Transportation Bottleneck

An August 2008 report by CBS details the bottleneck problem for grain shipments. New technology should reduce the number of times grain must be handled to one, rather than two or three as is the current situation.

Evaluating trade costs effects on global trade.

"What are the factors underlying these trade costs? Our evidence suggests that the determinants that matter most for explaining trade costs are standard factors like geographic distance (which is a rough proxy for information and transportation costs), trade policy and tariffs, adherence to fixed exchange rate regimes, and membership in the British Empire or Commonwealth. In particular, the technological breakthrough and spread of the steamship in the course of the nineteenth century is associated with increased international trade, as is the spread of container shipping from the 1960s."

The authors, Jacks and Meissner compare trade costs with growth or declie i global trade. I am not completely in agreement in their breakdown of the costs, but they do note the sequence of expectations, namely: Expectations of increased trade yield technological improvements in transportation. I think they missed that communictions technology precedes and drives expectations of greater trade.

And Krugman reviews some transportation costs studies.

And this report from a government study finds:

"All finished commodities covered in the survey had an average transportation charge amounting to 7.8 per cent of producers' prices in 1933 as compared with 5.4 per cent in 1928."

And the author touches o the dual equilibrium problem:
"There is general agreement with a statement made by Commissioner Eastman in 1934 that there is today, and probably would be under normal conditions, an excess of carrying capacity of existing transportation facilities. This duplication of facilities and services and excessive competition among different transportation agencies must inevitably result in substantial wastes."

As I have noted, we have the same dilemma in which we support both online based freight delivery and personal shopping by car.

And this essay nails the problem in 2005.

The Federal Reserve, Dallas, writing bout the gasoline pricing model.