International Trade-Technology ll

By Alfonso Llanes

December 10, 2016

Abstract

It is important to separate the different components of international trade between fixed and mobile assets. It is useful to view the fixed assets of international trade as the support functions for the mobile assets. For example seaports, airports and ground terminal for truck and rail services are some of those fixed assets. Domestic and international regulations are the administrative tools that run global commerce within the structure of treaties, unions, and agreements.

This paper will focus on the mobile equipment use for surface, air and water transportation used to transport merchandise across continents and country borders. Ocean is by volume the largest mover of commodities and finished goods around the world besides coastal trade also known as cabotage. Navigable rivers as well as intra-costal waterways serve as the feeder means to major ports that serve the continental trade across oceans also known as blue waters. Other important assets to the waterborne connections are the canals and the straits that become the limiting factors to the size of ships needing to get thru either because water depth or passage girth.

INTRODUCTION

Undeniably, enormous progress has been made on the vehicles used since traders use the Silk Road from China to the Mediterranean Sea for commerce. The Eurasian Land Bridge which is a railway through China, Kazakhstan, Mongolia and Russia is sometimes referred to as the "New Silk Road" has two distinct routes from China to Europe, the norther and the southern route railways.

The Silk Roads also provided access at ports like Guangzhou in southern China that led to maritime routes to India and Ceylon (modern-day Sri Lanka). The OECD states that the Indian Ocean Trade began with small trading settlements around 800 A.D., and declined in the 1500’s when Portugal invaded and tried to run the trade for its own profit. Malacca, the port which controlled trade and shipping from India to Indonesia and China, was captured in 1511 by th Potuguese and kept until 164. According to Thomas Anderson a lecturer at the University of New Hampshire, Melaka (modern day Malacca city) served as a major entrepot during the 15th and 16th centuries when it dominated the Indian Ocean trade. Melaka operated as an open, free market, welcoming a vast array of traders. As with so many ports in southeast Asia, Melaka survived off trade and charged a customs duty on all goods aboard a ship before allowing those merchants to trade.

In the basin of the Indian Ocean, the largest disparity between technological advancements occurred between the Chinese maritime culture and the culture of the Arabian Sea and East African Coast. Advancements in maritime technology in antiquity largely revolved around improving the speed and safety of a voyage. Most technological innovations can be separated into 3 categories: hull design, rigging design, and navigation.

IMPROVEMENTS TO MARITIME TECHNOLOGY OVER TIME

It is important to point out that maritime technologies varied throughout the Indian Ocean basin. While many technologies were similar and used in comparable settings, the distinctive details of each ship provide a larger view of the cultural identity of the ship’s original construction location. (Ray 2003)

Most vessels during this period could be categorized into one of three general categories for the type of job that the vessel would undertake: the river crafts, the coastal crafts, and the open ocean crafts as length to width ratio vary according to the function of the ship. One of the first advancements in navigational sailing was the identification of the trade winds; many inventions were used to make identifying the latitude easier for the navigator. The astrolabe evolved from the cross staff for determining star height, which in turn evolved into the qiyas (Sheriff 2010)

There was much diversity between Mediterranean Sea and Indian Ocean trade. For example, in the Mediterranean, sailors used square sails and long banks oars to maneuver among the sea's many islands. Traders of the Indian Ocean built sails the shape of triangles and did not use oars.

                    

The cargo carrying capacity of ships (at least English ships) by the 15th century was generally measured in "Tuns". The largest ship mentioned in Bristol port records from the 15th century could carry 511 tuns. The average large Bristol Merchant ship in this century was smaller, perhaps about 300 tuns. A port might have a crane for large objects or a crane could be rigged with pulleys in the spars. Those are the cross beams that hold the sails. Small objects could be loaded by stevedores or sailors. Loading and unloading of ships was accomplished with rigs of pulleys and ropes or with lightering small boats if the port water was too shallow for docking the ship.

MODERN FLEET BY SHIP TYPE 2016

Oil tankers                          Chemical tankers LNG tankers LPG tankers Other tankers

Dry bulkers General cargo Other dry cargo carriers Container ships Roll on-roll off

CONTAINER TRADE

 

 

  Source: IHS Fairplay

Member states as of October 2016 before Brexit

In this paper the description effort would be centered on containers and how this unit of trade has effected enormous change to the industry.

