Executive Briefings

Low Cost of Ocean Transportation Keeps U.S. Exports Competitive, Economist Says

U.S. export prices remain competitive, primarily because of low ocean transportation costs, according to an economist with the consultant IHS Global Insight.

"There has been concern that with the current spike in commodity prices, the landed-cost of our exports would tame or minimize demand from foreign buyers," said IHS Global Insight Economist Brandon Kliethermes. "This was the case in 2008, when commodity prices rose to record highs, making delivered commodities somewhat uncompetitive. Today, the situation is dramatically different, in that commodity prices are valued somewhat lower than in 2008. But more importantly, transportation and exchange rates are significantly lower now than then." 

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U.S. export prices remain competitive, primarily because of low ocean transportation costs, according to an economist with the consultant IHS Global Insight.

"There has been concern that with the current spike in commodity prices, the landed-cost of our exports would tame or minimize demand from foreign buyers," said IHS Global Insight Economist Brandon Kliethermes. "This was the case in 2008, when commodity prices rose to record highs, making delivered commodities somewhat uncompetitive. Today, the situation is dramatically different, in that commodity prices are valued somewhat lower than in 2008. But more importantly, transportation and exchange rates are significantly lower now than then." 

Read Full Article