free trade can no longer be taken for granted
One of the central messages of the webinar was clear: the era in which companies could largely separate geopolitical considerations from their supply chain decisions is disappearing.
China, the United States and the European Union are increasingly competing for economic and geopolitical influence. Semiconductors, AI, critical raw materials, energy, supply chains, ports and shipping routes have consequently become part of foreign and industrial policy.
This development did not start yesterday. Over the past decade, initiatives such as China’s Belt and Road Initiative and Made in China 2025, US trade restrictions and semiconductor sanctions, Brexit, European strategic autonomy and successive trade measures have gradually changed the environment in which international companies operate.
More recently, wars and geopolitical tensions have further accelerated this development. The result is a global trading system in which tariffs, sanctions, industrial policy and strategic interests increasingly influence international flows of goods.
For logistics companies, this means that geopolitical developments are no longer simply background noise. They can directly affect trade routes, cargo flows, costs and customer decisions.
Shipping has become part of geopolitics
The maritime sector illustrates this development particularly well. Shipping has increasingly found itself at the centre of foreign policy, with sanctions, trade restrictions and security concerns affecting both shipping companies and international routes.
At the same time, ports themselves have gained strategic importance. Chinese companies, for example, have developed an extensive global network of interests in container terminals.
For companies dependent on international supply chains, this adds another dimension to supply chain management. Decisions about sourcing, transport routes and logistics partners increasingly need to take geopolitical exposure into account alongside traditional considerations such as cost, speed and reliability.
European industry under pressure
Another important theme was the position of European manufacturing.
The Dutch chemical industry provides a striking example. Its output is currently around 20% below its 2021 level. High European natural gas prices following Russia’s invasion of Ukraine have put the sector under considerable pressure. At the same time, increased competition from Chinese chemical products is adding to the challenge.
Germany, one of the Netherlands’ most important trading partners, is also facing significant pressure. Its manufacturing sector is confronted with high energy costs, while the automotive industry faces increasingly strong competition from Chinese manufacturers.
These developments matter directly to logistics. Changes in European industrial production inevitably influence the type and volume of goods moving through European ports, warehouses and transport networks.
One possible consequence highlighted during the webinar is a shift from bulk imports towards containerised imports if more industrial products or intermediate goods that were previously manufactured in Europe are imported instead.
The Netherlands also stands to benefit from new growth
The outlook is not entirely negative.
While parts of European manufacturing are struggling, investment in AI and digital infrastructure is creating economic activity from which the Netherlands is benefiting. This illustrates an important point: geopolitical and technological shifts do not simply reduce trade. They also change its composition and create new flows and opportunities.
For the logistics sector, understanding where new industrial and investment activity is emerging will therefore become increasingly important.
At the same time, the investment boom in AI infrastructure and higher defense expenditure come with another economic consequence: upward pressure on long-term interest rates. Together with fiscal pressures in several European countries, this is contributing to higher financing costs – an important consideration for a capital-intensive sector such as logistics.
Resilience increasingly comes with a price
The discussion also turned to how logistics companies and their customers are responding.
Recent years have already forced the sector to become more flexible and creative. Geopolitical conflicts, disruptions to major shipping routes and rapidly changing trade policies have demonstrated the vulnerability of highly optimised global supply chains.
One expectation is that continued geopolitical uncertainty will lead to more strategic partnerships across supply chains. Relationships between shippers, logistics service providers and other supply chain partners may increasingly be built around long-term reliability, resilience and partnerships rather than primarily around the lowest possible cost.
But resilience is not free.
More robust logistics chains may require shippers to maintain additional transport capacity and higher inventories. In other words, some of the efficiency gained through lean, tightly optimised supply chains may have to be traded for greater security and flexibility.
Climate change adds another dimension. As extreme weather increasingly affects infrastructure and transport networks, renewed attention to modal shift and alternative transport options may become part of companies’ resilience strategies.
What should logistics companies take away?
Perhaps the most important conclusion from the webinar is that geopolitical uncertainty should no longer be regarded as a temporary phenomenon.
Competition between China, the United States and Europe is likely to continue, while semiconductors, AI, energy, critical raw materials, shipping routes and supply chains will remain strategically important.
For companies active in international logistics, this calls for a broader view of supply chain strategy. Cost and efficiency remain important, but resilience, strategic partnerships, flexibility and awareness of geopolitical exposure are becoming equally relevant.
The logistics sector has demonstrated repeatedly in recent years that disruption can drive creativity and adaptation. The next challenge is to turn that ability to respond into a more structural approach: building supply chains that can continue to function in a world in which geopolitical change has become part of everyday business.
