Global trade is in decline.

That is the general consensus, and by one traditional metric, it is.

Trade as a share of global output peaked in 2008 at the cusp of the global financial crisis and has never recovered.

But as reported recently by Josh Zumbrun of the Wall Street Journal, a new metric from a pair of young economists, Sharat Ganapati of Georgetown University and Woan Foong Wong at the University of Oregon, tells a different story: More goods are traveling greater distances than ever before.

The level of trade is usually measured via the dollar value of all exports and imports divided by global gross domestic product. As shown in the graphic below, that measure has on average been flat since 2008.

But the story is different if you consider this metric: the "ton-kilometer" - the total distance traveled by freight, multiplied by its total weight. It treats moving 5 tons 20 kilometers as the same as moving 2 tons 50 kilometers.

The Journal notes this captures “how much are we moving and how far are we moving it."

Source: Wall Street Journal

The two academics found that while the trade share of GDP peaked in 2008, ton-kilometers of trade surged 49% from 55 trillion in 2008 to 82 trillion in 2019, outpacing global-inflation adjusted GDP growth by 18% during this period.

Interesting.

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