Significance of Maritime Transportation - Assignment Example

IS MARITIME TRANSPORTATION LOSING OUT ITS COMPETITIVE ADVANTAGE OVER OTHER MODE OF TRANSPORT LIKE AIR AND ROAD TRANSPORTATION? Table of Contents Introduction 2 2 Significance of Maritime Transportation 2 3 Maritime Transport vs. Other Transports 4 4 Cost of Marine Transportation 5 5 Escalation of Demand in Maritime Transportation 5 6 Environmental Factor 6 7 Conclusion 7 1 Bibliography 8 1 Introduction Maritime transportation had progressed into an imperative human activity throughout the history, mainly where the prosperity depended principally on foreign and interregional trade. The marine transportation system is a network of dedicated vessels, the ports they stopover and transportation infrastructure from factories to terminals to distribution centers to international as well as domestic markets. Maritime transportation is an essential complement to and intermittent substitute for other modes of freight transportation. As of today, for a lot of commodities and trade routes, there are no direct substitutes for waterborne commerce’s. The Maritime Administration is executing a leading role in relieving congestion in US ports, which assists easing the congestion all over the national transportation system. Strategically planned utilization of marine highway have lead to reduce stress on the overall transportation system in order to facilitate highways to bear load of the amplified traffic that is anticipated in the approaching decades. The exceptional and imaginative utilization of vessels and other resources has enthused significant opinion about how the waterborne transportation assets be capable of filling imperative transportation gaps and be utilized as recovery assets. Marine transportation is an essential, if occasionally less publicly visible element of the global economy. 2 Significance of Maritime Transportation It is not an overstatement to articulate that the maritime transportation sector is crucial to the proficient organization of the entire economy. Both domestic and international trade relies greatly on this sector’s facilitative support to gain competitive lead. As such, it is paramount for every economy to build up a dynamic and well-organized maritime transportation sector to shore up its maritime industry and economy if it is to maintain its position as a competitive trading nation. But to attain such level of achievement, the challenges besetting the sector must be resolutely met head on, and the competition be fought off at all fronts. Global goods movement is a vital element in the global freight transportation system that comprises of ocean & coastal routes, inland waterways, railways, roads and air freight. In some cases, the freight transportation network connects locations by multiple modal routes, functioning as modal substitutes. A primary example is containerized short-sea shipping, where the shipper or logistics provider has some extent of choice on movement modes of freight between locations. Though, worldwide maritime transportation is more commonly a complement to other modes of transportation. This is principally accurate for intercontinental containerized cargoes and for liquid and dry bulk cargoes, for instance oil and grain. Maritime transportation offers several other significant marine transportation activities which comprises of passenger transportation i.e. ferries and cruise ships, nationalized defense systems (Naval vessels), fishing & resource extraction and navigational services. Marine transportation is an essential component of the U.S. transportation system and has proved to be a necessary element to the nation’s stabilized economy. By the year 2020, it is anticipated that the international trade will grow up to triple with over 90 % moving by means of the sea. The United States is progressively more enjoying the benefits of mounting international trade as trade barriers are eliminated. As of current situation, trade flows of US are on the rise in comparison to the gross domestic product {GDP}. In the fiscal year 1996-97, an approximate figure of goods worth $590 billion i.e. around 42 % of the total value of U.S. foreign trade, were carried on the ocean. By comparison, air and overland transportation accounted for 26 and 32 %, respectively by value. United States of America, solely imports a hefty figure of 10 million barrels of oil daily, which undeniably requires outsized storage and logistics transport facility , more than capacity of any other transport systems. 3 Maritime Transport vs. Other Transports The aviation industry has reinstated most ocean liner passenger transportation and transports significant cargo value but is capable of hauling with petite volume fraction of the valuable and lightest cargoes; while a significant mode in trade value, aircraft moves much less global freight by volume and at significant energy per unit shipped. Maritime transportation is eventually most cost effective and environmentally friendly as compared to other modes. Consequently, internationally it is till today one of the most viable modes of transport. The main advantage of marine transportation is that it is the cheapest per unit of all transport modes making it a perfect choice for heavy industrial actions. Railways and road transportation are not capable to handle such outsized and bulky load and passenger traffic at such geographical extents. The biggest advantage of maritime industry is containerization of cargo and specialization of ships, giving an extra competitive edge over aviation as well as rail-road sector. Maritime traffic maintains its leading position in the ways of international trade. An approximate of 30,000 billion tons of freight cross the oceans annually while, 8,000 billion tons transported by the railways and 4,000 billion tons transported by the roads. 