Friday, October 22, 2010

The low, low financial cost of global transportation

Fascinating blog post by Ethan Zuckerman: "The ley lines of globalization", in which, with the aid of Maersk's online shipping rates calculator, he discusses the cost of shipping various goods from point A to point B on the globe.

It turns out, for example, that it costs just $0.18 to ship a liter of water from Suva, Fiji, to Cambridge, MA, of which just $0.15 is for the literal "shipping" from Fiji to Philadelphia, with the remaining $0.03 consumed by truck transportation to Massachusetts. This explains why it can make financial sense to bottle water in Fiji for consumption on the other side of the world. (Whether it makes sense carbon-footprint-wise is of course a different question.)

Interestingly, Zuckerman finds that since there is much more demand for goods from China elsewhere in the world than there is for goods from elsewhere in China, it costs much less to ship something to China than the other way around.

The low cost of global shipping also helps explain why it may make financial sense for various groups to collect books, shoes, etc. in the United States for distribution in developing countries. Again, there are other considerations that may make this a bad idea (Are the donations useful and appropriate? Do they displace or undermine local production? And is paying for those transportation costs the best use of that money? What about the carbon footprint?), but if it costs little more than $0.50 to get a pair of shoes from, say, Cambridge, MA to Mozambique, that may well be worth doing.

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