Mexico Falls in Global Connectedness Ranking: DHLBy Jorge Ramos Zwanziger | Tue, 07/20/2021 - 12:59
DHL’s ‘Global Connectedness Index 2020: The State of Globalization in a Distancing World’ report analyzes the impact of the pandemic on supply chains, in partnership with researchers from the New York University’s Stern School of Business. According to the index, Mexico fell in the global connectivity ranking due to the impact of the pandemic.
“Grounded airplanes and closed borders have disrupted global travel and supply chains. The crisis has been a serious stress test for globalization – one that sparked initial speculation that this could mark the ‘end of globalization’,” explained DHL.
This is the seventh consecutive year in which DHL does the index, where it ranks 169 countries and territories based on four specific areas: international flows of trade, capital, information and people. According to the ranking, Mexico is the fifth most connected country in the Americas.
Antonio Arranz, CEO of DHL Express Mexico, explained that Mexico often does not move in the connectivity index as it is extremely dependent on the US, particularly in commercial terms, according to T21. About 73 percent of Mexico’s exports go to its northern neighbor. Moreover, most of Mexico’s domestic consumption is concentrated in very few cities, which hold most of its population, making demand hubs limited. “We have a strong dependence to the US, but the good news is that we hope that this relationship will remain solid and grow strongly. In terms of ease of doing business and logistics performance, we are still in the middle of the table; we are behind Colombia and we have work to do,” Arranz said in a virtual conference, according to T21.
DHL’s report identified several opportunities for Mexico. The first is the international political climate and how it relates to connectivity and supply chains. As tensions arise in the international scene, “they could become opportunities for other countries, as supply chains shift due to geopolitical pressures,” reads DHL’s report. For example, Vietnam and Mexico have sought to present themselves as attractive alternatives to China as tensions between the Asian giant and the US arise. Another opportunity comes from the USMCA agreement that took effect in 2020, with Canadian and US companies now having a better opportunity to relocate certain operations into Mexico.
Mexico, claims DHL, can become even more important in terms of global connectivity, despite its fall in the ranking.