19th April 2010

On the passenger side of things we all may know somebody who is stuck abroad, or can’t go on holiday because of the grounding of planes, but what’s the volcano’s effect on international trade?

According to Bill Schmick, an investment advisor representative and portfolio manager with Berkshire Money Management in the US, the international air cargo business is responsible for around 35 per cent of total global trade annually - the equivalent of close to $3 trillion. This accounts for approximately five per cent of 2008’s $10 trillion global GDP.

Up until Volcanogate erupted last week around half of these goods were destined for Western America, particularly perishable goods such as fruit, vegetables and flowers, most of which are shipped by air. Bill also claims the more important bits of electronics, microchips, pharmaceuticals and medical devices, are transported via the air.

All in all, a prolonged stoppage of the transport of such goods in this manner could begin to impact worldwide GDP by as much $100 billion per month.

That’s a head-spinning figure.