Shipping, trucking, rail costs increase by 50% in past year

Here are two charts, one showing the price of “bunker” oil (ships) and one showing the price of “diesel” oil (trucks and trains), over the past year. Rather than be concerned about the price of gasoline for cars, the prices that will really impact us are these two which represent the cost of short and long haul transportation.

Commercial transportation systems are the Achilles heel of globalization and it is these costs that will and drive the trend towards relocalization.

Related to these costs is the fact that 57% of the electricity in the U.S. and 16% in Canada is generated by coal powered plants, coal that is delivered on those ships that run on bunker oil and those trains that run on diesel. So an increase in the price of diesel and bunker fuel will also effect electricity economics. Not to mention of course the impact on the costs of growing and shipping food.

Related links:
http://www.bunkerworld.com/prices/
http://www.eia.gov/oog/info/gdu/gasdiesel.asp

P.S. Why did Warren Buffet recently invest in railroads?

Source: Victoria Transport Policy Institute

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