The Shipping News: Regionalization?
August 6, 2008
NYT takes a nice long look at the global shipping industry, which has been adjusting to soaring fuel prices.
The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.
The author, Larry Rohter, uses similarly anecdotal evidence to argue that something like “near-shoring” may be making a comeback in response to the situation.
Scholars of economic globalization will recognize this as the typical global integration story moving slowly in reverse – or at least sideways – towards regionalization. Appropriately enough, the piece concludes with a quote from economist Jagdish Bhagwati, an evangelist of global free markets, expressing ambivalence about what the regionalization trend heralds for the US economy.
I couldn’t help noting that the discussion about shipping is all about tangible goods, though. What role would the Internet play in a (hypothetically) regionalizing world? Already the lowest means of moving intangible assets across vast distances, digital ICT’s were as much a cause as a result of the earlier era of economic integration. Certainly, a regional environment would look a lot different with pervasive broadband and satellite networks making it virtually costless to move information and ideas around the globe.