Foreign Trade and Globalisation

Summary

Driver description
Interactions with the Economy Domain
Interactions within the Social Domain
Interactions with the Environment Domain
Interactions with the Technology Domain
Impacts on Mobility and Transport

Driver description

  • “The post-1990 globalisation phase is characterised by three key interrelated phenomena which differentiate it from previous phases stretching back to the 1850’s: firstly, an unprecedented deepening in trade and capital market integration; secondly, a cost-induced and ICT-enabled acceleration in the worldwide relocation of production processes, with an associated boost to trade in intermediate goods and services; and finally, regarding the developing world, higher trade and capital flows coupled with strong human capital endowments are driving a steady process of global income and technological convergence.” (Ref: CO_1002)
  • “(...) the growing integration of national economies into the world’s trading system over the post-war period was driven not only by trade liberalisation but also by falling transportation and communication costs, rising income levels, higher productivity growth rates in tradeables compared with non-tradeables, and more recently by an ICT-enabled acceleration in the international division of labour linked with the development of increasingly global production systems. All these developments have led to a sharp increase in overall trade flows, underpinned by an expansion in both intraindustry flows and in a range of internationally tradeable services.” (Ref: CO_5048)
  • “Globalisation is leading to new ways of organising production and distribution, relying heavily on efficient supply chains and thus the organisation of the logistic process (...) This has been facilitated by the decline of international transport costs because carrying capacities have expanded and transport operators could take advantage of larger economies of scale.” (Ref: CO_5048)
  • “Transport costs and scale economies interact to produce the trade flows observed in the past half-century. The main insight from research is that the relationships between transport costs, production locations, and trade patterns are nonlinear. Falling transport costs first led to countries trading more with countries that were distant but dissimilar. When they fell further, they led to more trade with neighboring countries. Similarly, when transport costs fell from moderate levels, production concentrated in and around large markets.” (Ref: CO_5028)
  • “World trade is another important aspect of economic growth, and world trade can also be seen as an indicator for globalisation.” (Ref: CO_5048)
  • “The world economy continues to be the most important driver of growth. Trade has grown faster than emissions in practically all production sectors of the world economy. The role of foreign trade will grow and its share will increase, and this trend – after the temporary world economic recession – is likely to continue. Since the mid 1990s, the expansion has been driven by the reintegration of the countries of the former socialist bloc and the integration of developing countries into world trade. The key sector has been trade in services, which is likely to continue.” (Ref: CO_5055)
  • “While it is accepted that there will be winners and losers, this study shows clearly that when all the effects are properly accounted for, that the transition costs are in fact relatively small (less than 0.1 off the growth rate of EU living standards over the period 1991-2003), with offsetting effects on consumers and producers:
    • On the consumption side, the downward pressure on consumer prices from cheaper imports has contributed to a doubling in the growth rate of real consumption wages over the 1990’s in the EU (and in the US). This globalisation-linked increase in the consumer surplus has also been bolstered by the gains accruing from a significant increase in product varieties.
    • On the production side, while the EU is holding its own in export markets both in terms of volumes and prices, domestically globalisation is being reflected in higher import penetration rates, increased net FDI outflows and a faster pace of external outsourcing of goods and services, all of which are potentially negative in the short run.” (Ref: CO_1002)
  • “The openness of the world economy is increasing and despite slowing world trade growth, world trade continues to be the driver of economic growth. The unfavourable side of globalisation and integration processes is that in most countries the growth of freight transport services exceeds GDP growth, while most transport surpluses - contrary to the objectives of Marco Polo I - have not been diverted to rail or inland waterways but chiefly to the road.” (Ref: CO_5055)
  • “Nowadays, 1% GDP growth is commonly associated with world trade growth of 2.5-3.0%,and the level of transport services parallels this. The proportion of road transport within this growing transport sector is increasing as well. One reason for this is that land transport has more favourable commercial speed (the total distance taken between the place of despatch and the destination). In Europe, this is approximately 300 km/day for rail transport and 1000 km/day for road transport. While transport policies of developed countries, including the European Union, aim to achieve a transport performance level for themselves that is decreasing, or increases less compared to the level of their economic growth, world trade trends result in the opposite: a unit of GDP growth is coupled with a much higher level of transport performance.” (Ref: CO_5055)
  • “In the intermodal competition, the time factor is the greatest issue for goods transport by rail: the rail’s trading rate is barely one third of the road’s. Reduction of the time factor is mainly impeded by the following factors: the rate of the so-called operation times is very high in relation to useful running, the EU’s railway network – for historical reasons – is fragmented (there are so many countries and at least as many rail infrastructure companies), different standards exist (e.g. in electric traction), and technical standards vary between member countries. With combined (mainly containerised) transport, the operation of the shuttle service freight trains can be classed as a necessary but inadequate solution. Inside the European Union, goods transport by rail could be made genuinely competitive in the longer term provided that a technically uniform, border-free railway network with equal capacities existed.” (Ref: CO_5055)
  • “This necessitates the redefining of the role of rail transport, the application of proven solutions on a larger scale (e.g. freight trains engaged in shuttle service), the search for new technological procedures and construction of a technically uniform EU railway network. Of course, long-distance road transport cannot be eliminated, but the effort should be to make road transport involved in the implementation of local tasks. It would be expedient to give preference to alternative solutions in the case of average and long distances.” (Ref: CO_5055)
  • “It is characteristic for our globalising world that the time needed in order to overcome distances is decreasing, from an economic perspective, national borders are falling, the cycles of production are shortening, stocks are shrinking and time is becoming the neediest source of power. All this means that fast transport of people and valuable goods is becoming more and more important; as a consequence, air transport has become the driving force not only of the transport sectors but also of globalisation. The significance of the air transport market and the extent of air transportation are steadily increasing the negative effects of flying as well” (Ref: CO_5055)
  • “Economic opportunities and improvements in living standards have generated the more intensive usage of faster and more convenient transport modes which are also less energy efficient. In the developed countries, car mobility stands at around 75%, but even in the developing countries it has reached 40%.”(Ref: CO_5055)
  • “More passengers transported by planes of higher capacity – with passenger traffic unchanged – leads to a relative decrease in the number of the planes. The technical development trend on busier routes is the appearance of higher-capacity and therefore heavier airplanes. Inside the European Union, the construction of high-speed rail networks also has the potential to decrease the growth rate of air transport. In the other countries of the world, over a 20-year perspective, although the growth rate cannot be constrained, the extent of environmental pollution can be moderated by the increased use of alternative fuels” (Ref: CO_5055)

