Trade and Transportation Costs: The Implications of Higher Energy Prices

26 Pages Posted: 3 Oct 2011 Last revised: 2 Jan 2013

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

Date Written: December 25, 2012


As low cost oil reserves are depleted over the coming decades and replaced by higher-cost sources and other forms of energy that are less easily used for transportation, the cost of shipping goods internationally will increase, perhaps very substantially. This will have a pervasive impact on the pattern of trade. Export supply serving more distant markets will be deflected to closer regional markets. Multinational corporations will reorganize to service more distant markets through foreign affiliates or through licensing arrangements. Trade in intermediate goods and services will follow the shift in production base. Suitability of transport infrastructure to use of coal-fired electricity will further shape the geography of trade. The nature of traded goods (value-to-weight and carbon content) will affect their global market access. The question is how significant these effects will be- will there be a reversal of globalization or will the effects be felt more subtly? Consideration of the role of transportation costs in international trade and of the scope for improvements in trade logistics to offset higher fuel costs suggests that higher energy prices will not end globalization; but higher transportation costs will have important and pervasive impacts on the pattern of global trade and production.

Keywords: International trade, energy prices, transportation costs, globalization

JEL Classification: F15

Suggested Citation

Ciuriak, Dan, Trade and Transportation Costs: The Implications of Higher Energy Prices (December 25, 2012). Available at SSRN: or

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

83 Stewart St.
Ottawa, Ontario K1N 6H9

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8

Asia Pacific Foundation of Canada ( email )



BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639

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