Rising trade costs despite falling oil prices

by

Oil has fallen to close to $60 per barrel, but Marc Levinson, author of The Box, says that transportation costs are likely to slow globalization. He cites:

  • Ports unable to handle the next generation of massive container ships
  • Intranational ground transportation systems, notably highways and rail, that are increasingly congested
  • “The cost of international trade has been kept artificially low because shippers do not pay for the environmental harm they inflict. Regulators are finally catching up.”

But how should we interpret Levinson’s concluding paragraph, where he writes that “in retrospect, globalization will likely appear not as an inexorable trend but as a temporary stage in economic development” while also conceding that “slower, costlier, and less certain transportation will not put an end to the growth of international trade”?

Advertisements