1. economy. [3] 2. Globalization and International Trade

1.    INTRODUCTION

World
trade and maritime transport are fundamental to sustaining economic growth and
spreading prosperity throughout the world, thereby fulfilling a critical social
as well as an economic function. The marine
transportation system is a network of specialized vessels, the ports they
visit, and transportation infrastructure from factories to terminals to distribution
centers to markets. It is a necessary complement to and occasional substitute
for other modes of freight transportation.  For many commodities and trade routes, there
is no direct substitute for waterborne commerce.1 

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International Monetary Fund defines globalization as the
process through which an increasingly free flow of ideas, people, goods,
services, and capital leads to the integration of economies and societies.
Major factors in the spread of globalization have been increased trade
liberalization and advances in communication technology. (Source: www.imf.org, Glossary of financial terms, November 2006)

 International maritime transport costs tend to be on average
between two to three times as high as custom duties of importing countries. It
is the cheapest way of transporting large amounts of goods compared to other
transport methods. Furthermore, maritime transport will be indispensable
in a sustainable future global economy as it is the most environmentally sound
mode of mass transport, both in terms of energy efficiency and the prevention
of pollution.2

Demographic changes and shifts in valuing different
commodities, services and consumption methods as a result of dematerialization
of the social culture. The demand for transportation services will generate new
environmental threats that must be removed by ship owners and international
organizations along the lines set by the sustainable, “Blue” economy. 3
           

 

 

 

2.
Globalization and International Trade

2.1
The effects of Globalization

As the global economy struggles to regain its momentum
following the recession, it’s clear that shipping   will be instrumental in making it happen.

According
to the Ashkenas  Jick & kern 1995 the
main causes for globalization are referred to as the

·       
Survival
in a competitive world through cost reductions, profit margins, economies of
scale and local preferences

·       
Desire
to disperse or expense for various capital intensive investment Desire or need
to generate profit, since the first companies entering a market will get the
portion the lion, while the rest are the rest.

·       
Expanding
to new territories and regions.  The
benefit deriving from the successful abolition and is a generating cause and
other benefits. The pursuit of innovation and the adoption of new technology
that removes geographical boundaries and time barriers. Comparing a company’s
work with the others, showing the need to imitate or to adopt the practices of
the other company. The decision to follow a customer in another country.4

 

3. IMPACTS OF GLOBALIZATION IN SHIPPING INDUSTRY

  With increased ease
of travel and shipping and decreased trade barriers, consumers and businesses
have more access to goods and services, says David Kilgour, a former member of
the Canadian Parliament. This helps businesses obtain things they might not
have been able to get before and allows them to make things better or cheaper.
Small-business owners can take advantage of globalization by advertising and
selling their items to more markets via the Internet and ship them using an
exporter.

Positive Impact

·       
More
access to goods and services

·       
Evolution of new business 

·       
Labors are needed
to preserve the companies running

·       
Plenty of job opportunities offered

·       
Reduces unemployment Increased Global Production

·       
Rise in demands of goods and products from customers all over
the world

·       
Manufacturers and suppliers need to deliver their goods to
the customers

·       
There will be an increase in demand for shipping services
especially on seasonal occasions

 

 

Negative Impact

·       
Environmental Impact

·       
Air Pollution – Emission of Carbon Dioxide and Sulphur Oxide

·       
Water Pollution – Shipping accidents causes oil spill

·       
Disposal of garbage into sea water

·       
Sound Pollution – Loud noises produced by engines at 
the harbor

·       
Uneven Benefit to Local Investors

·       
Investments needed for ports and businesses need to expand to
accommodate bigger ships

·       
Foreign investors can offer bigger investments compared to
local investors
Therefore, local investors do not get as much
share as foreign investor 

3.1
The environmental impacts of maritime transport activities.

The
environmental impact of shipping includes greenhouse gas emissions and oil
pollution. The International Maritime Organization (IMO) estimates that Carbon
dioxide emissions from shipping were equal to 2.2% of the global human-made
emissions in 2012 and expects them to rise 50 to 250 percent by 2050 if no
action is taken.5

Each
maritime transportation activity occurring in ports, at sea or during ship
construction/maintenance/dismantling, present’s different environmental
impacts, on air, water, ecosystem and other. Together with these impacts also
those deriving from accidental events or illegal actions have to be considered
when evaluating the overall contribute of the maritime transportation sector to
environmental quality.6

MAIN
EMISSIONS FROM SHIPS:

1.
Petroleum (crude oil, mazut)

2.
Wastes (household-functional)

3.
Gaseous emissions

4.
Waste

5.
Chemicals7   

Petroleum
products: 8


Used mineral oils

 • Fuel residues

 • Residues


Unclean ballast


Tank washes

The
sources of the above are: natural (natural outflows), marine (accidental and
deliberate) and land (discharges, rain water, river discharges).

Trash:


Households: food waste, packaging materials, bottles, paper

 • Functionally: maintenance waste, cargo, ash,
pallets, straps, fishing nets, animal feces, investment materials. The sources
of the above are either land or sea. The terrestrial are mainly due transport
of waste (through rivers, from seaside, industrial and commercial) tourist
infrastructures). Marine vessels of various types (commercial, fishing, war
etc.)

