2. How do costs of transportation impact global trade?
1. In my personal opinion, the author’s choice to compare the transportation systems in the European and the North America as fundamental. First, the transportation system in the two geographical regions is closely related. They are both well maintained and established. Just like in the United States, the European countries have a close proximity to each other (Clausen & Voll, 2013). Likewise, both have established guidelines to enhance the movement of goods and products within and outside their respective borders. Both the North America and EU countries employ similar distribution hubs or centers such as trains and pipelines. Moreover, they both have a similarity in the transportation of goods system. Lastly, both the freight terminals and equipment are privately owned in both regions.
Amid the similarities, there are also existing differences between the systems. The differences are brought about by issues such as tariffs, taxes, equipment, organization, market focus, ownership, and distance. In Europe, there is a separation of operations and infrastructure organization for the purposes of accountancy while in North America, operations and infrastructure are separated by region. Second, the EU market is passenger oriented while the North America’s is Freight oriented (Clausen & Voll, 2013).
2. Obviously, the transportation cost has a great impact on the global trade because an organization will also choose a most economical means of transport. The economic growth in the EU has prompted an increase of trucks engaged in the cross-border trades (Leinbach & Capineri, 2007). The European countries can easily transport goods across their border using trucks. The trend can easily endanger the use of other modes of transport like air and water. However, North America can only use air and ship travels to move goods internationally. Trucks cannot be used because the region is surrounded by the Oceans (Leinbach & Capineri, 2007).
Clausen, U., & Voll, R. (2013, Feb 14). comparison of North American and European railway systems. Retrieved from https://download.springer.com/static/pdf/596/art%3A10.1007%2Fs12544-013-0090-4.pdf? originUrl=https://link.springer.com/article/10.1007/s12544-013-0090- 4&token2=exp=1449775695~acl=/static/pdf/596/art%253A10.1007%252Fs12544-013- 009
Leinbach, T. R., & Capineri, C. (2007). Globalized Freight Transport : Intermodality, E- commerce, Logistics and Sustainability. Cheltenham, UK: Edward Elgar.
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