Interactions within the Economy Domain

GDP trends

  • “The overall consequence of global trade patterns on transport is seen in the close relationship between GDP and (freight) transport growth.” (Ref: CO_5048)
  • “(...) in the period 1990 to 2005, the GDP elasticity of transportation activity in the EU was estimated at 0.90 for both passenger and freight transport. This is a remarkably high value indicating great dependence of economic and social activity on transportation. A closer look at the period 2000 to 2005 shows that the GDP elasticity of passenger transport in EU remained constant at a level just below one (...).” (Ref: CO_5048)
  • “The projections for the EC DGTREN Trends to 2030 assume values of the GDP elasticity of transportation activity that remain stable over time as far as passenger transport is concerned (...). For passenger transport in EU, the GDP elasticity is equal to 0.65 on average for the period 2005 to 2030.” (Ref: CO_5048)
  • “When one also includes the dynamic effects of globalisation (i.e. general equilibrium effects which would be expected to kick into action once shifts in worldwide relocation patterns start to impact on the respective economic structures of countries) the EU gains in the long run from global relocation. These GDP per capita gains reflect the higher productivity growth rates which emerge over time due to a more efficient global division of labour. The size of the EU’s share of these worldwide efficiency gains will depend on the speed with which the necessary sectoral reallocation of resources takes place in the EU and, in particular, on the success of governments in facilitating this adjustment process.” (Ref: CO_1002)
  • “To overcome these problems, Member States will need to implement a productivity agenda focussed on the following five key areas, namely action on the level of regulation; the structure of financial markets; product and service market integration; adapting to ageing populations; and progressive moving towards an innovation, as opposed to an imitation, based economic model focussed on both the production and diffusion of knowledge. Without such an agenda, EU GDP per capita growth rates will continue to decline relative to those of other developed countries and the EU will fail to elicit a share of the gains to be generated from the catching-up processes of the emerging economies.” (Ref: CO_1002)
  • “For surface freight transport activity (tkm), the low scenario assumes a gradual decline of the freight intensity of GDP in all regions, while the high scenarios assumes that freight intensity stays at the 2005 level in all regions through 2050. A declining freight intensity of GDP could be the consequence of “dematerialisation” of growth, i.e. a proportionally faster increase in those components of GDP that are not particularly freight-intensive, including many services and IT applications. A constant or increasing freight-intensity might be the consequence of continued globalisation, characterised by geographical fragmentation of supply chains. Moreover, countries at lower levels of economic development may be embarking upon a relatively freight-intensive growth path, so that in those regions the assumption of declining intensity is less straightforward than for regions where GDP is already very high. On the global level, we expect high and roughly constant growth rates that lead to a tripling or quadrupling of global passenger transport volumes by 2050 compared to 2000, while surface freight activity grows by a factor of 2.6 to 3.5 over the same period.” (Ref: CO_4024)
  • “Openness to international trade and investment is also important to promote economic growth.” (Ref: CO_0178)
  • “To the extent that economic growth is driven by productivity gains, a higher export share in GDP should then correspond to a better growth performance.” (Ref: CO_0178)
  • “The economic indicators mostly used in transport and other analyses are the annual growth of GDP (at constant prices) – in general and per economic sector – and trade (imports and exports per country).” (Ref: CO_2041)
  • “Globalisation: The internationalisation of markets for information, capital, goods and services and labour has fostered growth since around 1990. The transformation of former communist economies – especially China – and the increasing involvement of developing and emerging countries in the global economy have enabled an international division of labour and gains from specialisation, thus boosting productivity. In global terms, this has led to greater prosperity. On the other hand, this exclusively market- and competition-oriented globalisation has forced all the countries concerned to undergo major upheavals in order to adapt to the new circumstances.” (Ref: CO_0235)
  • “It is perfectly possible that some degree of gradual trade liberalization may have been beneficial, and even necessary, for certain developing countries in the 1980s – India and China come to mind. But what has happened during the past quarter of the century has been a rapid, unplanned and blanket trade liberalization. Just to remind the reader, during the ‘dab old days’ of protectionist import substitution industrialization (ISI), developing countries used to grow, on average, at double rate that they are doing today under free trade.” (Ref: CO_0241)

