Global trade routes are the sea, air and land corridors that carry goods between producers, suppliers and buyers in different countries. Most goods travel by sea: the International Maritime Organization puts shipping’s share of global trade at about 90%. Air is the fastest and most expensive option, and road and rail carry goods across land borders.
The volumes involved are large. World merchandise exports were worth about $22 trillion in 2021 (US$22.3 trillion according to UNCTAD’s Handbook of Statistics 2022), 26.5% more than in 2020.
What are global trade routes?
Trade routes are the network of connections between countries, regions and continents along which goods travel. They exist by sea, by air and over land, and each has its own advantages and drawbacks depending on the goods, the distance and other conditions such as cost and urgency.
Sea transport is the most common and most cost-effective mode, which is why it carries the bulk of world trade. Air freight is the fastest but the most expensive, so it is usually reserved for goods such as electronics, medicines and perishables. On land, trucks and railways move goods within continents and across neighbouring borders.
Why trade routes matter
Trade routes let countries specialise in the goods they produce best and sell them abroad, which raises productivity. They support growth and jobs, lower prices and widen the choice available to consumers. Trade has been part of the rapid growth of economies such as China, India and Brazil, and established industrial economies depend on the same routes to stay competitive and meet their consumers’ demand.
How these routes fit into the wider system of buyers, sellers, banks and customs authorities is explained in how global trade works.
What affects a trade route
Several factors affect how well a trade route works.
Infrastructure
Routes depend on ports, airports, roads and railways. Efficient, well-maintained infrastructure lowers transport costs and gets goods delivered faster.
Political stability
Political instability can disrupt a route, causing delays and raising costs. Stable governments that offer a predictable business environment attract foreign investment and more trade.
Trade agreements
Agreements between countries can change which routes are used. Free trade agreements make cross-border trade easier and cheaper for the companies that qualify. Tariffs and other barriers do the opposite, as explained in our article on tariffs and trade barriers. Because each destination country applies its own duty rates, the choice of destination market also changes the duty a shipment pays; our article on country-specific tariff variations looks at this in detail.
Technology
Technology has made international trade easier and cheaper. Containerisation, online platforms and blockchain have improved supply chain management and lowered transaction costs.