A world connected more than ever before sees expat populations settling in every part of the world. India (17.5 million), Nigeria (17 million), and Mexico (11.8 million) are the three largest expat groups around the world. Whilst B2B globalized trade is on the decline, a new era of C2C trade may be growing, whilst unable to demand the huge volumes the B2B industry does it is a growing segment of world trade that provides opportunities for small community-based freight forwarders.

Notable examples of these opportunities are in the most diverse economies in the World, namely The United Kingdom, The United States, France, and now ever increasingly countries in the middle east with global cities such as Dubai and Doha. In the UK’s 2021 Census, 1.1 million individuals identified as Caribbean. The Caribbean community has a long tradition of sending ‘Barrels’ back to families who remain on the volcanic islands. These Barrels tend to be 50-220 Litre plastic drums filled to the brim with goods and presents for the families back home, a combination of clothes, food, and items with a strong sell-on value back in the homeland. This is evidence of trade relationships driven not by business activity, but rather individuals.

Modern multicultural communities are also now better connected to the homeland than ever before. This is allowing expats to purchase goods either directly or through a friend/family member abroad very easily on websites or using messenger apps such a WhatsApp. 1.6 million of participants of the UK’s 2021 census identify as Pakistani, this population has created a strong trading bond between the two countries which looks set to grow and grow following Brexit. Pakistan’s Exports to the UK totalled $2.1bn in 2021 and The British High Commissioner to Pakistan forecast this to double by 2025.

There is also evidence that these new cultural connections around the world are driving up FCL volumes. In January 2023, the World Economic Forum identified used car exports to Africa as the opportunity of the decade. Between 2015 and 2019 the global export of used cars increased from 3.4 million to nearly 5 million with the largest exporters being the US, Europe, Japan, and South Korea. Used cars are often shipped by African expats living in Europe to family members who can use the car or sell it on whole or in parts. This requires full containers and is a growing source of demand in the shipping industry between Europe and West Africa. Critics do however recognize that cars sent abroad are often old high polluting models and these trade flows discourage the growth of new car production in the destination country.

In conclusion, whilst globalisation appears to be on the decline for B2B trade, a new world with huge diasporas spread across the globe and a digital world to keep individuals connected to family members and businesses in the homeland looks set to play a bigger role in building and maintaining some of the world’s most valuable trading relationships. The industry must adapt to understand and meet the needs of these communities whilst opening up big opportunities for community-level and family-run freight forwarders, who will keep the next generation connected to their roots.

Author: Nathaniel Donaldson

Source: Ti Insights

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