Employment

  • “(...) globalisation has however a strong and accelerating influence on the process of the creation and destruction of jobs and therefore on the territorial distribution of employment opportunities." (Ref: CO_1023)
  • “The relocation of businesses outside Europe is the most sensitive aspect of globalisation. In future, not only manufacturing activities but also service activities such as software production and programming, telephone marketing, law and tax consultancy, accounting, and financial information analysis etc., will be affected.“ (Ref: CO_1023)
  • “While the process itself is not new, the present phase of this secular globalisation process has witnessed a significant acceleration over the last 1-2 decades, with the integration of China, India and the former USSR countries into the world economy. This acceleration in integration has resulted in a 50% increase in the world’s non-agricultural labour force, with a large proportion of these additional 700 million workers comparing well in human capital terms with the low skilled workers of the “developed” world. This labour supply boost has also coincided with a period rich in technological progress, most notably in the ICT area, with positive effects from the sharp reduction in communication costs being reflected in the growing tradeability of many traditionally sheltered service sectors.” (Ref: CO_1002)
  • “Since the classic efficiency gains from deeper trade and capital market integration depend heavily on the restructuring of the respective economies (specialisation requires restructuring), labour market flexibility is an essential prerequisite for a mutually beneficial integration process. In the case of the EU, there needs to be a shift of the displaced resources from the low-skilled / labour intensive sectors which are strongly affected by globalisation into those higher skilled activities where the EU continues to hold its comparative advantage.” (Ref: CO_1002)
  • “Considered under the aspect of labour markets, globalisation has however a strong and accelerating influence on the process of the creation and destruction of jobs and therefore on the territorial distribution of employment opportunities. This is why this aspect of the globalisation process is perceived more tangibly by the general public than others.” (Ref: CO_1023)

Regional differences in economics

  • “Accelerating globalisation is certainly the most important external factor with significant territorial impacts.” (Ref: CO_1023)
  • “Looking to the future from a trend perspective, it is likely that more and more regions will be negatively affected by the globalisation process, both urbanised and more rural ones, while the benefits of globalisation will largely remain concentrated in a limited number of regions with advanced metropolitan functions and a few others with specific characteristics. The globalisation process is therefore likely to sharpen territorial imbalances within Europe.” (Ref: CO_1023)
  • “In the context of progressing globalisation, it can be expected that trade flows with Latin America and a number of emerging Asian countries will intensify, while trade with Africa is not expected to grow significantly.” (Ref: CO_1023)
  • “Another indication of continuing globalisation and the growing role of emerging countries in the world economy is the increase in their exports as a proportion of national GDP.” (Ref: CO_0274)
  • “Fast-growing countries may even gain more in economic influence than their growth rates suggest when their middle class consumers grow in numbers and start to spend discretionary income on modern, short-cycle consumer goods, becoming attractive export markets for advanced economies (Accenture, 2008).” (Ref: CO_0274)

