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
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...