International maritime transport and its service to world trade

By David Restrepo G.

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To understand the economic fundamentals of international maritime transport and its service to world trade, a general knowledge of the market for primary products and industrial production and consumption centers at the global level is required. Additionally, it is necessary to consider that international maritime transport has a derived demand, that is, it does not generate its demand since it is produced thanks to the international trade of products and merchandise that need to be transported from point “A” to point B (Shou, M. 2017).

In this article, there will be a general description of how international maritime transport provides its services to world trade, showing the demand for transport by type of product and type of means of transport. To achieve this objective, we used the model described by Stopford (2009, p.55) International transport system and its cargo requirements (Figure 1), where we can see on the left side, the primary products column organized in four sectors, energy, mining, agricultural and forestry. These products are mostly transported by sea in ships of bulk transport (dry/liquid), using large quantities to achieve economies of scale and with a partial size distribution (Parcel Size Distribution PSD) to reduce unit transport costs. Subsequently, the primary products arrive at the processing plants or manufacturing industries described in the central column, such as refineries, chemical plants, steel plants and mechanical metal, vehicle factories, household appliances, food processing plants, textiles, wood, and paper. Finally, demand is again created to transport the finished or semi-finished products in vessels with more specific characteristics such as LPG vessels, tankers for the transport of naphtha, gasoline or diesel, or container ships, general cargo vessels, Ro-Ro or twin deckers to reach retailers, markets, and end users.

International maritime transport and its service to world trade
Source: International Maritime Transport and its service to world trade and its transport requirements. From (Stopford, M. 2009, p.55).

In this way, a fundamental contribution to International Maritime Transport and its service to world trade is observed to mobilize products around the world, integrating the supply chain in the different production stages, shaping the development of naval engineering to the requirements of the demand for the products that are transported by sea.

In the next publication we will analyze the underlying economic factors of the demand for maritime transport, where almost always the commercial exchange of products is generated by the principle of surplus in one point and scarcity in the other, however, given the diversity of cargo, routes , ports, and available operators, make the analysis of the demand in the different commercial flows more complex.

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David A. Restrepo G.

References:

Shou, M. (2017). Maritime Economics. Conference presented during the course WMU 142 Maritime Economics at the World Maritime University, Malmö.

Stopford, M (2009) Maritime Economics – Chapter 2 The organization of the shipping market (3 ed., Pp. 53-65). London Routledge.

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