The Term Trade - Assignment Example

The Term Trade Trade: The term trade is meant by buying and selling of goods. It is the exchange of goods between the people involved in the business. The people involved range from the manufacturers to the transporters, sellers and finally the consumers of the manufactured goods. Therefore, trade is one of the most important business activities, especially in today’s world. Types of trade: Trading is done in a number of ways. There are various forms of trading which are classified under two main groups, namely: Internal trade or Home trade External trade or Foreign trade Internal trade or Home trade: Internal trade occurs when the buying and selling activity is within a country. The manufacturers of a particular product sell a large amount of the product to the distributors in a reasonable price. The distributors then sell it to the customers with some profit margin for themselves as well. The customer or buyers are the final consumers of any product. External trade or foreign trade: External trade, also known as foreign trade, occurs outside the countries i.e., between all the countries of the world. The buying and selling of products on the international basis is called importing and exporting. External trading is done in numerous ways including trading by land, air or by water which is also known as maritime trading. Maritime trade: Maritime trade is a kind of trade that is done when goods are transported from one country to another through shipping. History of Maritime trade: The history of shipping dates back to the Phoenician merchants who used to transport goods across the Mediterranean. Apart from them the venetians also had a huge number of merchant ships dating from 1300 AD to 1500 AD. The Dutch also had a huge shipping convoy from 1600 AD to 1650 AD; the merchants dominated the shipping business till the nineteenth century. The first common freight carrier service was launched by the name of James Monroe in 1818. However the launch of the Suez Canal brought a boom in the shipping industry because it improved trade between Europe and Asia, the first nuclear powered cargo and passenger ship called the ‘savannah’ was launched in the 1960, however the container shipping sector started to expand during the 1970’s and 80’s and Hong Kong became the largest container port in 1989. The sea was always used as a way to move from one place to another and later it became a method to transport cargo to the world as mentioned above. As the industry started to flourish people started to spend their income on an adventurous endeavor such as exploring the sea with the help of passenger ships. The first shipping company to offer a passenger ship service was the Black Ball in the 1818 which started operating from New York. After this, trade got mixed with leisure and more and more ships as luxurious as the Titanic came into demand because of their demand, however Titanic is a bad example to state but one should know that cases such as the Titanic are fewer and generally most of the passenger ship traveling is successful. During the 80s the cruise industry revived again after which cruise liners with a capacity of 2000 people were launched and these were specifically made for the purpose of vacations to major tourist attractions of the world. The new ships were nothing like their past counterparts and were somewhat like a floating resort with casinos, spas, salons, champagne and caviar bars even night clubs. (Seafarers, 2012) However talking about cargo ships this idea was nothing innovative and was always present, boxes were used to transport goods in England during 1792. However during the Second World War the US government used small containers and later they proved to be much more efficient with the unloading and distribution. The cargo ships of today were brought into picture by Malcolm P. Mclean who belonged to North Carolina USA and bought truck trailers along with their cargo because he thought that it would prove to be much more efficient. His idea led to a revolution for the next 50 years to come because containers are much easier to move between ships and trains and cause less interruption during the journey. The gradual revolution in the shipping industry has made life much easier because the transportation of these goods today is much easier than it was in the past; many countries are not as oil rich as the Arab nations therefore oil from that region can easily be transported to other nations today. (Economy Watch, 2012) Founding of the Singapore port: Singapore port was found when Singapore itself was found. Singapore was found by Sir Stamford Raffles in the beginning of the 19th century. At that time, there were not many ports. British port was one of the few ports of the world. Sir Stamford Raffles realized that there was a need of another port for the transportation of goods. Another port was required so that Britain may expand its trading and trade in some other areas of the world as well. Therefore, Sir Stamford Raffles started searching for a place which would be good for trading and where British goods would be valued and traded. Hence, after searching for a long time, Sir Stamford Raffles, along with Major William Farquhar, found a place that was consiered to be one of the best places for trading. That place was Singapore and this is how Singapore port came into being. Reasons for choosing Singapore for trading: There were innumerable reasons due to which Singapore was chosen as a trading port. Some of the major reasons are discussed below: The first most important reason was the location of Singapore. Location is one of the most important factors in any business and the location of Singapore is extremely ideal for maritime trading. Singapore has a wonderful trading route that is between China and India. Therefore, it was ideal to trade in Singapore. Apart from the location, Singapore had a lot of deep water that was good for enormous ships. Singapore was rich in a huge quantity of fresh drinking water. Therefore, this was another reason that Sir Stamford Raffles opted for Singapore to be the trading port, among all other areas of the world. Singapore port- At present: Today the world’s busiest port is the Singapore Port which transships one fifth of the worlds shipping containers, half of the annual supply of crude oil and it is also the world’s busiest transshipment port. Till 2005 it was also the busiest port as it handled total cargo tonnage however this title was later taken by the Port of Shanghai. As Singapore lacks natural resources along with land resources therefore the port of Singapore is a necessity for Singapore. The port imports all sorts of natural resources, it later exports them after refining and reshaping them, an example for this can be the oil refining, Singapore imports oil and then later refines them to export further on. The Singapore port became more prominent after the maritime trade began to increase during the 19th century. During the 1840’s Singapore became a major coaling station for the steam shipping networks, moving on to the late 19th century it became a staple port to service the geographical hinterland of the Malay Peninsula. Later on the basic transportation methods were improved such as the roads and the railways so that the primary materials such as crude oil, rubber and products like tin could be transported from the Malay Peninsula to Singapore and later on after being processed it can further be shipped to Britain and other markets. This proved to be the major role of Singapore during the colonial period. (Xinahuanet, 2006) Singapore was a British colony however during 1963 Singapore no longer belonged to Britain and was merged into Malaysia, later after it received complete independence in 1965 it had to sustain because it was not rich in natural resources and land resources therefore it had only one way out that is to import goods from other nations, Singapore began to import goods into the country and after refining them exported it further making its economy an export-oriented economy. As mentioned above today Singapore’s port is the busiest port of the world and its container facilities include container berths, quay length, has an area of 436 hectares, quay cranes and has a designed capacity of 24,700 kTEU. (Braddell, Ronald 1980) Economic growth of Singapore through Shipping: To support its economy today Singapore has become the world’s busiest port handling 1.15 billion gross tons , it still retains the number one position since 2005 not only this but is also the largest bunkering hub during 2005 selling 25 million ton that year. It has not only helped its own economy but also helped Southeast Asia, as due to the rise in regional traffic, the east Asia-Europe route via Singapore helped the port to emerge by the end of the year, and this means Singapore has overall helped play a vital role in the emerging economy. (Cher, Derek 2005) The shipping industry was much needed for the state of Singapore because without it the area would be completely different from what it is today. It was smart of Singapore to choose the route to improve its economy because there wasn’t any other way Singapore could have helped itself. References Economy Watch. 2010. Shipping Industry, Shipping Sector. [ONLINE] Available at:http://www.economywatch.com/world-industries/shipping-industry.html. [Accessed 06 February 12]. SHIPPING INDUSTRY . 2011. Shipping Industry. [ONLINE] Available at:http://www.seafarers.edu.in/index.php?option=com_content&view=article&id=9&Itemid=1. [Accessed 06 February 12] China view. 2006. Singapore remains world's busiest port. [ONLINE] Available at:http://news.xinhuanet.com/english/2006-01/12/content_4045562.htm. [Accessed 06 February 12]. Trade. 2008. What is trade?. [ONLINE] Available at: http://kalyan-city.blogspot.com/2011/03/what-is-trade-meaning-and-nature.html. [Accessed 06 February 12]. Read More