Importance of Sea Transport in International Trade

The significance of the seafaring world is stronger than ever, as 90 percent of the internationally traded goods are carried over the waves. Despite faster communication modes, maritime transport continues to be the backbone of contemporary global commerce. The fact global seaborne trade is expanding at 4 percent is a testament to the scope and relevance of maritime transport.

The ‘Voyages of Discovery’ between the 15th and 17th centuries ushered in a kind of embryonic globalization, where cultures and economies began interacting, and their essence lingers even today. In the 21st century, maritime transport now stands at the confluence of economic opportunities, international relations, global trade, tourism, and more. With the introduction of more efficient and risk-free ships, cheaper commute costs, and the ability to facilitate bulk movement of goods, the importance of sea transport in international commerce is stronger than ever.

In this article, we will comprehensively gauge the role of sea transport in international trade, from history to the decades of the 2020s, and dovetail into the many dimensions of the topic.

History of Sea Transport in International Trade

The history of maritime transport can be traced back to 5000 years when the first trade routes were formed along India and Pakistan across the Arabian Sea. During the same time, Romans were developing a fleet that could traverse the Mediterranean Sea in a month. Such carriers moved low-value goods like grain and timber, as transporting them by sea was cheaper than land. Gradually, the Romans expanded their sea route to travel over the Indian Ocean.

The Arab Empire established its first transcontinental commercial routes between the 7th and 13th century. First, they designed and constructed advanced vessels called ‘qaribs,’ which streamlined the time and energy it took to transport goods over long distances. Then, during the Age of Discovery from the 15th to 19th century, advances in nautical faculty and shipbuilding enabled Europeans to voyage across the Atlantic Ocean.

Finally, in the 19th century, cruise ships were developed to carry people across oceans. In the 20th century, the face of maritime transport transformed with the formation of container ships. They set the stage for the modern-day shipping industry. Now, cruise ships and ocean liners can travel at speeds up to 45 mph. In addition, currently, 50,000 merchant ships are trading internationally, which are responsible for 80 percent of the global trade by volume and 70 percent of global trade by value.

Advantages of Sea Transport

• Cost Effectiveness – Transit by sea is the most cost-effective mode of moving goods across continents. Maritime transport usually produces lower emissions, even on low volumes. In addition, the volume of goods that can move on one trip is gargantuan. Colossal cargo can be transported in a handful of trips, thus, shipping by sea is more economical and environmentally sound than other counterparts.

• Capacity – Shipping by sea means bulk movement of freight. Maritime transport means that every crevice of the shipping container you purchase is optimally and meticulously utilized. Furthermore, vessels are built to carry huge amounts of goods and raw materials compared to the capacity of airplanes or trucks. Lastly, shipping also allows the movement of liquids, gas, and dangerous cargo.

• Efficiency – Last but not least, sea transport is incredibly efficient for heavy items, as their transit becomes exorbitantly pricey. Moreover, shipping containers can be easily transmitted from the merchant’s vessel to a truck or rail, thereby facilitating easy inland travel. In addition, with guaranteed safety and security of freight, maritime transport becomes the most methodical means of cargo transportation.

Current State of Sea Transport in International Trade

In the contemporary globalized economy, the relevance of sea transport in international trade is bigger than ever. Thus, there has been an unprecedented rise in the construction of ‘mega vessels’ with the capacity to simultaneously carry colossal amounts of goods into thousands of shipping containers. Around 90 percent of world trade depends on maritime transport; it is impossible to imagine a modern world without seafaring conveyance.

Without shipping, intercontinental trade, the bulk of raw materials, and the import/export of affordable goods and manufactured goods would be impossible. Furthermore, sea trade continues to expand and bring tangible benefits to the common consumer world through competitive freight costs. Lastly, owing to the increased efficiency of shipping as a transportation mode coupled with economic liberalization, the industry’s further growth prospects are strong.

Some of the trends of the contemporary sea transportation system in international trade are –

• Technological developments include the introduction of advanced data capturing systems, increased use of eCommerce, and the launch of an advanced supply chain management system known as Agistix.

• Research on alternative fuels is galvanizing, and the increasing need to curb overweight containers is being deliberated upon profusely.

• To safeguard the sea transport industry’s reputation, stricter supervision of operations and harsher sanctions has been implemented.

• Container ships are modified to align their structure with the features of existing shipping lanes and the capabilities of ports.

Top 10 Sea Trading Busiest Countries

Although the entire world has wholeheartedly embraced maritime transport as the quintessential means of moving bulk goods, some nations stand out in terms of their numbers and magnitude. Some of the busiest sea trading countries include –

1. The United States of America
2. China
3. Germany
4. Japan
5. Netherlands
6. Korea
7. Italy
8. France
9. Belgium
10. Mexico

Top Busiest Shipping Routes in World Used for Global Trade

Although there are several sea trading routes on earth, some are known for being incredibly popular. The five busiest sea routes in the world for global trade are –

• The English Channel between the UK and France
• The Strait of Malacca near Indonesia, Malaysia, and Singapore
• The Panama Canal in the USA
• The Suez Canal in Egypt
• The Danish Straits (Denmark, Germany, and Sweden)

Conclusion

In a nutshell, the relevance and scope of maritime transport in international trade are magnanimous. Sea transportation is the intrinsic ingredient that flavors the 21st century in a genuinely globalized and liberalized hue. From the coffee we drink to the socks we wear, sea transportation enables us to experience a truly cosmopolitan living without even stepping away from our house. Thus, sea transportation interconnects humanity in unfathomable ways.

Summary

Numbers are enough to iterate the importance of sea transport in international trade. With an immense contribution to international trade (90 percent), sea transport ensures that humanity remains connected through exports and imports. In addition, a maritime voyage is the best way to move bulk goods from one location to another. Thus, enterprises of all scales and types must leverage the many merits of sea transport.

Call to Action

Being a truly global business leader begins with dabbling into maritime transport. By ensuring that your goods are transported safely, efficiently, and at a competitive rate from one corner of the globe to another, you can revolutionize your enterprise’s caliber and become a truly universalized presence within your business niche.

At VSTrans, we help connect 195 countries via the sea and ocean ways. With our comprehensive ocean freight services, you can rest assured that your goods are safe as we meticulously manage the A to Z of seafaring cargo transfers. Browse through our personalized features, and step into a world of seafaring possibilities.