Effect of Globalization on International Ocean Transportation

Effect of Globalization on International Ocean Transportation Name: Institution: Date: Table of Contents TOC \o "1-3" \h \z \u Table of Contents PAGEREF _Toc14895117 \h 2 Introduction PAGEREF _Toc14895118 \h 3 How Ocean transportation has transformed its technologies PAGEREF _Toc14895119 \h 4 The growth of Ocean Shipping Companies PAGEREF _Toc14895120 \h 5 Growth of Ocean Shipping Companies, Case Study; COSCO PAGEREF _Toc14895121 \h 6 Effects of Globalization on Ocean Transport PAGEREF _Toc14895122 \h 7 Negative Side effects of globalization to the marine transportation PAGEREF _Toc14895123 \h 8 The Future of Ocean Transportation PAGEREF _Toc14895124 \h 9 Conclusion PAGEREF _Toc14895125 \h 10 References PAGEREF _Toc14895126 \h 12 Introduction Water transport has played a key role in human civilization. Water transport has offered a cheap and reliable system to help move bulky goods from one point to another. It is evident in history when several of Sui dynasty which dug nearly 2000km canals throughout their territory and diverted waters to these canals to help create reliable inter-territory transport routes CITATION Vic12 \l 1033 (Xiong, 2012). This was long before other means of bulk transport like roads and rails were invented. In other areas of the world, water transport continued to play a key role in transport, combat and developing their territories. Water transport of the ancient world still dictates the present world geography i.e the New York was situated near river Hudson which offered good ports for docking for ancient traders CITATION Joh10 \l 1033 (McDonald & McMillen, 2010). New Orleans is also another city which was established because of its convenience of transport and connection to the other world CITATION Joh10 \l 1033 (McDonald & McMillen, 2010). Throughout the world, many ancient cities were near the coast or at big river mouths because of the convenience of water transport. Even in the age of faster transport systems like air transport, water transport and especially marine transport has continued to play a dominant role in the civilization of mankind. Since the start of the industrial era, globalization has increased and need to transport bulky goods and raw materials have continued and the world has relied on ocean transport for the same. Ocean transport became a critical piece in international trade such in the late 19th century, Africa and Asia had to separate by a canal (Suez Canal) to facilitate ocean transport. Barely 5 decades later, north and south America were separated by another canal (Panama Canal) to create new shipping routes between the two continents. This shows the role of ocean transport in the global economy and the effect it has. Over the centuries and especially in the last century, globalization and ocean transport have developed a symbiotic relationship and have become a key pillar in the world economy today. This paper discusses the effect of globalization on ocean transportation especially in relation to how the maritime industry has been forced to transform its technologies over the years to meet the rising demands of globalization. How Ocean transportation has transformed its technologies In the last century, there have been giant leaps in technological advancement. One of the key gamechanger was computing technology. The computing technology has also been applied extensively in the ocean shipping industry and changed the way the industry works. Computing has changed nearly every facet of ocean shipping and has helped the industry optimize its operations and also increase its safety records. For example, early in the 20th century when the best technology available to the marine industry was radar, one of the greatest human disasters happened and the titanic sank. Radar technology was not sufficient to detect icebergs and avert them in time. Today, ships are equipped with computerized technologies that draw data from very sophisticated and accurate sensors. The technology helps ships maintain a very good safety record and in the last few decades, there isn’t a ship that has sunk because of hitting unseen objects in or on water. Radar technology and computing have helped marine navigators and captains improve the safety records of the industry and today nearly all goods which are shipped worldwide always reach their destination. Secondly, there are new technologies which have been developed such as GPS which help captains and marine navigators travel their preplanned routes safely and with great accuracy hence avoiding obstacles or severe weathers. In the past, these technologies were not available and seamen at sea were confronted by the unknown which led to the loss of many goods and lives in the sea. Today, they receive weather updates in the real-time and they also have GPS (Geographical Positioning System) rather than relying on the outdated devices which had big error margins. Other technologies which have since become outdated include lighthouses which were used to guide ships in shallow waters and near the land CITATION Lea09 \l 1033 (Learning Media Staff, 2009). Because of the improved technology, ships have become bigger and safer. Thirdly, means of propulsion had become a bottleneck for water transport for centuries. The steam power technology was revolutionary but by today’s standard, it cannot help run the world. Another technology which is a byproduct of the second world war has revolutionized the shipping industry. Nuclear power has been harnessed to become a cheap and reliable source of power in the ocean transport industry CITATION Mel13 \l 1033 (Tekant, 2013). Today big ocean transport vessels use nuclear power and they are able to carry more TEUs. One of the major technologies that pushed globalization especially after world war II is containerization. Previously, goods on transit needed more space and manual sorting at the ports and inside the ships CITATION Pau111 \l 1033 (Wetherly & Otter, 2011). Containerization eased the work of port operators, eased loading and offloading, shortened shipping times, eased congestion in ports and reduced damage and theft of goods. Since the containers are standardized, they have become the standard unit of measuring a ship’s carrying capacity. Containerization has become the invisible backbone of international trade and globalization. The growth of Ocean Shipping Companies Over the years, ocean shipping companies have grown and though some have gone under because they were unable to keep up with the competition or due to bad management and strategic approaches, most have thrived and expanded. These companies have become invisible roads between countries and continents. They have supported globalization and enabled just in time manufacturing even when the clients are halfway across the globe. Majority of the companies ship in international routes and are registered to other countries often different from the mother country of the company. For example, Maersk Line which is a shipping company founded and headquartered in Denmark has several of its ships registered in Panama for tax avoidance purposes. The growth of these companies illuminates the way technology and globalization has changed the ocean transport system. The following section details the growth of COSCO to become the third-largest shipping company by size and by fleet size since its inception in 1961 CITATION Dus16 \l 1033 (Braden, 2016). It has continuously expanded with the Chinese rise to be a global superpower. Growth of Ocean Shipping Companies, Case Study; COSCO China Ocean Shipping Company (COSCO) is state-owned and it is headquartered in Beijing. It has 1114 ships which include 365 dry bulk vessels the total container capacity of the company’s fleet is 1,580,000 twenty-foot equivalent units (TEU) and a tanker fleet of 120 vessels CITATION COS19 \l 1033 (COSCO, 2019). The operations of the company are worldwide. COSCO is in itself a conglomerate of seven listen to companies and operates nearly 3000 subsidiaries across the world. The seven listed companies and the cities they have headquartered are; COSCO Pacific Ltd, COSCO International Holdings Ltd, China COSCO Holdings Co. Ltd, China International Marine Containers (Group) Co. Ltd; all four are headquartered in Hong Kong. China COSCO Holdings Co. Ltd (Shanghai), China International Marine Containers (Group) Co. Ltd (Shenzhen), China International Marine Containers (Shenzhen) Co. Ltd, COSCO Corporation (Singapore) Limited (Singapore) & COSCO Shipping Lines (Japan) Co., Ltd. Over the years, the company has done several acquisitions and mergers to become the behemoth shipping company it is today. Since when it was founded in 1961, the company continued buying more ships over the course of the decades. The strategic mergers and acquisitions it made through the years helped it to dominate shipping especially in China CITATION Jas17 \l 1033 (Jiang, 2017). As a state-owned corporation, the...