Thursday, April 19, 2012

How the Shipping Container Made the World Smaller and the World Economy Bigger

Throughout the many interesting points that were raised by Marc Levinson in Chapter 1, the most interesting to me was how the ability to be able to support the transferring of the shipping containers furthered the emergence of some now very booming cities such as Seattle and Busan, while at the same time it took away much of the shipping traffic from cities such as New York City and Liverpool. Not only did the container revolution help cities grow due to this reason, it also helped other cities such as Hong Kong and Los Angeles rise into huge industrial cities because of the sudden and dramatic decrease in shipping expense, whether it was shipping raw materials in or shipping finished goods out. In addition to the this change lowering prices due to the shipping side of the equation, it also helped to lower the prices due to shipping firms being able to go from "armies" of workers to smaller, sleeker specialized groups who were able to ship through constantly expanding supply chains.

The connection between globalization and shipping containers is relatively obvious on some levels. It is very easy to understand that the ability of the world to be able to transport raw materials and finished goods far more efficiently around the world directly connects to the idea of making the world a "smaller place". By being able to do what would once take vastly more man power, as well as capital, with a much smaller and more productive system causes an obvious reduction in shipping costs and thus creates an environment that is much more world-trade friendly.

When considering the national income and employment of a country we must look at the equation for G.D.P. which equates to G.D.P.= Consumer spending + Investment spending + Government spending + Net Exports-Imports. In terms of the short run the container era led to a large increase in consumer spending, due mainly to the abundance of much cheaper goods now. In accord with the rise of consumer spending would also come to a large increase in investment spending due to the start up cost of purchasing the shipping containers. These two factors combined would lead to an overall rise in the total G.D.P. of the participating country. On the other hand in the long rung, it would be reasonable to assume that employment would decrease due to the new ability to do what once took a large number of people to do with a few specialized individuals. Additionally, the ease of world trade would lead to an increased number of exports, so if a nation was not able to keep up with the rest of the world in terms of trade this nation would also experience job loss due to the increase in goods coming from other countries, instead of from within.

2 comments:

  1. Nice blog post! I would like to thank the author of this blog post for sharing such an interesting blog about how the shipping container made the world smaller and the world economy bigger.

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