Shipping Industry Overview
Throughout the last century, the shipping industry has seen a general trend of increases in total trade volume. Increasing industrialization and the liberalization of national economies have fuelled free trade and a growing demand for consumer products. Advances in technology have also made shipping an increasingly efficient and swift method of transportation. Over the last four decades, total seaborne trade estimates have quadrupled, from just over 8 thousand billion tonne-miles in 1968 to over 32 thousand billion tonne-miles in 2008. As with all industrial sectors, however, shipping can be susceptible to economic downturns. Indeed, following several years of incredibly buoyant shipping markets, for many trades the best in living memory, much of the international shipping industry has fallen prey to the worldwide economic downturn. Shipping is inherently the servant of the economy, so the contraction in trade, following the beginning of the ‘credit crunch’ in late 2008, has translated into a dramatic and abrupt reduction in demand for shipping. Notwithstanding the current gloom and doom, the longer term outlook for the industry remains very good. The world’s population continues to expand, and emerging economies will continue to increase their requirements for the goods and raw materials that shipping transports so safely and efficiently.
Value of volume of world trade by sea
It is difficult to quantify the value of the volume of world seaborne trade in monetary terms, as figures for trade estimates are traditionally in terms of tonnes or tonne-miles, and are therefore not comparable with monetary-based statistics for the value of the world economy. However, the United Nations Conference on Trade and Development (UNCTAD) estimates that the operation of merchant ships contributes about US$380 billion in freight rates within the global economy, equivalent to about 5% of total world trade. Shipping trade estimates are often calculated in tonne-miles, as a way of measuring the volume of trade (or “transportation work “, as it is sometimes referred). In 2008, for example, it is estimated that the industry transported over 7.7 thousand million tonnes of cargo, equivalent to a total volume of world trade by the sea of over 32 thousand billion tonne-miles.
Safety and Regulation
Shipping is the safest and most environmentally benign form of commercial transport. Perhaps uniquely amongst industries involving physical risk, commitment to safety has long pervaded virtually all deep-sea shipping operations. Shipping was amongst the very first industries to adopt widely implemented international safety standards.
Because of its inherently international nature, the safety of shipping is regulated by various United Nations agencies, in particular, the International Maritime Organization (IMO) which has developed a comprehensive framework of global maritime safety regulations.
Shipping is the least environmentally damaging form of commercial transport and, compared with land-based industry, is a comparatively minor contributor to marine pollution from human activities.
There has been a substantial reduction in marine pollution over the last 15 years, especially with regard to the amount of oil spilled into the sea, despite a massive increase in world seaborne trade.
Numbers and nationality of world’s seafarers:
The worldwide population of seafarers serving on internationally trading merchant ships is estimated to be in the order of 466,000 officers and 721,000 ratings.
The OECD countries (North America, Western Europe, Japan etc.) remain an important source for officers, but growing numbers of officers are now recruited from the Far East and Eastern Europe. The majority of the shipping industry’s ratings are recruited from developing countries, especially the Far East and South East Asia.
The Philippines and India are very significant maritime seafarers supply nations, with many seafarers from these countries enjoying employment opportunities on foreign flag ships operated by international shipping companies. China has also seen a large increase in the number of seafarers, but at the moment most of these work on the Chinese fleet, meeting domestic requirements.
Eastern Europe has recently become an increasingly large supplier of seafarers with high numbers from countries including the Ukraine, Croatia, and Latvia. Other major seafarer’s supply countries include Greece, Japan, Russia and the United Kingdom.