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The global reach of shipping

International trade and the maritime industry

Since the dawn of civilization, societies have traded via the sea. A lot has changed over the millennia, with the methods of transportation becoming more effective and the diversity of goods increasing. So what role does maritime trade play in the modern world?

The shipping industry comprises a significant amount of global goods transportation—a staggering 90 percent. In 2014, 9.84 billion metric tons (German language link only) were transported over approximately 5,340 nautical miles. This makes shipping the most common form of cargo transportation by far. So why, as technology has developed, has the norm not shifted to other methods, such as air freight? And how has shipping maintained such prominence on the trade scene for so long?

The most cost-effective method?

As with any practice that is centered on generating capital, goods transportation strives to achieve maximum profit by minimizing operational costs. While aircraft may provide a faster transit time, the associated costs are significantly higher. In certain situations where there is a tight delivery deadline to meet, this may be the best option. On the other hand, if organizations are aiming to operate profitably and promote business growth, choosing the more cost-effective approach is the most valid option.

The environment as pressing an issue as ever

In the 21st century, humanity is more aware than ever of the importance of saving natural resources and reducing environmental impact. In comparison to an aircraft or a truck, emissions from ships are significantly lower. Indeed, maritime cargo transportation can be considered as the “greenest form of mass transport.” This fact is increasingly reinforced by strict environmental regulations, such as MARPOL and the VGP.

Sea trade and economics

The role of maritime transportation constitutes an integral part of the economy for a large number of nations, both with advanced and developing economies. Whether it be raw materials alone, materials sent to another part of the world to be made into new products, or finished products themselves, the role of sea trade is responsible for a considerable amount of a nation’s GDP. The industry is also a major employer, with over one million crew members of all nationalities operating the world’s fleet of merchant ships.

Linked to this, too, is the rapid rate at which globalization has taken off. The wide-reaching scope of shipping routes connects countries everywhere in the world. The trade of goods spreads cultural influence and economic growth, as well as increasing the interaction between different nations. Some even consider maritime transport and trade to be the backbone of globalization.

What does the future hold?

With freighting by sea remaining the principal global method, what can be expected for the future of the industry? It is likely that automated cargo ships will emerge in the near future. Not only will this be an impressive feat of technology, these vessels are also predicted to reduce emissions—potentially helping tackle the environmental issues shipping is marred with. Larger vessels are also in construction, as container ships with capacities of over 20,000 twenty-foot equivalent units (TEU) are expected to be commissioned in 2018.

In conclusion, transporting cargo via the sea is playing as prominent a role as ever. With the world’s population at its highest in history, the demand for goods is unparalleled. Modern vessels are able to transport more goods in a single journey than any other method. Paired with the comparably low emissions and costs and new technologies presenting greater opportunities to improve the process, shipping is likely to be at the forefront of trade for generations to come. 

Don’t miss the second part of this series on shipping routes, where we take a closer look at the cruise industry.

 

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