 

 Air Emissions:


Exhaust emissions (nitrogen, oxygen, water vapor, carbon dioxide, carbon
monoxide carbon oxides of sulfur, hydrocarbons)

 • Other substances that deplete the ozone
layer, derived from the ship refrigerators, air conditioning and fire
extinguishing systems. Shipping consumes less per unit of output than the rest
transport and emit less harmful gases into the atmosphere (especially its
dioxide coal). The exhaust gases of the ships contribute to the
“cooling” of the climate and not to the heating of. So despite its
impressive participation in world trade, which it touches 90% of global transport
shows that it is facing its crucial issue climate change and global warming,
shipping should be considered as a best choice to meet the ever-growing global
demand for them transport services.

 

9

Estimated
Impacts on Water

 Water pollution In general it is observed that
there are no detailed information on emissions in water. This is because,
contrary to the air emissions, it is difficult to calculate emission factors
for water. However, some estimates indicate that normal shipping operations are
responsible for over 70% of the oil entering the sea from marine
transportation, but as the oil is often spread over a large number of
locations, the effects of operational discharges may appear less dramatic than
the often catastrophic localized effects of accidental oil spills. 10They
do, however, give rise to a number of chronic pollution problems, particularly
in low energy environments such as ports and harbors. Statistics show that 80%
of oil spills occur in harbor waters. Clearly, these are not the only wastes
discharged by ships. Other vessel discharges may be equally hazardous but to
date have generally received less public attention because they are subtler and
less visible, e.g. chemical discharges. Furthermore, there are arguably less
hazardous but highly visible discharges in the form of garbage. (Ball, 1999).11

Estimated
Impacts on Ecosystem

 Biodiversity loss and habitat degradation As
already mentioned, the study by Cofala et al. (2007) assesses health and
environmental impacts of the shipping emission scenarios, extending the IIASA
RAINS/GAINS integrated assessment model. In particular, they used the loss in
statistical life expectancy attributable to anthropogenic emissions of PM2.5 as
a health impact indicator. The value of that indicator is highly country and
scenario specific. Moreover, they considered the number of cases of premature
deaths attributable to the human exposure to ground-level ozone.12

 Finally, regarding estimates of the protection
of all ecosystems against eutrophication, Cofala et al. (2007) included
forests, semi-natural vegetation, and freshwater catchments and, in particular,
the total ecosystems area with nitrogen deposition above critical loads for
eutrophication. As concerns the negative effects on the ecosystem determined by
discharge of ballast water, described in the section on the impacts, the
literature review highlights that estimation of ballast water volume have been
done. 13

 

 

 

 

4.
CASE STUDY

Ports

One
of the impacts of globalization on maritime transport is the impact on ports.
This impact will be analyzed below based on an example between Piraeus Port
Authority in Greece and the Chinese giant COSCO.

There
are many Asian firms that are taking over ports operations in Europe and
elsewhere in the world and sometimes are the owners as an example port of Piraeus
in Greece is owned by seventy percent from COSCO which is a Chinese shipping
and logistics services supplier company. COSCO owns a fleet of 1114 including
bulk carrier’s container ships and tankers. The annual container volume for
2017 of Piraeus port is almost four million TEU and is ranked among world’s top
30. These Asian firms like COSCO do not have any connections to the specific
ports, but it is only the returns of the investments that they are looking for.
From the side of port authorities like PPA (Piraeus Port Authority) the
feelings are mixed, from the developments. On the other hand you have COSCO
taking the control of the port and attract many other investments to the port.

A
second point of globalization is the connection between ports and container
market. COSCO and Port of Piraeus is more and more seen as a supply chain and
is operating as vertical integration. Mentioning below vertical integration is
best explained with the example of COSCO and Piraeus Port Authority. A shipping
line like COSCO in order to have tighter schedules takes over the container
terminal along with the inland hub. The inland hub, the container terminal and
the port operator now is one entity and is now able to guarantee the handling
of containers on the highest priority. The example that is analyzed above shows
that the whole operation from the manufacture to the delivery in a distribution
centre, in central Europe has no more a lot of actors between but this whole
network is seen now as supply chain. This vertically integration creation,
created this globalized market as it is right now. A positive impact from this
creation is that brings more efficient container handling to the port and the
negative could be that the port is extremely dependant on that firm and if the
demand of that firm drops this vertically integration creation will drop or
collapse because of the dedicated services.

 

5.
Conclusion

 Shipping
has been, is and will be one of the most important activities of man, since
world prosperity depends primarily on it international and interregional trade.
In fact, transport

was considered to be one of the four
pillars of globalization, along with the telecommunications, international
standardization and liberalization of 
trade (Kumar and Hoffmann, 2002).The main purpose of
this assignment was to discuss some of the impacts of globalization on international
maritime transport over the past ten years. It is also possible to conclude
that there is a connection between globalization and maritime transport. The
maritime transport carries out around ninety five percent of all exported
goods. This means that maritime transport can be a cause or can be an important
factor of globalization and at the same time globalization can be an important
factor because is increasing world trade and as a result is increasing the
demand in maritime transport.