1. MAIN DRIVERS OF SEABORNE TRANSPORT Marina Zanne, M.Sc. Marina.Zanne@fpp.uni-lj.si

2. Introduction International trade - exchange of capital, goods, and services across borders The exploitation of interregional advanatges

3. Westline – 5000 years of maritime trading centres 1. Phoenicnian era; 2000-3000 BC 3. Roman era; 100 BC 2. Greek era; 300 BC 4. Venice domination 1000 5.Hanseatic league; 1400 6. Dutch domination of trade; 1650 7. Bristish domination of trade; 1735 8. Growing power of N. America; 1880 - 1950 11. China emerges as a major economic power; 1994 - 10. S. Korean Economic growth; 1973 - 1986 9. Japanease economic Growth; 1950 -1970 Stopford M. (2009): Maritime economics, p. 6

4. Development of international trade Restrictions to trade  Bilateral agreements GATT – General agreement on trade and tariffs (in the late 1940s); mechanism designed to provide a framework of rules and a forum to negotiate trade barrier reductions among nations; trade round were organized under GATT; GATT was not a treaty  the necessity of formal international organization  WTO was established during Uruguay Round (1986- 1993); reduction in trading costs by 40%  increased economic liberalisation  free trade

5. Why trading? A – place of production B – place of consumption C – cost price at the place of production D – selling price at the place of production E – last acceptible price at the palce of consumption (this would be the sellingprice if the good was produce at place B) H – price at place B when transport is not efficient J – price at place B when transport is efficient Distance Costs

6. Top trading nations & top trading commodities Wikipedia (October 2010)

7. Seaborne trade Shipping routes reflect world trade flows  cca 90% of international trade is done by sea  competitive freight costs (growing efficiency of maritime transport)  Globalization  in 2008 cca 8 billion tons of cargo were transported over the sea

8. Seaborne trade More than 3.000 commercial sea ports & around 50.000 merchant ships registered in more than 150 countries carry out more than 8 billion tons of cargo per year

9. Trade flows in 2004 Počuča, Zanne: Globalization, international trade and maritime transport, ICTS 2006

10. International seaborne trade by region and commodity type (2005) Stopford M. (2009): Maritime economics, p. 349

11. The changing pattern and structure of trade The changing structure of international trade forced the changes in the merchant fleet. Počuča, Zanne: Globalization, international trade and maritime transport, ICTS 2006

12. The changing structure of trade Year Crude oil Oil productsIron oreCoalGrain Other cargo Total trade Anual growth 2009*2.0075958908703573.2687.987 0,71% 20081.9305608588303443.4097.931 4,74% 20071.8885357997983323.2207.572 5,24% 20061.8515177347543253.0147.195 7,07% 20051.7844956527103102.7696.720 3,50% 20041.7544615896642362.7896.493 5,87% 20031.6734405246192402.6376.133 9,62% 20021.5884144845702452.2945.595 1,49% 20011.5924254525652342.2455.513 1,45% 20001.6084194545232302.2005.434 3,30% 19951.4153814024231961.8704.687 3,34% 19901.1903363473421921.5703.977 3,85% 19858712883212721811.3603.293 -1,80% 19801.3202763141881981.3103.606 3,43% 19751.2632332921271379953.047

13. The changing structure of trade http://www.marisec.org (October 2010)

14. Development of world seaborne tarde (billion ton miles) Branch A. E.: Elements of shipping (8th ed.), Routledge, 2007

15. Market cycles Stopford M. (2009): Maritime economics, p. 97

16. Maritime industry during last crisis lower demand  lower freight & charter rates ships have been slowed down, laid-up or scraped  scrap metal price fell less or dropped orders »

17. Maritime industry during last crisis

18. Conclusions Shipping (maritime) industry made globalization possible (among others) and probably benefits from globalization more than almost any other sector. Shipping industry carries out majority of international trade and it literally makes possible the life as we know today, and which we take for granted. However, this interdependence of international trade and seaborne trade makes shipping industry more vulnerable to economic crisis.

19. Conclusions The demand for maritime transportation is a derived one; it derives from the needs of economy and society. That’s why the shipping industry records significant oscilations.

20. Sources& further reading Stopford M.: Maritime economics, London, Routledge (2009 – 3rd ed. or 1997 – 2nd ed.) The role of changing transport costs and technology in industrial relocation, OECD Report, 2005 Počuča M., Zanne M.: Globalization, international trade and maritime transport, ICTS 2006 Počuča M., Zanne M.: The impact of global economic crisis on the dry bulk shipping industry, Pomorstvo, god. 23, br. 2 (2009)

21. Sources& further reading Korean Maritime Insitute, http://www.kmi.re.kr (October 2010)http://www.kmi.re.kr Shipping and world trade, http://www.marisec.org (October 2010) http://www.marisec.org UNCTAD Review of Maritime transport, http://www.unctad.org (October 2010) http://www.unctad.org