Business
8. Conclusion
America–East Asia route, for instance, a large proportion of the total trade falls under these service contracts. The latter seem to reflect a true partnership between shipper and carrier, unlike the more confrontational shipping arrangements of the past. It is hoped that the partnership philosophy based on perceived mutual benefit will prevail in the twenty first century.
Container line operations have grown spectacularly in the last half century as Levinson describes vividly in his recent account of “how the shipping container made the world smaller and the world economy bigger” (Levinson, 2006, front cover). There is still, however, a large volume of baled, crated, bagged, palletised, wheeled, lashed down, loose and “other” general cargo on ships of various size in both tramp and liner service on all our seas and oceans. They have many of the same empty space, ballast requirements, directional imbalances in cargo movements that have been mentioned above and it seems certain that there are commodities that will never fit into a container. In a real sense this makes the maritime scene more interesting.
space more evenly to the demand for it when market conditions change. Of course, this requires a certain amount of operational flexibility. And the carrier’s flexibility needs to be weighed against the shippers’ usual need for reliable and uninterrupted service.
All told, “flexibility” enters the picture of both tramp and liner shipping in many different shades and colours. It can be a general characteristic and expectation of tramp-shipping operations. It is a built-in quality of a steamship line’s network that interlocks various trade routes and services. Its opposite, inflexibility, can be inherent in the operations of single purpose megaships.
Flexibility can relate also to a philosophy or grand strategy of company operations which favours a thoughtful adaptability to market conditions and customer needs.
*University of Washington, Seattle, USA. Email: [email protected]
Endnotes
1. See Fearnleys Review 2008, tables on world seaborne trade, p. 48.
2. Actually, there is a span of almost three centuries between the first Spanish galleon transpacific round trip, Acapulco to Manila and return, and the mid-nineteenth century US-built clipper ships plying the Australia- Britain route.
3. See, for instance, the three “flow maps” depicting colonial trades, circa 1775, on pp. 198–199 of The Times Atlas of World History.
4. Despite the potential for shifting from one trade to another and despite the fact that the OBO was designed for that very purpose, the combined carriers, today, tend to stick exclusively to one type of bulk commodity trade and the fleet has dwindled in number.
5. As calculated from Fearnleys Review 2008. Most of the statistics that are the basis for the analysis of the bulk trades in this chapter come from Fearnleys Review 2008 and from SS&Y Monthly Shipping Review, January, 2009.
6. On paper today it is an institutional bloc, however, there are still quite a few unintegrated parts.
7. See SS&Y Monthly Shipping Review, January 2009, p. 5, which differentiates between coking and thermal coal in the seaborne coal trade data.
8. Rice is not included in the data on which this analysis of the grain trade is based. Soybeans, technically not a grain, are included, however, in the calculations by Fearnresearch.
9. See Fearnleys Review 2008, p. 48.
10. Of course, the Panamax-size, or smaller OBO vessels used in these earlier days (mid-1960s) were easier to route; shifting trades was easier, too.
11. In fact, some of the feeder line carriers move progressively from one
“spoke-end” port to another, adding connectivity to the network. Some of the ports in these “loops” are favoured with faster cargo-transit times than others.
12. 70% is not, of course, a full indication of the traffic on this route. There are container ships, large and small, serving only segments of the route.
Calculations of the 2007 inter-core container volumes are drawn from the trade statistics section (numbers provided by MDS Transmodal) of the September, October and November issues of Containerisation International (2008).
13. Evergreen, Maersk, and other container lines have taken delivery of even larger ships recently, creating for the time being an excess capacity for which there is no short-term, pleasant (in cost terms) panacea in sight for the carrier, and unease for the shipper who needs steady, reliable, reasonably priced service.
14. See Containerisation International, May, 2008, p. 55.
15. See Containerisation International, September, October and November, 2008, Trade Statistics sections. Heavy intra-Asia traffic and containers moving in and out of segments of the end-to-end Far East–Europe route (e.g. bidirectional container flows on the Europe–South Asia and Middle East, and North America–South Asia and Middle East routes) add to the Far East–Europe end-end-to-end traffic and make Route 2 (see Figure 7) the most significant connection of all.
16. Assume that a combined carrier is fixed on a dry bulk 30-day voyage, laden outward and ballast return, promising a net profit of $150,000 or
$5,000 daily. That might appeal more to the operator than combining the dry bulk trade with a ballast-reducing oil trade back to the original loading range if the combination of the two trades results in a 50-day
voyage with a net profit of $200,000 or $4,000 daily. The daily profit is, in a sense, a “running bottom line”.
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Chapter 4
International Trade in Manufactured Goods
Mary R. Brooks*
1. Introduction
Shipping, on the scale we see today, would not exist were it not for globalisation, and the evolution and restructuring of the world’s economies after World War II.
The increasing specialisation of the world’s economies, and the desire for goods or food made or grown elsewhere, along with increasing urbanisation, has altered the demand for transport. In this chapter, the focus will be on global trade in manufactured goods and the role that shipping plays in this market.
Cargo transported by ship falls into two broad categories – bulk and unitised.
The former usually travels via tramp vessels and includes both liquid bulk – mostly crude oil and oil products – and dry bulk, the largest of these being iron ore, grain and coal. As the ocean transport of unitised cargo is the subject of this chapter, bulk cargoes will only be discussed where it is necessary to supply context.
In the bulk sector, the world of shipping has followed a traditional growth pattern. Based on tonne-miles, crude oil, oil products and dry bulk commodities are the most important trades in ocean shipping (Figure 1). Unitised cargo (predominantly containers, and included in other in Figure 1) is not dominant in terms of tonne-miles demanded; it accounted for 25 to 28% of tonne-mile demand in the 1990s, up from 19.9% in 1970, and it continued to grow in importance until 2007.1
However, shipping demand in tonne-miles is only one measure of importance.
In value terms, trade in manufactured goods drives world prosperity, as manufactured goods account for about 70% of world trade in value terms. This chapter provides an overview of world trade in manufactured goods, the primary user of containerised liner shipping. It begins by identifying the key
manufactured goods traded globally, the leading trading nations and the accompanying trade flows. As air cargo is the principal competitor of maritime transport for inter-regional trade in manufactured goods, the role of air cargo is examined briefly. To complete the picture, the trader’s view of shipping as a mode choice is discussed and conclusions drawn about what the future may hold for the transport of manufactured goods.
Figure 1: World seaborne trade 1985–2007
Source: Created with data cited by UNCTAD (2009), Review of Maritime Transport 2008, Table 5, p. 15 and equivalent tables from prior years’ editions.