Effect of Globalization on International Ocean Transportation

EFFECT OF GLOBALIZATION ON INTERNATIONAL OCEAN TRANSPORTATION
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Table of ContentsAbstract3Introduction4The Maritime Industry41.).Technologies6(a). Oil Industry………………………………………………………………………………………………………………………………………..6(b.). Agriculture and Minerals………………………………………………………………………………………………………………….7(c.). Containerization and Trade……………………………………………………………………………………………………….……..82.). Labor………………………………………………………………………………………………………………………………………..…10Challenges in Labor…………………………………………………………………………………………………………………………..…...11Conclusion………………………………………………………………………………………………………………………………………..…11
Abstract
Globalization, in its simplest meaning, has enabled the world to become a global village. The world has now become smaller as a result of increased transport and communication brought about by increased growth of infrastructure towards the same. There has been increased linkages between individuals and therefore, much of what was considered impossible now possible. Among the industries to enjoy this has been the navigation industry. It has certainly had its share of benefits as far as globalization goes. In the earlier years, sea transport was through oars, where human beings would draw their vessels from one point to the other. Then came an upgrade to the use of sails, where the ships would be pushed into movement through the strength of the wind. Finally, came the use of internal combustion, which enabled man to go to the farthest of places and discover new navigation routes. All these were the beginning of globalization. This paper will look at the various ways in which ocean transport has been impacted by globalization.
Introduction
Throughout history, shipping has been a critical human activity especially in cases where development depended mainly on global and interregional business. This importance has led to transportation being branded as one of the four pillars of globalization, alongside international standardization, trade liberalization, and communication. As a result of the technological, economic, and socio-cultural factors, it was difficult to find a nation that has cushioned itself from the economic activities of the neighboring countries.
The decision by nations to open its borders for international trade has the capacity of increasing the economic prospects of the concerned country. The increased flow of goods and knowledge across continental boundaries is what is referred to as globalization. Globalization is seen as having a positive or adverse effect on international stability, the environment, and sustainable development. This paper discusses the impact of globalization on ocean transportation especially about how the maritime industry has been forced to transform its technologies over the years to meet the rising demands of globalization.
The Maritime Industry
The maritime sector is defined as the combination of all the elements that make ocean transport possible, from the network of vessels, the navigation routes, the ports on which these ships dock, the infrastructure and the markets as well(Corbett et.al.,2010). The infrastructure is made up of the container terminals and the factories too. Globalization and maritime transport have been historically complimentary.
Whereas in the earlier years, ocean travel is what kick started globalization, presently, globalization has outgrown the industry and therefore has even greater demands for it. As a result, the maritime industry has had to adjust some its elements, from its registry, technology and labor resources.
The industry constitutes the larger global freight system, which is made up of all the transportation networks, from railways, roads, and waterways, to air freight. When it comes to maritime transport, it is, therefore, a complementary element to the others in the transportation system. It plays a role in the carriage of goods, such as fuel, before it gets packed with the other forms of transport for their destined markets. Maritime transport can, therefore, be used either as a substitute or a complement to the current transport modes, depending of course, on the cost-benefit analysis of each mode, and the practicability of maritime transport in a given region Eyring (2005).
Factors that can be considered during this cost-benefit analysis include the nature of the goods, the sensitivity of the products, the time it takes for the delivery, the volume and the cost. It is almost obvious that low-cost modes of transport would carry a higher amount of goods, but would be painstakingly slow for delivery. Such a method isn’t always preferred for transport. Air transport, due to its speed and convenience, has come in to substitute maritime passenger transport. However, air travel helps in the transport of only passengers and just a few, high value and sensitive goods. Due to the costs and practicality of carrying bulky, high-value goods by air, maritime transport, therefore, still retains its importance and inability to be substituted by any other mode of transport Eyring (2005).
When it comes to other modes of transport, maritime transport has also replaced some. Cruise ships, ferries, and naval vessels, as well as fishing vessels, have all been embraced. This, however, has been largely dependent on the nature and availability of the supporting infrastructure.
The underlying driver behind globalization has always been the realization that there will always be a mismatch between resources and the people in need of these resources. In other terms, the resources and the people are not co-located. They might be separated by great geographical distances. As a result, there comes the need for transportation. In this case, not just transportation, but a global system, which will ensure that the resources and the regions in need, meet (Levinson, 2006).
1). Technologies.
(a). Oil Industry
In the early parts of the 20th century, crude oil was often mined and refined at the site, before being transported to their respective destinations around the world. Whereas this was a brilliant idea, the performance of a cost-benefit analysis and the introduction of economies of scale saw it impractical. Once the oil had been refined, it would then be packed onto some small containers ranging between 12 and 3o tons. Upon the use of economies of scale, such a procedure became deemed as too expensive. It was realized that it was cheaper to transport larger amounts of crude oil to the respective destinations, where they could be refined. This brought about a ten-fold increase of crude oil transported, which resulted in a drop in the cost of production per unit.
(b). Agriculture and Minerals
Initially, grains and minerals, in partic...