Maritime logistics in a globalised world | By Waqas Jan


Maritime logistics in a globalised world

OCEANS serve as the only connector or all the lands on earth, this connection was used throughout the ages and since the age of sail, the maritime trade activity established itself as a form of commerce.

The subsequent centuries and throughout the colonial era in which the baton of global economic leadership regularly oscillated between various European powers.

The trading activity via the ocean saw a rapid rise in all those centuries. Since the beginning of World War II, the maritime trade was at an all-time high and much regulated through various conventions.

The dependence of Western powers on maritime trade made it the prime target for the Nazi planners.

In the absence of any serious threat since the end of World War II, the maritime trade saw an unprecedented rise in volume, and in all those years and decades the maritime logistics see more streamlining, as the Box ships made their debut in the shipping industry.

The other important factor which led to a boom in maritime logistics is the creation of the international maritime organization and other international maritime trade and logistics instruments to integrate the working of the shipping industry.

Modern maritime logistics is a relatively new field, which is much organized and form the backbone of the global economy, as over 80 percent of the global trade is seaborne.

The evolution of modern maritime trade companies such Maersk, CMA-CGM, COSCO shipping, etc. , shows that the domain is now fully evolved and now acts as a steering of the global economy.

Nearly every country in the world having a coastline have a ministry of maritime trade, shipping, or maritime affairs, that tends to oversee and regulate the maritime trade of the country.

Maritime logistics is one specific component of the global logistics and supply chain industry.

Modern maritime logistics is divided into three main components based on the delivery of goods or commodities, in which the container ships form the bulk of the international fleet, followed by oil and LNG tankers and then bulk carriers mainly used to carry out trade of edible items, such as grains, etc.

The LNG tankers are new induction in the global fleet. The cargo ships are heavy container ships which are the force behind massive factory production as these ships are tasked to carry out the transportation of these cargoes across the globe.

While the oil and LNG tankers are feeding the global hunger for fuel and thus contributing to the smooth functioning of the top economies of the world.

The seaborne trade is now a highly integrated and regulated space, as it draws its strength from various international treaties, frameworks and global norms that are followed internationally by all the countries.

Incoterms, for example, is considered as the language of maritime trade, while the contracts in the maritime logistics make this a transparent field, in which every contract between the ship-owner and buyer wanting to transport it via that ship enters a form of agreement, the most common type of agreement in this realm is the Bill of Lading, this agreement or contract allow the consignee to challenge the ship-owner if his goods are lost or damaged during the voyage.

Thus the maritime logistics is not just mere transportation of goods from one country to the other, but it forms an organizational, procedural and planning component of the logistics via shipping, and all these activities are under the cover of law, so it will not be wrong to say that maritime law and its application, is enabled by the maritime logistics.

The globalization movement which started in the early 1980s and saw the fall of trade barriers across the globe, almost tripled the volume of global trade, the trade activity was further enhanced after the creation of the EU single market, the creation of NAFTA, and the creation of other multilateral and bilateral free trade agreements between countries.

This kind of complex trade dynamics created huge markets for goods and commodities; it was a much-needed domain through which the world sees a holistic and one window solution to carry out trade via ocean.

From the production to sale and purchase and then final delivery of the goods or commodity, every step is regulated through maritime cargo logistics.

The developing world and agricultural countries saw a daunting challenge in transporting their goods to the developed world, for this the maritime logistics provided timely solutions, when companies like Maersk stepped in and created a cold supply chain for the transportation of perishable items, and also created a much-needed mechanism in which the production lines in the developing world see regular transportation of their goods, and thus never see a logjam, in the form of more production but less transportation.

The intermodal freight is yet another solution to the over-production woes, in which delivery is made fast via special kinds of double-stack trains, which can transport a large number of containers directly loaded into the trains without opening the containers.

The Western shipping companies are ruling the global maritime logistics scene, transporting more than half of the goods and commodities across the globe.

A traditional framework or mechanism of the maritime cargo logistics is the agreement between ship-owner and buyer or seller, then warehouse labeling of the cargo, the port arrival, and then loading into ships, after it reaches its destination the cargo will then be uploaded on trucks, or trains to deliver it to the warehouse at the receiving end, and after the making the final delivery to its intended destination.

All these steps followed in the maritime logistics are known and implemented globally, as the ports in the entire world speak one common language of international trade.

Maritime cargo logistics is not just transportation of goods from one point to another, which is a transport component, but it is about purchasing, order & inventory management and ever-evolving freight management frameworks.

Maritime cargo logistics is evolved field, which is a different domain from maritime transportation; maritime logistics mainly deal with an array of tasks, including documentation, cargo offloading, and loading, that is cargo management, charter party agreements, inventory, storage, warehousing, packing, the transportation of cargo in the intermodal system, cold storage, cold supply chain, and other revolutionary solutions to the new challenges and global problems, such as pandemic in which the biggest rollout of vaccine to be carried out by ships, in specially-built containers across the globe, these new protocols and transportation norms, all fall under the broader field of maritime logistics.

Modern maritime logistics depends heavily on the global production, any international or regional crisis, such as the 2008 financial crisis, and the ongoing pandemic crisis had grave implications on the maritime logistics business around the globe.

The oil market fluctuations in the recent past, the temporary LNG glut due to new and long term gas contracts for the pipeline based delivery of natural gas, the pandemic hit supply chains, lower TEUs, container shortage, regional conflicts, chokepoints geopolitics as Hormuz Strait, Bab el Mandeb and Malacca Strait IMO-2020 fuel regulations, all these has direct effect on the maritime logistics.

—The writer is Educator at KP Elementary and Secondary Education Department.