Globalization and sea-based transportation
Syed Ghulam Raza
Over the last few decades the globalization has connected nations around the globe to an extent that all find themselves interdependent in one way or the other. Due to technological, economic and socio-cultural forces, hardly any country can keep itself isolated from the activities of other countries. Communication and transportation means have become key drivers of globalization which has impacted nearly every aspect of modern day life.
Globalization is motivated by the recognition that resources and goods are not always co-located with the populations that desire them thus the global trade of goods is inevitable to meet the needs of masses around the globe. Global trade is being carried out through various forms of freight transportation systems which include ocean routes, inland waterways, railways, roads, and air freight. The sea based transportation, being the cheapest mode and capable of carrying heavy loads, has secured a pivotal role in international trade and global economy. Maritime transport system has become the backbone for global trade and helps to ensure that the benefits of trade and commerce are more evenly spread around the planet earth.
Maritime transportation system is the network of specialized vessels (passenger ships, dry cargo, tankers, dry bulk carriers, special purpose vessels, off- shore vessels etc.), the ports with cargo handling facilities, and transportation infrastructure. For many commodities and trade routes, there is no direct substitute for seaborne commerce. United Nations Conference on Trade and Development (UNCTAD) Review of Maritime Transports 2017, suggests that over 80 per cent of global trade by volume and more than 70 per cent of its value is being carried through maritime transportation.
Maritime transportation not only enables the import and export of goods on the scale necessary to fulfill the needs of modern world but also connects geographically disconnected continents and regions around the planet. With the growing efficiency of shipping and increased economic interdependence, the prospects of industry's growth continue to be strong. UNCTAD secretariat calculations based on Clarksons Research, 2017a reveal continues growth in global maritime trade from 2000 to 2017.
UNCTAD 2017 further reveals that in total, the world commercial fleet on 1 January 2017 consisted of 93,161 vessels, with a combined tonnage of 1.86 billion. This fleet is registered in more than 150 nations and is manned by more than a million seafarers of almost every nationality. An incredible fact about ships which make up this global fleet is that a single ship can carry load equal to thousands of trucks on road carrying necessary goods. Coupled with this modern cruise ships are also significant addition to global maritime transport network which are capable of carrying thousands passengers with all amenities of entertainment and comfort.
Given the increased demand of energy resources and volume of international trade, the maritime transportation has become increasingly important for the global economic affairs. The trade liberalization and advent of new trade corridors have drawn new avenues for the growth of global trade where transportation of commodities like crude oil, edibles, raw materials and finished goods around the planet will expand the horizon of shipping industry. China's Belt and Road Initiative (BRI) is the network of corridors which will have a great impact on global trade and economy.
This venture has two major components: one, overland known as the Silk Road Economic Belt (Road), while the other, the maritime component, is termed as the Maritime Silk Road (Belt). The maritime component of BRI will have significant effect on shipping and trade during the construction phase. Once this venture is operational, it will have a tremendous impact on the overall growth of international maritime sector in the years to come.
The investments in ports development along the Belt will boost containerized trade and broaden the commerce network. The transport infrastructure, when established, is expected to accelerate the global economic growth. It will attract more investment and create demand for other industrial infrastructure, which will likely be transported through seas.
Pakistan, blessed with a long coastline and abundant marine resources, has the potential to become an important maritime nation of Indian Ocean Region (IOR). China-Pakistan Economic Corridor (CPEC), the flagship project of BRI, is an important undertaking having potential to transform Pakistan from a mere coastal state to a maritime nation. CPEC, linking Gwadar Port to the Chinese province of Xinjiang, is part of BRI plan to expand its trade across central and South Asia. CPEC will also provide safe and short trading route for Chinese exports to Africa, Middle East and Europe.
CPEC will be a game changer not only for Pakistan but also for the global trade. It will give China easier access to the Middle Eastern oil via the deep water port of Gwadar. About 60 per cent of oil is being imported from Gulf countries that reach China after covering the distance of 16,000 KMs, and Gwadar port will reduce this journey to 2500 KMs only. This route will cut down transportation time and cost which will have direct impact on the productivity and volume of trade through Gwadar Port. The increased influx of maritime traffic at Gwadar port will invigorate Pakistan's maritime sector.
CPEC's maritime part has attracted the regional and extra-regional states to be partners of this project which envisages that Pakistan will be experiencing an unprecedented maritime activity along its coast. It is expected that the transit of regional maritime trade through Pakistan will also enhance the trading activities at Karachi Port and, Port Qasim which may turn into an opportune time for the growth of Pakistan's shipping industry as well.
In the wake of globalization and evolving trends in sea-based transportation, trade activities through Pakistan's continental waters would not only put national economy on a strong footing but also enhance the role of Pakistan in regional maritime arena. These opportunities emanating from CPEC can only be viable if provided with proper management, planning and security cover in all forms. .