Is Maritime Transportation Losing Out Its Competitive Advantage over Other Modes of Transportation Like Air and Road Transportation?

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A sophisticated and widespread transportation mode is absolutely essential for the

efficient mobility of passengers and goods. This report first investigates the various

economical, cost and environmental factors specific to maritime transportation. This

investigation includes a comparative analysis between maritime, land and air transport.

Lastly, the growing demand in marine transportation and the multitude reasons that make

shipping one of the most globalized industries in terms of freight transportation is

examined. After careful weighing of all the diverse factors, one can conclude that

maritime transportation still retains its competitive edge over other modes of transport.

Table of contents

Abstract 2

Table of contents 3

Introduction 4

Marine Economics 4

Cost of Marine Transportation 5

Environmental Factor 7

Growing Demand of Marine Transportation 7

Conclusion 9

References 10


The story of the shipping industry since the first steamships were built more than century

ago has been one of ingenuity, professionalism and fabulous profits. Maritime transport encompasses all forms of transport by sea, intermodal links and inland ports but has certain fundamental differences from other modes of transport.

The main difference between the various modes of transport is that it caters almost entirely for the freight market, and offers no significant passenger carrying ability. Nevertheless, according to recent data in 2006, seaborne trade accounted for 89.6% of the global trade in terms of volume and 70.1% in terms of value.

The marine economics, cost of marine transportation and environmental factors are explored and a comparative analysis between air, land and sea transport is made. Maritime transportation is bound with many advantages as it is ultimately most cost effective and environmentally friendly. Seaborne trade accounts for the overwhelming majority of the global trade in terms of volume and value. Thus, globally speaking, it is by far, one of the most competitive modes of transport.

Marine Economics

The main advantage of marine transportation is in its economies of scale, making it the cheapest per unit of all transport modes, which fits very well for heavy industrial activities. The strength of maritime transport does not rest on its speed but rather in its capacity and coverage. Railway and road transportation are unable to handle traffic at such geographic and volume dimensions. Containerization of cargo and specialization of ships have largely contributed to its economics of scale.

Maritime traffic remains the dominant mode in international trade. About 25,000 billion tons of freight cross the oceans annually compared with 7,000 billion tons hauled by railways and 3,000 billion tons handled by roads. This constitutes over 71% of the world freight.

Although statistics are patchy, it seems that in 1990, air freight was 31 btm, rail 3,853 btm and sea trade 12,056 btm. In terms of volume, this makes shipping roughly four times as important as rail and four hundred times as important as air freight....
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