Interactions with the Social Domain

Migration flows

  • “Both immigration and tourism have increased significantly in recent decades. (...) A common perception is that most migrants are moving from poor countries to rich countries, but in reality half of the migrations take place within the developing countries. One cause of this growth is the globalization process that enhanced mobility and improved accessibility to different places (Poot et al. 2008).” (Ref: CO_0092)

Car ownership

  • “Specifically, there will be limited growth in OECD economies and very strong growth outside of the OECD, notably in the emerging economies. The strong demand increase in the high end scenario is driven to a large extent by continued fast growth of passenger mobility in emerging economies (...). This is most usefully interpreted as an indication of “where demand would like to go”, in the sense that it is assumed that the car ownership and usage patterns in emerging economies emulate those of European economies in the past. Whether this is a realistic assumption is uncertain, and whether such aspirations could materialise even if they existed is not straightforward either. For example, fast urbanisation might slow down the growth rate of private vehicle ownership and slow growth in the use of vehicles even more. Rising energy prices and less accommodating policies than have been observed in Europe in the past may also put a check on growth in car use. Nevertheless, the high growth scenario is not impossible and even in lower growth cases the increase in non-OECD mobility is strong.” (Ref: CO_4024)

Urbanisation

  • “Conventional economic development often takes peri-urban land as the location for large scale industry, science and business parks, roads and other urban infrastructure.” (Ref: CO_0097)
  • “Throughout Europe in the 1990s, changes in land cover were mainly characterised by increases in urban and other artificial land development and forest area, at the expense of agricultural and natural areas. Anticipated growth of the urban population by 5 % in the coming decade, will further fuel these trends. Globalisation, transport networks, socio-demographic changes, societal aspirations for the 'urban culture' and uncoordinated land-planning mechanisms at various levels are the main sources of the environmental unsustainability of our cities.” (Ref: CO_0028)
  • “Global economic growth is one of the most powerful drivers of urban sprawl. Globalisation of the economy is today fundamentally interrelated with the development of information and communication technologies (ICT). Both phenomena are beginning to have profound impacts on the spatial distribution of population and employment. Overall, it is likely that ICT will drive urban development towards an even more sprawled future.” (Ref: CO_0028)
  • “Global competition is also driving efforts to secure economies of scale in the distribution and consumption of goods that have driven changes in the retail sector over the past decades. In the 1950s, most shops were small and located in the middle of residential areas, and the majority of the population did their shopping on foot. Today, major out-of-town shopping centres are the dominant form of retail provision, which together with the surrounding parking areas occupy vast areas of land only accessible by car.” (Ref: CO_0028)

Interactions with the Environment Domain

Climate change impacts

  • “In general, increased economic openness (mainly trade and investment liberalisation) seems to have had, at worst, a benign effect on emissions of localised pollutants. It has, for example, been found that (for the statistically average country), a 10% increase in trade intensity leads to approximately a 4% to 9% reduction in sulphur dioxide (SO2) concentrations. Other studies have found that openness appears to have a beneficial impact on SO2 and nitrous dioxide (NO2), but no statistically significant impact on particle matter (PM) emissions. Still another study found that trade intensity increases land releases of pollutants, but either reduces or has no statistically significant effect on air, water and underground releases.” (Ref: CO_1031)
  • “It is not clear how the relative price changes that result from openness will affect the environmental composition of economic activity: some countries will produce more environmentally intensive goods, others will produce fewer. On the other hand, liberalisation will raise incomes, perhaps increasing the willingness to pay for environmental improvements: these potential income effects could outweigh the negative scale effects associated with increased economic activity. When combined with the positive effects associated with technology transfer, the net effect on local pollutants could be positive.” (Ref: CO_1031)
  • “However, the evidence concerning carbon dioxide (CO2) and other greenhouse gas emissions is less encouraging, with the net effect of trade liberalisation likely to be negative. One study, using a cross-section of 63 countries (and correcting for trade intensity and income) concluded that a 1% increase in trade leads to a 0.58% increase in CO2 emissions for the average country. Other studies also find openness raises CO2 emissions, but the detrimental impact disappears when corrections are made for income levels, etc.” (Ref: CO_1031)
  • “The climate change issue will clearly lie at the heart of efforts to deal with the environmental impacts of transport that result from globalisation. No other environmental issue has so many potential implications for transport sector policy today. Although the specific estimates vary, transport-based CO2 emissions are projected to grow significantly in the coming years. Light duty vehicles on roads will continue to be the largest contributors to this problem, but air-based emissions will grow more rapidly. Some shift toward less carbon-intensive technologies is foreseen, but no significant shift to truly low-carbon technologies is anticipated in most of the current estimates. In other words, incremental, rather than drastic, technological change is foreseen.” (Ref: CO_1031)

