Despite carrying the major bulk of world trade in cargo and facilitating substantial volume of trade in services, the maritime industry and the allied global shipping industry, remains one industry in which the general public seems to lack proper understanding. This is in sharp contrast to the substantial know-how the same public display on issues relating to the Airline or Road Transport logistics businesses. This is obtainable despite the fact that these other industries carry far less share of the global trade volume. The answer might have something to do with the access/proximity people have to the hubs that services each of these businesses under discussion.

While the core of the Airline business is centered around passenger/people movement, the major focus of the shipping industry is massive cargo haulage with a minor niche in the passenger/cruise traffic. From this analysis, it is observable that the airline industry moves more people than cargo in terms of number to volume ratio. The implication of this is that the everyday person tends to have direct dealings with all the process chain in the airline business, thus giving the public fair understanding of how the business works. This ranges from ticket booking and payment, luggage check-in, flight scheduling and re-scheduling, seat reservation, connecting flight planning etc.



On the other hand (Maritime Industry), things are a little bit different. At the heart of the shipping business lies the largest cargo logistics system in the world- ocean freight transportation (See World Trade). Right at the center of this lies an highly dynamic balance in the global supply chain of raw materials and manufactured goods. One major example is the demand and supply of fuel for the energy market. Most of the world’s crude oil supplies originate from the Middle East while the destination consumption markets lies in North America, Europe and the Far East.

For manufactured goods, the bulk of raw materials for the manufactured items usually originate from countries that are far from where the actual conversion to finished products are done. One such example is the Automobiles that are manufactured in Japan. While Japan has no deposit of iron ore, it is one of the leading automobile making nations in the world. Huge volumes of iron ore and steel are imported by Japan to be converted to Cars, Buses, Trucks and Heavy Machinery every year (See Global Sea Trade Routes).

Global Shipping Facts

Over 90% of world trade in goods by volume and 40% of global trade in goods by value are carried across the world’s oceans (See Sea Trade By Cargo Types).

The logistics is carried out by about 50,000 merchant ships.

Maritime transport is the cheapest means of transport.

Containerization has drastically reduce the unit cost of commodities (See Intermodal Shipping Containers).

Modular shipping and economy of scale provided by sea trade is the bedrock of world trade.

Globalization is made possible by modular method of sea transportation.



It is obvious from the above that the shipping industry is the backbone of global trade. If the health of World Trade is good, the shipping industry witnesses period of boom while the opposite brings unhealthy experience to the industry.

Ad