Economic Growth and Development of Maritime Transport

Maritime transport refers to the transport of people and commodities by water through the use of water vessels such as ships. Maritime transport plays a very important economic role for many states based on its contributions towards economic development. The former secretary-general of the United Nations (UN), during the World Maritime Day held during 29 of September, Ban Ki-moon stated that maritime transport is the backbone of International trade and global economy. The world’s economy mainly depends on import and export between countries which relies heavily on maritime transport. The thesis for this research paper is to evaluate how development of maritime operations such as shipping and harboring have enhanced international economic growth and development.

Introduction

Maritime transport has been of great importance to human beings throughout history as it has led to the development of international trade and trade between regions. Apart from trade liberalization, international standardization and communications, transport has been termed as one of the main foundations of globalization. By opening their coastline borders and markets to allow for foreign trade and investments, many states have seen amazing economic growth due to increase in trade and investment activities. Apart from trade and investments attributed to the developments of maritime transportation, flow of goods, resources and knowledge among nations has been improved. Maritime transportation has gone beyond in transforming its technologies, labor resources and its logistics over decades to meet the increasing needs for economic growth and development. Economic growth and development and maritime transport have a symbiotic relationship whereby the economy requires for maritime transport, while maritime transport has enhanced economic growth. There are a number of aspects in which development of maritime transport can accelerate international economic growth and development. These aspects include:

Improved free flow of trade by ship

Approximately 90% of the international trade has been through the use of maritime transport. Through the increased liberalization of the maritime transport industry, the trend in globalization has improved by enhancing the economic structure and advancement of shipping services to meet delivery requirement in due time among other maritime transport development. The amount of goods carries by seaborne containers had increased to around 1.7 billion metric tons by 2015 from 100 million metric tons in 1980 (Statista 2016). The graph below shows the trend in the amount of loaded ships in the global maritime trade from the year 1970 to 2016.

Source: Statista Transport & Logistics.

From the trend portrayed by the above graph, it shows that the volume of goods transported by ship has been increasing over the last four decades. This has been contributed by increasing demand for goods and increased efficiency in maritime transport. Maritime transport has remained to be the main mode of transporting commodities by the world’s nations, although the rate at which cargo is transported by air has increased more compared to maritime transport over the last decade (World Bank 2002). Maritime transport also acts as a complement for other forms of transport facilitating the increased transport of goods from one region or state to another. Effective trade facilitation helps in reducing the transportation cost hence improving economic sustainability of the maritime transport.

Creation of job opportunities

                          The maritime transport has contributed to a significant number of job opportunities worldwide. This sector has offered many opportunities from the ports, maritime, waterways and freights. Employment opportunities created by the maritime transport industry include: marine engineers, naval architects, motormen, underwater photographers, cargo engineers among others. Many ports around the world have provided jobs for millions of people including the clearing and forwarding departments and those involved in the offloading of cargo on arrival. With the increasing demand for maritime transport services, more labor is required hence creating more job opportunities. From research, 70% of the job opportunities offered by the maritime transport are knowledge intensive calling for more maritime officers and professionals hence enhancing maritime knowledge and technology.

Environmental Sustainability

                          Economic sustainability must take into account the environmental aspects which include protection of the environments and ensuring that the dignity of ecosystems is upheld. There have been a number of efforts in ensuring the environmental performance in the maritime transport industry is improved. This has been facilitated by the establishment of frameworks and institutions to handle issues related to environmental degradation from oil spills and atmospheric emissions by maritime vessels. The graph below shows total estimated volume of detected oil spills in the Baltic Sea from 1988 up to 2015.

Source: HELCOM Response, 2016

Reduced in the incidences of oil spills reduces the vulnerability of aquatic organisms and reducing the cost of cleaning up the oil. Following the increasing concerns about environmental protection, port are equipped with advanced reception facilities for handling cargo residue and generated wastes at the ports.

Advancement in Knowledge and Technology

Due to the increasing need of trade commodities between states and regions, the need for more maritime transport activities such as shipping is growing every year. As a result of this, more skilled labor is needed especially in the major seaports and the adoption of advanced technology in both sea vessels and ports operations to cope up with the demand. For example, the adoption of containerization has increased over time to transport containerized cargo. The increasing demand for professionals in the sectors has also contributed to the development of marine knowledge. Through the expansion of economic activities by member states of the World Trade Organization (WTO) are negotiating to free up the world market so that ease access of information and reduced resistance to the flow of commodities between countries can be minimized. 

Improved standards of living

                          The maritime transport industry has played a vital role in the improvement of living standards worldwide. The sector has been able to reduce the poverty levels for many countries especially from acute poverty levels. Through creation of job opportunities and provision of goods and services, the levels of living standards have been increased. For example, the World Food Program under the United Nations has been able to supply relief food to hunger stricken areas in the developing countries and has been able to assist 80 million people around 80 nation each year. The maritime transportations has played a major role in the transportation of these relief services for realization of the program. Also due to expansion of economic activities such as trade as a result of the maritime transportation, commodities have been made more and easily available to the different parts of the world.  Nations have also been enabled to export their domestic produce easily to other states due to improved maritime transportation hence boosting their Gross Domestic Product (GDP). Maritime transport has helped in the expansion of economy in the developed nations, for example, in the U.S., 26 percent of the GDP of around $17.4 trillion was accounted from coastal ports.

Improvement of Ports

                          The volume and type of cargo received at ports determines the facilities to be used. As the economy structure changes, the ports also change accordingly to meet the requirements. Every port is usually equipped with the appropriate facilities that are designed to meet the size of trade it serves. The development of ports in terms of facilities and logistics helps in the improvement of delivery of goods hence supporting the development of trade.  Ports are also a source of income when they charge foreign ships for using their ports. The system of charging depends on the volume of cargo and the kind of cargo operation.

Conclusion

                          From the discussion above, it is evident that the maritime transport development has done a lot in contributing towards global economic growth and development from improving standards of living, improving free flow of trade, creation of job opportunities among other provisions. Despite the enormous contributions of the maritime industry, the facts are hidden from the view of many people. Development of the maritime transport sector can open great opportunities for a nation towards the advancement of its economy.

However, maritime transport is face by a number of challenges which include maritime safety, piracy, tradeoffs and environmental implications such as oil spills and emission of greenhouse gases. Regulations have also been a challenge as the marine transport is confined to laws, regulations and standards. International economic growth and development is therefore unseperatable from maritime transport.  

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