Interactions with the Technology Domain

No particularly relevant interrelationships have been found.

Impacts on Mobility and Transport

Transport intensity

    • “It has been argued that transport, both passenger and freight, should be decoupled from economic development. This would mean that mobility and trade should be carried out in a less transport intensive way. Given that mobility as well as trade are some of the fundamentals for development of our society, this debate is complex and controversial. Current discussion is therefore focused on how mobility and trade can be maintained, whilst reducing the adverse effects of transportation: in short, how can economic growth be decoupled from the negative impacts of transport.” (Ref: CO_5048)
    • “In the long term (20-40 years), in order to reduce the negative effects, the transport intensity of the economy should be influenced, not only detached (with solutions within the transport sector), but reduced (with non-transport solutions). The demand for transport arises outside the transport sector itself - as with most of the basic issues to be solved with decoupling. The demand for transport services, transport infrastructure, vehicle stock and logistics systems depends largely on the structure of industry, agriculture and settlements, on school and health care systems, on tax and tariff policies, on trade, and on integration and globalisation effects.” (Ref: CO_5055)
    • “It is most likely that the processes which started in the last quarter of the 20th century will continue in the 2nd millennium as well. As far as our subject is concerned, the most important of these processes are as follows:
      1. As a consequence of globalised production, purchase and distribution will also be globalised, creating huge supply chains realised in international networks of logistical service centres and transfer stations.
      2. Instead of locally concentrated production, production and servicing networks will be created; here, in order to decrease the transfer times, to minimise stocks, improve performance capacities and reduce expenditures, internal and external logistics will be integrated, and the automated products and goods detection will come in play.
      3. Logistic informatics is taking on an ever-increasing role in the operation and development of logistical systems (e. g. wide-range application of codes, sensors, telecom techniques, expert systems, databases, data research and optimising methods).
      4. The European transport routes are being modified and the volume of transported goods is increasing considerably. The proportion of intermodal and combined increase, transport solutions with the lowest environmental load will take on a prominent role, and regional airports will become more important.
      5. When developing the transport routes, the west-east flow of goods must be taken into special consideration. Consequently, the development of west-east and west south- east logistical routes and network elements should take priority.”

Unfortunately, at present, the facts tell a very different story. After the enlargement of the European Union, the economic growth predicted for the newly acceded countries and the improving relations between the regions further strengthened the position of road transport and road freight. The planned economy previously in place in the recently acceded member states gave preference to the rail transport mode, but the transformation of economic structures has resulted in strong growth in the road freight sector.” (Ref: CO_5055)

  • “It is a task of decades to explore the non-transport solutions, to elaborate programmes, and to harmonise them with transport development (development of infrastructure, vehicle stock, division of labour and technology). Expediently, location of industry and the regional division and management of agriculture should also be based on the one hand on comparative advantages, on the other hand to execute under the circumstances of the ‘regulated market’ from global aspect. During the location process, the European Union (comparing several variants) would support the most favourable one, of course on the basis of subsidiarity. However, the ’regulated‘ policy of industrial location and agriculture, which also influences transport, belongs to a ‘sphere’ beyond transport and this can be realised only by close cooperation among the EU member states.” (Ref: CO_5055)
  • “Key aspect is that transport modes cannot be dealt with individually, split apart from each other. Moreover, even the harmonised transport should be practically adapted to regional development and urban policy measures, and the order is converse: First, transport should be adapted to regional development, and then the optimal cooperation of transport modes should be developed. As a first step, the leaps forward in the development of private transport should be moderated by offering a competitive community transport alternative instead. This primarily means a modern and highly developed community transport service. Provided that this is done, then measures for decreasing mobility can be implemented (e.g. congestion road tolls, other measures for moderating transport needs, restrictions on car entry to protected areas, increasing overhead costs of private vehicles, changes in approaches in favour of pedestrians). And finally the key challenge for the next 20-40 years is whether the European Union is able to become a federal state from a ‘loose‘ federation of states.” (Ref: CO_5055)

