Executive Summary
In a world divided by geopolitics, protectionism and the effects of climate change, global trade is forging new paths. Commerce is increasingly taking place between geopolitically aligned economies, with the US moving imports away from China, the EU sharply cutting trade with Russia and China’s trade now dominated by developing economies in Asia, Latin America and Africa. A +10% rise in geopolitical distance reduces bilateral trade by -2%, underscoring the importance of political alignment and adaptive supply chains. This geopolitical fragmentation has coincided with a resurgence of protectionism. In the past year alone, trade restrictions have tripled to affect an estimated USD2.7trn of merchandise – nearly 20% of global imports – fueling friendshoring and regionalization. More than half of the global trade growth we forecast for 2025[1] is based precisely on rerouting of US imports from China, frontloading of shipments ahead of higher US tariffs and trade diversification, which together account for 1.3pp of overall growth of +2%. Looking ahead to 2026 and 2027, we expect global trade of goods and services to slow down to +0.6% and +1.8%, respectively, highlighting the delayed impact of the trade war and the challenges that current trade infrastructure will have to manage.
Established routes still carry more than half of global trade. However, global logistics have become more vulnerable to shocks since the pandemic and a significant supply disruption can result in a temporary doubling of container freight rates. This “core” category includes the Suez Canal (12% of global trade), Malacca (40%) and the Strait of Hormuz (roughly one-fifth of world oil and 20% of LNG), as well as inland and coastal trade arteries (eg. Europe's Rhine and Danube, China’s Yangtze), megaports (Shanghai, Ningbo, Shenzhen, Guangzhou in China; Los Angeles, Long Beach, Oakland in the US; Rotterdam, Antwerp-Bruges and Hamburg in Europe) and airports (eg. Hong Kong, London Heathrow, Dubai and Frankfurt). However, our proprietary chokepoint scorecard shows that Asia and Europe’s hubs are increasingly at risk of political or climate shocks. The Suez and Panama canals top the list of high-risk chokepoints, constrained by congestion and limited redundancy. Asian hubs lead on capacity and reliability but face mounting political risk; Europe’s ports boast strong infrastructure and redundancy but rising climate exposure, particularly in the south. Midway hubs, from the Middle East to Southern Africa, act as efficiency anchors yet remain vulnerable to political and environmental stress. In the Americas, reliability is high but capacity tightens along Atlantic and Gulf coasts. Before the Covid-19 pandemic, oil prices were the main driver of container freight rates. However, since Q4 2020 and the post-pandemic supply-demand tensions, container volumes have become a key factor behind freight rate dynamics. We find that a supply gap of 20% of container volumes (equivalent to almost twice the volume passing through the Suez Canal) would lead to a doubling of freight rates year-over-year. Furthermore, this new paradigm also means that corporates have to deal with much more volatile transportation costs: volatility of global container rates has tripled since the pandemic.
Meanwhile, new routes are emerging to increase supply chain resilience, avoid cost pressure and amid increasing South-South connections. Since Russia’s 2022 invasion of Ukraine, major shifts have taken place along trade routes connecting China and Europe, and India and Europe. Middle Corridor freight has jumped, with the volume of transported cargo rising by +86% y/y in 2023, and Kazakh rail volumes by +63% in 2024. Detour routes around the Cape of Good Hope have also resurfaced as reliable though costly substitutes for Red Sea transits, while North American nearshoring corridors and South-North corridors aiming to connect South Asia to the European market (including the India-Middle East-Europe Corridor) are also scaling up. In Latin America, one of the main emerging routes in the Pacific-Latin American axis, symbolized by Peru’s new Chinese-financed Chancay Port, which will channel critical minerals and agribusiness exports toward Chinese and ASEAN markets. This exemplifies the Belt and Road’s second phase – “BRI 2.0” – focused on targeted, commercially oriented assets in regions aligned with China’s commodity interests. However, governance and major-power strategic interests may limit usage of these emerging routes, creating redundant, underutilized terminals – a risk operators and investors should bear in mind.
For now, conditional routes such as the Arctic Northern Sea Route or Latin American interoceanic lines remain strategic bets, but bankability is distant without substantial de-risking. Moscow is modernizing Arctic ports and building nuclear icebreakers and digital traffic controls, envisioning a year-round Asia-Europe gateway (projecting Arctic LNG to 200mn tons by 2030). The Arctic offers long-term potential (especially for energy), but is currently an uncertain China-Russia sideline rather than a mainstream corridor as Western participation remains minimal due to sanctions, cost and seasonality. Africa, Middle East and Latin America’s routes are also conditional.
Amid these shifts, new trade and manufacturing hubs are redrawing the global map. Our updated ranking of Next Generation Trade Hubs for 2025 shows economies repositioning across three tiers – multimodal, logistical and intermediate – as tariffs, sanctions and supply-chain shifts reshape global flows. The UAE (#1) and Malaysia (#3) lead as consolidated multimodal powerhouses, anchored by world-class ports Jebel Ali and Port Klang linking Asia, the Middle East and Europe. Vietnam leaps to #2, buoyed by surging exports and a new tariff deal with the US that cements its role at the heart of Asia’s manufacturing re-route. Saudi Arabia (#4) records the sharpest rise, up 11 places, as lower tariffs (~4%) and growing non-oil exports expand its trade potential. Kazakhstan (#16) joins the top ranks as a core logistical node, with Khorgos and Nur Zholy hubs funneling more Eurasian freight. Further down the list, Thailand (#8), India (#12) and South Africa (#23) lag on connectivity despite world-class terminals such as Laem Chabang and Tanger-Med, while Indonesia (#11) and Bangladesh (#15) face investment gaps exceeding USD1trn. Together, these hubs chart a trading system that is broader, more regional and unmistakably multipolar.
With a trade infrastructure gap of over USD10trn by 2035, and USD7.1trn concentrated in emerging markets, financing must adapt accordingly in order to keep freight rates in check. Financing models are bifurcating: stable, low-yield assets in incumbent routes versus high-risk, high-return projects in scaling or conditional corridors. Multilateral and national development banks remain the backbone, catalyzing a 23% rise in private co-investment in emerging markets in 2023, while Gulf sovereign funds and regional platforms such as Africa50 are emerging as active strategic investors. Nearly 90% of new infrastructure funds launched since 2024 carry a climate or ESG mandate, signaling a structural shift toward green and blended finance. Advanced economies continue to dominate through deep capital markets and mature PPPs, while programs like the EU’s Global Gateway (EUR300bn) and the G7’s PGII (USD600bn) aim to crowd in private capital in the Global South. China’s BRI 2.0, with an additional USD100bn pledged in 2023, remains a central force, now focusing on smaller, greener projects. Yet financing remains uneven: low- and middle-income countries attract only 20% of total private infrastructure investment.
Looking ahead to 2030, corridor finance will evolve into programmatic, blended, climate-aligned platforms, integrating ports, energy, digital and transport assets. Guarantees, ESG-linked instruments and standardized PPP frameworks will underpin new trade routes such as Lobito, ASEAN and the India-Middle East-Europe link. The next decade’s winners, governments, firms and investors alike, will be those who harden incumbents, de-risk at scale and avoid stranded assets, turning resilient connectivity into a core source of global competitiveness.