Shipping Costs Reduced Global Economic Growth
Creating the globalization ideology provides an extensive overview on how economies will work to sustain mutual benefits. However, the increased prices of oil which primarily fuels manufacturing and a large portion of shipping of goods and services have hit the “globalized” market tremendously that trades between developed and developing countries were compromised. The issue at hand for this assignment relates to the article in of International Herald Tribune published on August 2 2008 titled “Shipping Costs Start to Crimp Globalization”.
In an overview, the article presents last year’s condition of exorbitant prices of fuel in the world market. This increased value has made it very hard for many businesses around the world to conduct export and import transactions due to the rising shipping costs powered by oil (Rohter 1).
Some of the key points that were raised as concerns for the issue are the following; with increased oil prices, it was too costly to ship items either inward or outward of a country, manufacturers which have manufacturing plants outside of the home country were not able to recuperate from their costs of production due to an increased price in shipping, consumers paid higher prices for normal goods resulting to a slowdown in economic market spending.
On a personal opinion, this international issue is of great concern because high oil prices that influenced shipping costs tend to reduce market activities in the world arena, increases the probability of people losing jobs and lead to an imbalance in world economic growth where both rich and developing countries were not be able to accommodate more growths in their respective industries.
Rohter, Larry. “Shipping Costs Start to Crimp Globalization.” International Herald Tribune 2 08 2008 1. 3 Feb 2009 <http://www.iht.com/articles/2008/08/02/business/03global.php>.