The World Is Round

This is from Will Soaring Transport Costs Reverse Globalization? by Jeff Rubin and Benjamin Tal at CIBC World Markets Inc.

"The duration of a typical sea voyage from China to North America is four weeks. Including inland costs, shipping a standard 40-foot container from Shanghai to the US eastern seaboard now costs $8,000. In 2000, when oil prices were $20 per barrel, it cost only $3,000 to ship the same container. But at $200 per barrel, it will soon cost $15,000 in transport costs to ship from China to the US eastern seaboard"

"With the cost of trans-oceanic freight surging following the 1973 OPEC shock and into the early 1980s, the share of non-petroleum US imports from Europe and Asia fell by a stunning 6 percentage points in little over a half decade, while the share of imports from the Caribbean and Latin America rose by a comparable amount."

"A surprisingly high percentage of Chinese exports to the US fall in the later category. Furniture apparel, footwear, metal manufacturing, and industrial machinery—all typical Chinese exports, incur relatively high transport costs. And there is already evidence that Chinese exports of freight-intensive goods are already beginning to slow under the pressure of rapidly rising transport costs."