Maritime Transportation Industry - Essay Example

However, the maritime transportation industry could be considered as having reached its peak and is now falling out of popularity due to the many problems and challenges the industry is now facing. These problems are listed and discussed in the following: Unlike trucks and planes, ships operate in a much more extreme environment. The ship, exposed to highly-corrosive and oxidative seawater, develops rust easily and can have its parts heavily damaged in just one delivery especially if it encountered storms during the trip.

Compounding the problem is the incrustation of ship hulls, particularly the underside, by bacteria, algae and other sea organisms. Incrustations destroy paint making it easier for the metal of the ship to corrode. A heavy layer of organisms increases drag and leads to higher fuel costs. It can also cause accidents, impaired navigational ability and even the loss of the vessel. These are grave problems unique only to the maritime shipping industry which makes it more dangerous than other transportation method.

(GAO, 2002) One big problem with the maritime transportation industry is that it is very sensitive to instabilities in the industry. In the 1980s, the changing pattern of international trade combined with rapid technological developments resulted in many structural and technological changes in the world shipping industry (Sussman, 2002). The fast rise and fall of other industries that were sources of job orders of the maritime industry meant that there could be a rapid decline or surge in seaborne trade.

A decline could wreak havoc in the maritime transport industry because the maritime transport fleet is unable to respond quickly as existing tonnage cannot be easily redeployed and contractual obligations for the construction or order of additional ships cannot be easily removed without substantial financial penalties. This characteristic of maritime transport could lead to excess tonnage situations such as what happened in the 1970s when seaborne trade started to diminish, especially in the petroleum trades.

The result was that there was a severe imbalance between supply and demand which peaked in 1983 when surplus tonnage amounted to 28.5% of the world fleet. This means that when there is a decline in maritime trade, the maritime transport would easily suffer from huge losses incurred in contract obligations and fall out of the industry which creates a void in suppliers of the service. (Department of Transportation, 2007; Pedraja, 1994) 2.3 Restrictive Shipping PracticesAccording to Donn (2006), unlike air and land transport of goods,