Transporting commodities: transformation in space
Many producers are in remote locations, often in emerging economies. Traders need to deliver commodities to consumption centres on the other side of the world. They can increase their profitability and generate more physical arbitrage opportunities by lowering transportation costs.
Getting product from one part of the world to another brings many different modes of transport into play. Below are the main inland modes of transportation.
Just as commodity trading firms need onshore facilities to load, offload, store and blend cargoes, so they need ships to carry their cargoes across the oceans. Shipping therefore plays a vital part in commodity trading.