Growth and transformation through globalisation

Throughout history the oceans have been important to people around the world as a means of transportation. Unlike a few decades ago, however, ships are now carrying goods rather than people. Tankers, bulk carriers and container ships are today's most important means of transportation and each year carry billions of tonnes of goods along a few principal trade routes.

The main reason behind the massive increase in shipping has been the growth in world trade. But institutional and technological factors also had a role to play.

In the past, the liberalization achievements under GATT and its successor the WTO provided a new momentum to world trade. China’s economic opening to the outside world, which led to its 2001 admission to the WTO, was also very significant – its exports quadrupled within 5 years. Another example of integrated markets boosting international trade is a trebling of exports from Mexico to the USA within 6 years of NAFTA being established.

The appetites of the industrial nations and newly-industrializing emerging economies for energy and mineral resources led to increasing quantities of goods being transported from far-distant countries.

The information and communications technology revolution dramatically reduced the costs of mobility and accessibility. It allowed new network connections and production processes such as just-in-time production, outsourcing and offshoring, and provided a tremendous stimulus to logistics. As a result of rising demand, transportation costs fell. Ships increased in size. Economies of scale were exploited.

Furthermore, there were technological advances and organizational improvements in port management – of general cargo traffic, for instance. Of overriding importance was containerization, the greatest transportation revolution of the 20th century.

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