Untethered trade

Something we don't often recognize is how much the Internet has joined steamships, railroads, aircraft, trucks, and pipelines as a primary mode of transport. Indeed, for a steadily expanding range of digitized products and services, the Internet is now the preferred delivery mode

By ·

Something we don’t often recognize is how much the Internet has joined steamships, railroads, aircraft, trucks, and pipelines as a primary mode of transport. Indeed, for a steadily expanding range of digitized products and services, the Internet is now the preferred delivery mode. 

Jock O’Connell, Beacon Economics’ International Trade Adviser, said this development raises some interesting but seldom examined issues.

“The emergence of a frictionless and essentially cost-free means of delivering goods and services worldwide forces economists to rethink some fundamental notions of how distance and time relate to the concept of comparative advantage,” he said. “For trade statisticians and ultimately for policymakers, the fact that the Internet is essentially free of customs posts greatly muddies the cross-border trade data that informs trade policy.”


According to O’Connell, trade statisticians worldwide have been struggling with uneven success to devise ways of quantifying trade in products that not only elude the customary mechanisms for monitoring trade but which frequently defy easy classification.

“A recording of Elgar’s Enigma Variations on a CD clearly qualifies as a good,” he said. “But the very same music downloaded from iTunes to a portable media player is widely regarded as a service. Similarly, what do we make of a software program written in California that is downloaded by an Austrian customer from a server located in Singapore?”

O’Connell maintains that unless the means are found to track the more “ethereal” forms of commerce taking place via the Internet and to produce accurate, detailed statistics on a timely basis, debates over the virtues of free trade and globalization could become even more untethered from any empirical grounding than they already are.

For more articles on global trade click here.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Global Trade · Trade · Transportation · All Topics
Latest Whitepaper
How Lean is your Lean Quality Program?
Avoid quality program bureaucracy that can sap logistics productivity and increase costs
Download Today!
From the September 2016 Issue
Indecision revolving around three complex supply chain elements—transportation, technology and organizational structure—finds many companies waiting to commit to a strategic path. However, waiting too long will only result in a competitive disadvantage that will be difficult to overcome in today’s fast-paced, global economy.
Time for Asia’s ports to rebuild
Is the freight recession upon us…again?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Supply Chain Best Practices: Visibility to In-Transit Inventory
During this webcast you'll learn on how various organizations have gained instant access to in-transit parcels and given access to this information to stakeholders.
Register Today!
EDITORS' PICKS
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...

Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....