Cost pressures are driving manufacturers to increasingly offshore to low cost economies. This in turn is increasing international trade and freight movements. How does this impact the major logistics hubs in the world, and will there be a need for more hubs?

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Step-by-step explanation

Answer:

Increased offshoring of activities in low-cost activities has led to an increase in productivity in manufacturing firms. This has then led to increasing international trade among countries worldwide due to the rise in output produced. An increase in the products made means more raw materials are needed to produce the goods.

Due to such factors, this has led to a positive impact on logistics hubs since they are needed to transport raw materials and finished goods. Increased demand for logistics hubs leads to increased revenues, causing them to expand and grow.

Moreover, the increased international trade leading to increased demand for more logistics hubs shows a need for more logistics hubs to meet the international demand for logistics services internationally.