From globalization to continentalization
However, disruptive factors such as the pandemic, material shortage caused, among other reasons, by a pork cycle, and finally the actions of insane dictators result in a misalignment of this system. The world has been shaken and needs to get its balance back in a new situation.
There is also a dark side of globalization. A sophisticated global supply chain, designed to squeeze out maximum profit, lures the economy and industry into buying material and components at the lowest price, even in the most remote corners of the world. This situation is quite normal, and everyone has to deal with it in order to stay competitive. It is not bad per se, because we gain new perspective. Yet the burden it creates for our environment is immense: numerous ships, planes and trucks produce emissions polluting our planet.
A glance at the live and traffic shows its extreme density and the related CO2 emissions.
Panama Canal: a land bridge between North and South America.
(source: Picture alliance / dpa).
Travel by air allows people to travel the entire globe in just a few hours. Such possibilities have long been part of everyday's life and a permanent feature of public transport.
Climate conferences collide with local interests, which delay the implementation of necessary environmental measures, despite good intentions. Only tangible economic interests will constitute a convincing argument for a sustainable solution. Various parameters are already pointing in this direction. Deliveries with sea freight take 2-3 times longer than they did before 2020, and cost 4-5 times more. The CEO of a large German logistics group told me recently that while it used to be impossible to earn money with sea freight, today the situation is quite the opposite, “it's pay day!”. According to Alphaliner, "the 10 largest shipping lines made $ 115-120 bln profit last year”. On the other hand, these tremendous cost increases and much longer delivery times are a real strain for companies that operate globally like CEDES. Moreover, doing business in some regions became unpredictable due to arbitrary and megalomaniac behavior of autocrats, resulting in war.
All of the above examples demonstrate the limitations of globalization. Many companies move out of unsafe countries and build production plants on the continent where their main business is, or, at best, freeze their investments in unstable regions. This results in a sharp decline of GDP in such countries. While it will not open the eyes of those misdirected rulers, it will clearly show the great advantage of the free, democratic world with all its boundless creative power. Continentalization will not solve our problems, but it will contribute to reducing the costs and making logistics more predictable. It will also not be the ultimate solution to environmental problems, but it will help to alleviate them.
CEDES will also follow this path and adapt its global supply chain. We will remain reliable partners for our customers, just like we did throughout the recent crises – we are very happy to have managed them together.
CEO CEDES Group
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