Near-Shoring Talk Fades as Global Supply Chains Stretch, Says DHL

Why It Matters

The findings signal that globalization’s resilience outweighs near‑shoring pressures, shaping investment decisions and policy frameworks worldwide.

Key Takeaways

• 2025 trade distance hit 5,010 km, record high.
• Greenfield FDI averaged 6,250 km, longest ever.
• US‑China trade share fell to ~2% in 2025.
• India and Vietnam rise as alternative supply hubs.
• Global trade projected 2.6% annual growth to 2029.

Pulse Analysis

The latest DHL Global Connectedness Index overturns the prevailing narrative that geopolitical friction is forcing firms to retreat to regional supply chains. By documenting the longest average trade routes on record, the report underscores that manufacturers are still seeking cost‑effective, high‑capacity partners across continents. This shift is less about shortening distances and more about rebalancing risk, with emerging economies like India and Vietnam gaining prominence as viable alternatives to traditional hubs.

For businesses, the data translates into concrete strategic adjustments. Companies are allocating capital to AI‑enabled logistics and digital twins, which accounted for 42 % of trade growth in early 2025, to manage longer, more complex routes. The decline in US‑China trade volumes, while notable, represents a modest slice of total flows, suggesting that supply‑chain diversification is driven by broader market dynamics rather than outright decoupling. Firms that embed flexibility through multi‑regional sourcing stand to capture efficiency gains while mitigating geopolitical shocks.

Looking ahead, the projection of 2.6 % annual trade expansion through 2029 signals a steady, albeit modest, growth trajectory. Policymakers should therefore focus on facilitating cross‑border infrastructure, digital standards, and investment incentives that support a globally integrated network. The resilience of globalization, as highlighted by DHL, offers a roadmap for enterprises aiming to balance cost, speed, and risk in an increasingly interconnected world.