What are the reasons for a fast growing world trade since 1950?

Exports of manufactures grew rapidly since 1950. In the year 2010 they are more than 80 times higher than 60 years ago.

The world trade has grown more than the world’s GDP in the last six decades. The gross domestic product (GDP) is a basic measure of a country’s overall economic output. GDP is the market value of all finished goods and services made within the borders of a country in one year.

Which factors influenced this steady, long-term growth?

There are many factors which influenced this rapid, massive increase in growth as a whole. It is possible to divide the massive changes in three main groups, to get an easier overview.

These groups are:

  • Decrease in transportation costs
  • The productivity of companies is improving continuously
  • Higher living standards in emerging economies

Decrease in transportation costs: There are many factors which contributes to keep the costs of transportation low. One of this factor is the handling of information, IT- Systems were introduced and therefore it is possible to conduct a work order very quickly. Through the last six decades the means of transport were able to transport bigger loads, because ships and trucks for example got bigger. Another important point which contributes to keep the transportation costs down is the UNIT Load. Standard sized boxes and goods which designed uniformly contributes to save transport spaces.

Productivity of companies is improving continuously: Nowadays it is absolutely necessary in firms to work efficient and save costs. Automation of the production can contributes to save costs in the process of production and helps to avoid human errors. Production concepts like “Just in time” or “Just in sequence” systems were introduced in the companies to handle the production process in a smart way.

Higher living standards in emerging economies: A lot of jobs from industrial countries move around to emerging countries like China or India. Therefore a lot of people in these states can find a job and earn money. This fact allows them to get a higher standard of living. They can spend their money on consumer goods.

Source: Logistic lecture of the 27th of March

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