International Trade and the Cost of Transport

In reading a very interesting posting from Stratfor about “Australia’s Strategy” (I particularly liked the metaphore “Think of Australia as a creature whose primary circulatory system is outside of its body”), I began to thing about the captioned and how it might be of interest. There are different costs to transportation, as you can see from the below (I have left air freight off because it is horrendously expensive compared to marine, rail or truck):

(taken from here)

Another way to look at this – Cargo Capacities and Energy Efficiency:

(taken from: A Modal Comparison of Domestic Freight Transportation Effects on the General Public)

Or, Equivalent Units & Carbon Footprint:

In fact, according to another Stratfor monograph, “but in the petroleum age in the United States, the cost of transport via water is roughly 10 to 30 times cheaper than overland.”

So, for sourcing, logistics and supply chains, this cost is not inconsiderable. This brings me to this remarkable presentation on additional transportation costs by Stephen M. Carmel, Senior Vice President of Maersk Line, given August 3rd, 2011 at the Commander Second Fleet Intelligence Symposium. It involves costs associated with Pirates vs. the governments of the USA and US states (mainly California, my former home). An opinion piece on the same can be found from the always intriguing Belmont Club – but Mr. Fernandez brings us to pirates in suits: congress-critters, World Bank, the UN, lawyers, lobbyist groups and influence peddlers. You may not agree with him, but you have got to love his Animal House reference…

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