Distance costs.1 min read


Sebastian, over at Praized, has a great post about the “New Inflation “ report by CIBC world markets.  If you haven’t read it yet, I highly recommend you check it out.  I’ll wait… ( besure to check out the “Will Soaring Transport Costs Reverse Globalization?” section )

Over the last few years there’s been alot of discussions about globalization and the Walmart effect on business.  There hasn’t been alot of consideration around the sustainablility of the model.  The simple situation is that we’re running out of fossil fuels and the cost is going nowhere but up…

I think this is going to have a big impact on the business world over the next 10-20 years as  have to deal with the fact that distance is going to cost us money.    The change and the cost increases probably won’t be linear, the tar sands projects in Alberta are showing that.  As the cost of oil increases, less opertune oil deposits are reconsidered.  Alternative energey sources will also become viable but most still depend on a finite supply source.   This is probably good news environmentally too, as the costs of the shipping increase its going to force businesses to consider local options.  Overall a great article and a whole new angle to consider with regards to internation competition.