Air transport and globalisation

  • “In the aviation sector, in order to moderate air traffic and its environmental load, besides further development of the high-speed railway network, the deployment of fewer, high-capacity aeroplanes and wider use of alternative fuels could offer a solution.” (Ref: CO_5055)
  • “Some factors acted as a catalyst for the spread of low cost. These are: regulatory framework; degree of entrepreneurship; density of population and relative wealth; travelling culture; airport availability; adherence to internet facilities.” (Ref: CO_5037)
  • “International air transport is now a major contributor to globalisation and is continually reshaping to meet the demands of the economic and social integration that globalisation engenders. Some 40% of world trade (by value) now moves by air. To allow the flows of ideas, goods and persons that facilitate efficiency on a global scale, air transport has played a key role in the past, and is poised to continue this role in the future. Yet, as the strong growth in air transport activity is straining air-related infrastructure (such as airports), future economic growth in the sector could well be constrained by capacity limits.” (Ref: CO_1031)
  • “Aviation for passenger transport has been the fastest growing mode of transport in the recent past, driven by rising real incomes, the increased willingness to pay for leisure, the globalisation process and the liberalisation of air transport market. Aviation activity is projected to grow at a rate of 3.1% per year in 2005-2030. The need for more long distance travel facilitated by high speed of air travel is expected to drive this rapid growth, despite the increase in air transport prices due to high oil prices. By 2030, the market share of aviation in passenger transport activity is projected to reach 12.2% in 2030, up from 8.1% in 2005.” (Ref: CO_1029)
  • “There is a consolidation trend towards a limited number of big LCA[1]s that will have consequences on the market structure and the market behaviour with a possible risk of abuse of market power.” (Ref: CO_5037).
  • “Structural changes in the European economy favour the transport of light products with high added-value, while that of raw materials and heavy industrial products is declining.” (Ref: CO_1023)

Air transport and globalisation

  • “In the aviation sector, in order to moderate air traffic and its environmental load, besides further development of the high-speed railway network, the deployment of fewer, high-capacity aeroplanes and wider use of alternative fuels could offer a solution.” (Ref: CO_5055)
  • “Some factors acted as a catalyst for the spread of low cost. These are: regulatory framework; degree of entrepreneurship; density of population and relative wealth; travelling culture; airport availability; adherence to internet facilities.” (Ref: CO_5037)
  • “International air transport is now a major contributor to globalisation and is continually reshaping to meet the demands of the economic and social integration that globalisation engenders. Some 40% of world trade (by value) now moves by air. To allow the flows of ideas, goods and persons that facilitate efficiency on a global scale, air transport has played a key role in the past, and is poised to continue this role in the future. Yet, as the strong growth in air transport activity is straining air-related infrastructure (such as airports), future economic growth in the sector could well be constrained by capacity limits.” (Ref: CO_1031)
  • “Aviation for passenger transport has been the fastest growing mode of transport in the recent past, driven by rising real incomes, the increased willingness to pay for leisure, the globalisation process and the liberalisation of air transport market. Aviation activity is projected to grow at a rate of 3.1% per year in 2005-2030. The need for more long distance travel facilitated by high speed of air travel is expected to drive this rapid growth, despite the increase in air transport prices due to high oil prices. By 2030, the market share of aviation in passenger transport activity is projected to reach 12.2% in 2030, up from 8.1% in 2005.” (Ref: CO_1029)
  • “There is a consolidation trend towards a limited number of big LCA[1]s that will have consequences on the market structure and the market behaviour with a possible risk of abuse of market power.” (Ref: CO_5037).
  • “Structural changes in the European economy favour the transport of light products with high added-value, while that of raw materials and heavy industrial products is declining.” (Ref: CO_1023)

[1] Low Cost Airlines

Transport cost and energy prices

  • “Transport costs are very sensitive to energy prices, especially to oil. However, traffic flows are less sensitive to transport costs.” (Ref: CO_5048)
  • “80% of traffic is not price sensitive. Transport prices may be internalized in goods’ prices, but transport flows are not reduced.” (Ref: CO_5048)