Bulk trade and maritime transport costs - The evolution of global markets

Since the 1950s a transport revolution has occurred comparable to events in the late nineteenth century when sailing ships was replaced by steam vessels. Freight rates for bulk products have decreased 65-70% due to improved maritime technology. Formerly separate markets for bulk products have been unified globally. A conclusion is that the low freight rates since the early 1980s will level out in a future perspective. Price peaks caused by political and military crises like the Korean war, the Suez crisis, OPEC I and OPEC II also seem to be of diminishing importance over time. The world market has become much less sensitive to external shocks due to many alternative sources of supply and many alternative routes for transport. Copyright (C) 1996 Elsevier Science Ltd.