History of Global Trade
Global trade or simply put the exchange of goods over great distances dates back to as early as Stone Ages in Europe. As a result of some basic innovations and improvements in transportation mediums namely invention of wheels, horse-pulled wagons & wooden vessels our Eurasian ancestors were able to trade far beyond their better-known borders thousands of years ago. Interestingly, these ancient roads had no particular name up until mid-nineteenth century when the German geologist, Baron Ferdinand von Richthofen, named the trade and communication network “Die Seidenstrasse” or the Silk Road. The Silk Road (絲綢之路, طريق الحرير, Մետաքսի ճանապարհ, جاده ابریشم, Δρόμος του μεταξιού); an ancient network of trade routes was initially developed around 200 BCE to export silk, stretching from China all the way to the Middle East, Africa, and Europe. After the Roman conquest of Egypt in 30 BCE, trade between China, Southeast Asia, India, the Middle East, Africa, and Europe blossomed and that is because the eastern trade routes were inherited by the Roman Empire. It is believed that by the time of Augustus, up to 120 ships were setting sail every year from Myos Hormos in Roman Egypt to India. The Silk Road in the 1st century CE was so developed that it actually connected Venice to Osaka stretching all the way from Japan to Mongolia in North and Sri Lanka in the south on its path to as far away as Central Asia, Persia, Arabia, Ethiopia and Europe. Marco Polo was a 13th-century Venetian merchant traveler whose 24-year long journey to China is recorded in his ever-famous book “The Marvels of the World”. This map illustrates the extent of his journey along the Silk Road. Meanwhile, in the 14th Century, China owned the greatest seagoing fleet in the world consisting of 3,500 ships at its peak, some of which were five times the size of the ships being built in Europe at the time. This is what the Silk Route looks like now.
Chinese, Arabs, Turkmens, Indians, Persians, Somalis, Greeks, Syrians, Radhanite Jews, Romans, Georgians, and Armenians to name a few have been trading many other goods besides silk while exchanging cultural and religious values, technological, scientific and philosophical discoveries, or even arts and antiquities through this most ancient transcontinental trade route for well over 2000 years and as far away as they could carry their goods using wooden boats, wagons and camel caravans.
Global trade in ancient times has had a profound impact on the advancement of history and civilizations of the Eurasian people as a result of the constant movement and mixing of populations.
It is as difficult to imagine what the world would look like today had the silk road never existed, as it is to foresee the future of this ancient trading route spread globally. Rapid technological advances in transportation, communication, and e-commerce industries have accelerated the growth of international trade in recent times to a point that it has become an undeniable $18 trillion reality, where for instance long caravans of camels are replaced by a 17-day long direct freight train service from China to the UK. Nevertheless, both ancient and modern traders would wholeheartedly agree that there is one unique human factor that has remained unchanged over centuries of trading; we have always moved from place to place and traded with our neighbors, exchanging not only tangible goods but skills, ideas, knowledge, beliefs, science, arts, and literature, as well as crafts and technologies thus allowing languages, religions, and cultures influence and empower each other.
The Current Reality
This $18 trillion global trade is weaved around the notion that efficient sea, land & air transportation mediums have brought about seemingly endless trading opportunities as long as transportation cost to target market does not exceed its profit margin. This is how vast the global trade has grown.
Fortunately, due to the vast availability of data, it is actually possible to make sense of this overwhelming complexity, pinpointing the countries which export or import a particular product. There are also some advance analytic systems available which could determine the competition in terms of volume, pricing, growth in volume/ pricing, proximity to the target market and product space in terms of trade balance.
International Trade Data Visualization
A World of Oil uses international trade data to showcase 20 years of the global oil trade – who buys it, who supplies it, and how these relationships change over the years. See the volumes and values of oil traded between the world’s ten biggest importers and exporters for every year from 1995 to 2014.
The Globe of Economic Complexity by the Center for International Development at Harvard University, the UK Department for Business, Innovation & Skills has created this interactive visualization which reflects the very latest data available in UN. Countries’ exports, imports, and trade balances are displayed in a user-friendly, color-coded world map, along with downloadable time-series data and information on the top 10 trading partners and traded commodities. The visualizations can be further customized by selecting specific trading partners and/or commodities. The tool utilizes the UN Application Programming Interface (API), which currently allows up to 100 requests per hour.
Now let’s consider the following down to detail case studies for clear illustration of data analytic use at a product-specific level, so you won’t have to spend so much time and money attending worldwide international exhibitions chasing buyers/ sellers desperately.
Case Study Example #1 – HS 1902xxxx
Worldwide Export FS
As IBDM of a pasta factory, you are given the task to identify new markets for your company; your target market is worldwide, but you have no idea where to begin. So this is how it’s actually done:
Running a product level query you can find out:
- Which markets import pasta
- Who the competitors are
- What is a competitive price range
… and of course, once you know the 5-year history, you could easily project the numbers and forecast the future.
The following is a summary of market data current as of M12 – 2015
- Total Value Imported: $8,242,003,000 [Growing @ %2 annually]
- Total Quantity Imported: 5,605,612,000 kg [Growing @ %4 annually]
- Average Global Price: $1,470/Ton
- +%50 Share in World Imports: USA, Germany, France, UK, Canada, Japan, Netherlands, Belgium, Australia
- +%50 Share in World Exports: Italy %30, China %10, Turkey %5, Thailand %5,
- Mean/ Median Import Price: $1673/Ton & $1705/Ton
- Min/ Max Import Price: $1272/Ton Belgium & $2027/Ton USA
2015 – Imported Value
Arranged in order of priority and based on target market’s proximity, import tariffs thus the landed cost, you now have a clear view of which countries are most feasible to engage with so you won’t run into the famous ice cream overstock in Alaska problem. Once the target country and price thresholds are determined locating the buyers online seems like an easy task. In Belgium’s case, for instance, the following companies could perhaps be willing to consider one additional brand if their concerns are properly addressed:
- A. Lenaers Horeca- En Diepvriescentrum, Belgium GENK
- Biebuyck NV, Belgium RUISELEDE
- Devlieger Filip BVBA, Belgium KNOKKE-HEIST
- Rennes Horeca Groothandel Centrum COMV, Belgium WOMMELGEM
- Retail Partners Colruyt Group NV, Belgium MECHELEN
Case Study Example #2 – HS 0202xxxx
Worldwide Import FS
Case Study Example #3 – HS 030622
Worldwide Export FS Homarus Americanus – [not considering the impact of climate change]
Case Study Example #4 – HS 151219
Global Export Median Values – 2016
Case Study Example #5 – HS 2204
Caucasia Export Target Market Shift Projection
Case Study Example #6 – HS 1920 – Exported from IRI
- Export of HS 1902 (Pasta, Spaghetti, … ) is no longer feasible from Iran as the local vs international wheat price gap has been widening in unprecedented level since 2013; this trend is expected to last for well over a decade.
- Actual Values: 1993~2017
- Forecasted Values: 2017~2025
Case Study Example #7 Iraq Market Profile
- Iraq Market Summary
- Iraq Expanding Markets (2014~2015)
- Iraq Import Partners
- Iraq Import Restrictions/ Ban
- Iraq Internet Directory
Case Study Example #8 HS 6109
Case Study Example #9 NAFTA Termination Bluff
- Why threatening to terminate NAFTA is nothing but an empty bluff
Case Study Example #10 HS 32 – IRAQ