Malcom Purcell McLean an American businessman was a transport entrepreneur who developed the modern intermodal shipping container, which revolutionized transport and international trade in the second half of the twentieth century. By handling cargo as a box unit that could be transferred from a ship to a flatbed truck or rail service modernized the industry to unprecedented levels. This lead to a significant savings in the cost of freight transportation by reducing repeated handling of individual pieces of cargo. Also, it improved reliability, reduced cargo theft, and cut inventory costs by shortening transit time between origin and destination as well as generating a new type of service named intermodal by using different modes of transport with the same standard boxed unit of cargo.

Other Advantages of using containers

  

                      World Fleet Operators of Cellular Ships

                                          

     CONCLUSION

The most productive flexibility of ocean containers is the intermodal transfer from one mode of transport to another without having to handle the cargo as individual packages but instead be handled as a unit.

Another important issue to keep in mind is that cellular ships assign vessel container capacity by the number of 20 foot containers or equivalent units such as that a 40 foot container is 2 units of 20. Each container has unique identifiers by means of a serial number so that loading position can be identified. Cargo is secured by locked doors and radio frequency identification (RFID) technology. This technology allows not only tracking of containers from origin to destination but when doors are open or close to prevent theft of merchandise in the container or load cargo not listed in the cargo manifest.

According to The Economist the shipping container altered the economics of shipping and with that the flow of world trade. Without the container, there would be no globalization.

The Economist continues: Consider the economics. Loading loose cargo, a back-breaking, laborious business, onto a medium-sized ship cost $5.83 a ton in 1956. McLean (inventor of the container) calculated that loading the Ideal-X cost less than $0.16 a ton. All of a sudden, the cost of shipping products to another destination was no longer prohibitively expensive.

On 23 April 1966, ten years after the first converted container ship sailed, Sea-Land’s Fairland sailed from Port Elizabeth in the USA to Rotterdam in the Netherlands with 236 containers becoming the first international voyage of a container ship.

During the build-up to the Vietnam War, the US military was faced with the logistical problem of getting supplies to troops, so, it turned to container shipping as the most efficient option.

 The efficiency of the military build-up did not go unnoticed by the industry and rom this point on it began to grow to the point where it would become the backbone of global trade.

In the period of 1968 18 container vessels were built, ten of them with a capacity of 1,000 TEUs which was large for the time. In 1969, 25 ships were built and the size of the largest ships increased to approaching 2,000 TEU. In 1972, the first container ships with a capacity of more than 3,000 TEU were completed by the Howaldtwerke Shipyard in Germany.

 An entire new industry had emerged, demanding unprecedented investment in vessels, containers, terminals, offices and information technology to manage the complex logistics that were to come.

Throughout the 1970's and 1980's the container shipping industry at exponential rates connecting Japan and the US west coast, and Europe and the US east coast. The Europe–Asia route began to be serviced by conference agreements (a group of carriers sharing space on ships). By the end of the decade, shipping between Europe, South East and Eastern Asia, South Africa, Australia/New Zealand, North America and South America were all largely containerized on scheduled services. In 1973, US, European and Asian containership operators were carrying 4 million TEUs all over the world. By 1983, 12 million TEUs were shipped which also arrived in the Middle East, the Indian sub-Continent, and East and West Africa beginning the trend to globalization of commerce.

According to Drewry Maritime Research the global container fleet is set to grow another 1.6 million TEU in 2013. This will make the global container fleet about 34.5 million TEU. Although the container fleet is still growing the rate of growth is slowing down to an estimated 38 million TEU of containers globally in 2016.

APPENDIX

Cellular Ship in Transit

  Intermodal Ocean Container                              Trucking Ocean Container

                    

                             

               Intermodal Ocean Roll-On Roll-Off Trailer

                        Intermodal Ocean Container Unit Train

Evolution of Container Ships

                                                 Container Port

        Ocean containers come in different sizes for difficult to stow cargoes.

  

                                    Shipping Documentation for Containers

Transport Documentation	Methods of Payment	Insurance
Commercial Invoice	Cash in Advance	Cargo Insurance
Inspection Certificates	Commercial Letters of Credit	Coverage
Weight Certification	Standby Letter of Credit	Insurance Certificate
Packing List	Documentary Collection
Shipper’s Letter of Instruction	Open Account
Dock Receipt	Mixed Methods
Certificate of Origin	Currency of Payment
Consular Invoice
Bill of Lading
Air Waybill

SHIPPING FORMS

 

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