4 Cost of Marine Transportation The cost effectiveness of maritime transportation is based on duo technical revolutions: The unitization of the linear shipping business, and Bulk shipping These both elements had played a significantly major role in sustaining the comparatively low cost of marine transport. With implementation of the “economics of scale” like empowering the industry with high speed payload handling systems and combining the entire transport systems, the costs of bulk transport has been condensed to such point that usually it is cheaper for the large scale manufacturers to import raw materials via sea from suppliers thousand of miles away in as compared to land from vendors available only a few hundred miles. With soaring fuel and logistics prices, there are a lot of shippers frequent to air shipping have switched their concentration towards marine transportation due to the cost-effectiveness. According to International Air Transport Associations (IATA) the containerized marine freight had arisen up to 15 % from 2000 – 2005 which is more than twice over the growth rate recorded for the air cargo. The IATA also acknowledged the fact that the latest container-ships are quicker and cheaper to maneuver. The switch from coal to oil was motivated by a desire to reduce costs and improve vessel performance. A cargo vessel is liable to reduce up to 78 % in fuel and achieve an approximate of 35 % in cargo space by adapting to the internal combustion propulsion. 5 Escalation of Demand in Maritime Transportation In the United States, efficient well-managed ports and waterways benefit every American by keeping waterborne commerce flowing. This in turn keeps shipping costs down and ultimately makes products more affordable. The demand for waterborne cargo initiates a chain of economy activity, which contributes to the overall national economy. This activity alone has generated 17.9 million jobs throughout the country. In UAE, with more infrastructure developments reaching their final stages of completion, marine transport in the Emirates is set to become a popular mode of transport. The demand for both private and public transport is set to reach a high point in next two years, when several waterfront projects catering for communities of more than 300,000 people are completed. Companies involved in the shipbuilding business anticipate demand for boats to triple as the coastline of Dubai is being extended from the 72.5 km to 1500 km scheduled to be completed in 2010. In Canada, traffic through Canadian ports augmented in 2004. Ports handle an average 455.3 million tons of goods, up from 443.8 million tons in 2003. Marine transportation carried 48% of the value of Canadian international trade and is the main sort for shipping freight overseas. 6 Environmental Factor Up to now the Marine transportation is the most environmentally gracious mode of transport. The ships operate on the low energy and also generate lowest CO2 emission intensities as compared to the railways, which requires higher amount of electricity or coal to operate nad generates much more pollution and harmful environmental gases. As per the analysis conducted by the environmental experts it is revealed that if air freight is transported by ships the CO2 emission per ton-kilometer would be reduced by 90%. This way several barrels of valuable fuel and monetary losses can be saved of. Now days, the marine transportation is also seen as an exceptionally secure mode of transportation. As per the Montreal Port Authority, the marine transportation had witnessed 75 & 14 times less incidents of accidents in comparison with road and rail transport respectively. 7 Conclusion Maritime transportation is one of the most significant uses of the ocean. In the competitive race over the title of “Best Transportation” the marine transport is undeniably the winner in this modern era. Due to its boundless geographical approach the maritime transport has proved to be a leader in terms of capacity, reliability and efficiency in comparison to the air and road transport. On the other hand, every profitable aspect has its pros and cons. A huge number of industries and trades are switching over sea transport due to the cheap fares and charges generating more sea traffic on marine highways which will lead to havoc if not dealt properly. 1 Bibliography BLACK, W. R. 2003. Transportation: A Geographical Analysis. Guilford Press. ECONOMISTS, I. A. o. M. Maritime Economics & Logistics. Palgrave. H. DAVID BESS, M. T. F. 1981. U.S. Maritime Policy: History and Prospects. Praeger. J. MCCONVILLE, A. M. H. L. 2005. International Maritime Transport: Perspectives. Routledge. JAMES MCCONVILLE, G. R. 1995. Shipping Business and Maritime Economics: An Annotated International Bibliography. Mansell. KRISTIANSEN, S. 2004. Maritime Transportation: Safety Management and Risk Analysis. Butterworth-Heinemann. MARITIME TRANSPORT COMMITTEE, O. f. E. E. C.-o. M. T. C. 1991. Maritime Transport. Organisation for European Economic Co-operation. NATIONAL RESEARCH COUNCIL (U.S.). TRANSPORTATION RESEARCH BOARD, N. R. C. (. T. R. B. M. 2003. Water Transportation, Ports, and International Trade: Marine Transportation. Transportation Research Board. www.iata.org/. [online]. www.marad.dot.gov. [online]. Word Count: 1,654 Read More