Where are the ‘choke points’ in global trade – and can they be overcome?

While this year has been a watershed for global trade – with the first half of 2025 bringing with it a US$500 billion expansion in value, according to UN Trade and Development – many countries are forging new economic pathways in response to rapid, unpredictable shifts in geopolitics, heightened protectionism and extreme weather events influenced by climate change.\nIn a recent report from Allianz Trade, the insurer predicted that in 2026 and 2027, the year-on-year global growth of trade of goods and services is set to slow to 0.6 per cent and 1.8 per cent, respectively – a decline compared with the 2 per cent observed for 2025 so far – highlighting the delayed impact of the trade war and the limitations of current trade infrastructure.\nIn this explainer, the Post examines these “legacy” trade routes, their choke points and what new routes could bypass or surmount them, based on the Allianz analysis released last week.\nWhat are the choke points in global trade routes?\nAmong the old routes – which carry 50 to 60 per cent of the global merchandise trade, according to Allianz – the Suez and Panama canals top the list of high-risk choke points, constrained by congestion and limited redundancy, according to a proprietary scorecard provided in the report.\nBefore the Covid-19 pandemic, oil prices were the main driver of container freight rates, said Ana Boata, the head of economic research at Allianz and lead analyst for the report, but now geopolitics is taking primacy.\n“Asia and Europe’s hubs are increasingly at risk of political or climate shocks – 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,” she added.\n“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 the Atlantic and Gulf coasts.”\nGlobal trade depends on a limited number of strategic corridors and choke points, which are narrow passages or logistical hubs that concentrate flows of energy, food and manufactured goods, such as the Suez and Panama Canals, air freight hubs like Hong Kong International Airport and inland connectors linking ports, railways and roads.\n\n\nHow will new trade growth be financed?\nFinancing must adapt to keep freight rates in check, Allianz said, with an estimated trade infrastructure gap of over US$10 trillion by 2035, and US$7.1 trillion concentrated in emerging markets.\n“Advanced economies continue to dominate through deep capital markets and mature public-private partnerships, while programmes like the EU’s Global Gateway and the G7’s Partnership for Global Infrastructure and Investment aim to crowd in private capital in the Global South,” according to Boata.\n“China’s Belt and Road Initiative 2.0, with an additional US$100 billion pledged in 2023, remains a central force, now focusing on smaller, greener projects,” she added, noting that financing “remains uneven” because low- and middle-income countries attract only 20 per cent of total private infrastructure investment.\nLooking ahead to 2030, corridor finance will evolve into programmatic, blended, climate-aligned platforms, integrating ports, energy, digital and transport assets, the report noted.\nFinancial guarantees, instruments linked to environmental, social and corporate governance goals and standardised public-private partnership frameworks will also underpin new trade routes such as Lobito in Angola, Southeast Asia and the India-Middle East-Europe link, Allianz wrote.\n“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,” Boata said.\nWhat new trade hubs have emerged?\nNew trade and manufacturing hubs are redrawing the global map, as tariffs, sanctions and supply-chain shifts reshape global flows, the report explained, and these hubs chart a trading system that is broader, more regional and “unmistakably multipolar”.\n“The UAE and Malaysia lead as consolidated multimodal powerhouses, anchored by world-class ports Jebel Ali and Port Klang linking Asia, the Middle East and Europe,” Boata said. “Vietnam leaps to No 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.”\nOther places such as Saudi Arabia recorded the sharpest rise, as lower tariffs and growing non-oil exports expand its trade potential, she added. Kazakhstan joins the top ranks as a core logistical node, with its Khorgos and Nur Zholy hubs handling more Eurasian freight.\n