Cost is an important factor which trading industries will have to consider. In Europe and North America the proportion of development of road and rail is the highest at 25 to 35 per cent. Thus, trade is predominantly transacted by road and rail. Cargo between countries without a common border is carried mainly by sea because of the growth rates for air freight are more than double those for shipping in recent years. In comparison to transporting via ocean freight and air freight, maritime traffic is considerably much cheaper.
Airlines bills a chargeable weight. Chargeable weight is calculated from a combination of the weight and size of a shipment. Whereas, sea carriers charge per container rates for shipping in standard containers. For example; while a standard shipment shipped from Singapore to Europe costs Sgd5000, the same shipment might cost up to Sgd35,000 via air freight. While weight can factor into the price from sea carriers, their charge tends to be based more on the size of a shipment. Thus, with larger and heavier shipments, it is much cheaper to ship by sea.
Thus, the main advantage of marine transportation is its economies of scale making it the cheapest per unit of all transport modes which is one of the important factors as to why maritime traffic is growing. According to data statistics UK, US, EU, NZ and many other countries’ marine government data statistics show that maritime traffic holds the highest transportation statistics in the country.
Growth in World Trade via globalization As mentioned in the introductory paragraph, the main reason behind the growth in maritime traffic is the growth in globalization. In the past, the WTO provided a new cycle to world trade whereby China’s economic opening led to their admission to the WTO in 2001 causing its exports to increase 4times within 5 years. Another example of integrated markets boosting international trade are exports from Mexico to the USA within 6 years of NAFTA being established. This measure taken by WTO helped newly-industrializing emerging economies, particularly China and India, for energy and mineral resources.
These resources had to be transported regionally via marine traffic. This led to increasing quantities of goods being transported from far-distant countries via ships. (http://worldoceanreview. com/en/wor-1/transport/global-shipping/3/WTO). The growth in globalization causes the growth in maritime traffic as well. This had and is still causing a steady growth in maritime traffic as well. This is evident via the statistics review by the United Nations marine trade which shows that Around 80 per cent of the volume of international trade in goods is carried by sea, and the percentage is even higher for most developing countries.
Thus, globalization has played a huge role as to why maritime traffic has and is growing. •Effective mode of transportation Physical properties of the various modes of transportation available also play a key role as to why maritime traffic is growing. Due to the physical properties of water conferring buoyancy and limited friction, maritime transportation is the most effective mode of transportation to move large quantities of cargo.
The approximate maximum takeoff weight for air cargo planes is~910,000. world’s longest, heaviest trains. Demonstration union train-WTO”). Road transportation have both weight and distance constraints which will be the least option to consider for bulk and far distance transportation. Whereas, bulk carriers ships are designed to carry specific commodities. They include the largest tankers, the Ultra Large Crude Carriers which are up to ~500,000 dwt. (Aragon, James R. ; Messer, Tuuli Anna (2001).
Master’s handbook on ship’s business. Cambridge, Md: Cornell Maritime Press). In July 2009,the global merchant fleet consisted of a total of 53,005 vessels. In all, the global merchant fleet has a capacity of ~1192 million dwt. (http://worldoceanreview. com/en/wor-1/transport/global-shipping/3/). Thus, it is evident that maritime transportation is the only feasible mode of transportation for bulk shipping such as coal, minerals, oil tankers and other bulky goods for companies which needs to ship a large amount of goods at once, with longer lead times.
This is one of the reasons as to why there is a growth in maritime traffic. (III)Conclusion Despite the fact that maritime transportation has high terminal costs since port infrastructures are among the most expensive to build, maintain and improve; maritime traffic is growing. As mentioned above, due to reasons such as cost efficiency, global trading and most effective transportation of heavy and bulky goods with long lead times; as long as there is world trade there will definitely be a demand and growth in maritime traffic.