Globalization

Globalization refers to the factors that interconnect various locations of the world in ways that make the world more accessible for business, travel, and cultural exchange. Globalization is often thought of as making the world smaller in terms of reducing the difficulty of interacting with distant peoples, economies, and cultures. Factors that have led to globalization include the increasing ease and relative decrease in the cost of travel, access to low-cost and effective communication, the strengthening of once-weak economies, growth of multinational corporations, ease of monetary transfer through the international banking system, and the ability of the transport industry to move goods in an increasingly efficient, expedient, and safe manner.

Another crucial factor is the increased trade between nations. This is because of decreased [Page 623]tensions between some nations and trade agreements entered into by many nations. The use of cheap labor in some countries to produce the goods that will be consumed in nations with more expensive labor costs is at the heart of the nexus between globalization and transportation.

One of the major impacts of globalization has been the rapid growth of international trade. Japanese cars are now often made in America. U.S. carmakers import many components for their cars from other nations. These American carmakers are even assembling their cars in other countries, for example, Ford and its Mexican assembly plants. Countless American companies like Walmart contract with companies in countries with a cheap labor supply and import goods made abroad to be sold in the United States.

In countries like Vietnam, Indonesia, China, and even Haiti, residents are provided work to make products that are shipped around the world. With the emphasis of organizations like the World Trade Organization (WTO) and the General Agreement on Trade and Tariff (GATT), trade among many of the countries in the world has dramatically increased. This increase in international exchange is made possible, in large part, by the modern transportation system.

Probably the most dramatic development in transportation of goods as it relates to globalization was the advent of container shipping. Containers are metal boxes that closely resemble the trailer portion of a tractor-trailer truck. Prior to the use of containers, goods had to be loaded on trucks or trains, transported to a port, unloaded, and then reloaded onto the ship. This process had to be duplicated in reverse on the receiving end. The manual labor of longshoremen at the docks was intense and added greatly to the cost of shipping.

Using containers, the manufacturer is able to load a container at the point of manufacture. The container is then loaded onto trucks or trains, and sometimes on barges, and taken to the port, where it is quickly loaded by crane onto a container ship. On the receiving end, the process is just as efficient. Whereas before the use of container shipping a freighter might be in port for multiple days to be unloaded by longshoremen, today a container ship can be offloaded in just a few hours. One of the factors necessary for efficient trade between countries is the speed of transport, and container shipping has greatly reduced the time for shipping goods.

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