DNL Globalization

Globalization, a global movement towards the integration of the economy, finance, trade, and communications, has grown massively since the 1960s to the present day. This process is marked in particular by free trade (without customs duties). In this excerpt from the BBC news channel, we will focus on global trade, and more specifically on the process of containerization. In the first part, we will discuss the origin of globalization. Then, we will study the development of an innovation that has revolutionized world trade, and then we will look at the impact generated as a result of the implementation of this progress.

Since the 19th century, globalization has improved considerably; however, not everyone agrees with this movement. Some opponents challenge the capitalism system rejected by globalization. After the Second World War, capitalism and communism dominated the world. This is when the “anti-globalization movement” was born, whose objective was not to totally eliminate globalization, but rather to fight against the influence of “leaders” such as trans-national companies.

Although there are opponents to this system, there was a strong demand for international trade services from industrialized countries at the end of the Second World War. Globalization is in part the result of politicians' desire to break down the borders that hinder trade. This request aims to improve technical progress in transport, which has made it possible to increase the speed and volume transported per journey. The progress is due, in particular, to the modernisation of equipment but also to the creation of new means of transport such as containers. This innovation, invented by Mr. McLean, has revolutionized international trade thanks to its many qualities.

This rapid and massive development of containerisation can be explained by several factors, in particular:

— one of the main advantages of this box is that it has been standardized with universal dimensions (8ft x 8.6ft x 40ft). As a result, goods can be transported by boat, truck and train to any country in the world. It is, therefore, much easier than before to export goods abroad;

— productivity gains during port handling operations, thanks in particular to the container cranes (see the photos above) that transfer the ship's boxes to the quay and vice versa;

— increasingly strong transport capacities, allowing prices to be reduced. Indeed, the purpose of this creation is also to reduce the cost of transport as much as possible. For example, in 1954, to export a ton of goods across the Atlantic, customers had to pay $420, whereas now it is less than $50, which is a significant profit.

Even if some economists call it a zero transport cost, this new means of trade creates significant inequalities between countries. In fact, this export/import system allows goods to be delivered worldwide. But in reality, not all countries can be part of this system due to the lack of financial resources. Indeed, being a globalizing country means being a country that is able to build an infrastructure capable of receiving these famous containers. As infrastructure is expensive, the poorest countries like Sub-Saharan Africa cannot be part of globalization and are therefore “cut off from world economy”.

Finally, thanks in part to this invention, international trade has become twice as important

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