^Steamship Introduced the First Wave of Trade Globalization in 1870-1913. Image Courtesy of Morphart Creation at ShutterStock.com
Mutual Influencers: Globalization & Shipping Technology
No one put it better than former UN Secretary General Kofi Annan – arguing against globalization is like arguing against gravity. And shipping is one of the four essential ingredients of globalization. Communications, international standardization, and trade liberalization are the other three.
Globalization opens up the doors for the free flow of knowledge, resources, goods, and services among nations. This frees up new markets for producers and offers fresh avenues of employment for talented manpower.
With the innate professional instincts thus provoked, the productivity of people shoots through the roof. And the genuine, long term motivator of economic growth and development is productivity improvement. As simple as that.
Transportation in general and maritime shipping in particular are bound in a reciprocal relationship with globalization. While they promote globalization, the latter spurs them into incorporating massive technological changes. That, precisely, is how both move ahead.
In the years to come, concerns on global energy use and environmental protection will increasingly drive the technological transformations in maritime shipping. Of course, globalization will set the wider canvass for such changes.
Why Economies Trade?
Maritime shipping includes all the different types of vessels, ports, terminals, and the transportation networks that connect production and distribution centers to ports.
Human and material resources are not always located at places where people wish to use them. This creates the need for trade and transport. For example, oil refineries are not located near oil wells because it is cheaper to transport oil in large quantities and refine it near the market.
Let us take the discussion to the level of human resources. Is it not simpler and cheaper to get a dress stitched from a tailor than to make it yourself? You make what you are good at and buy the rest.
The same holds good at the international stage – countries make what they are good at and import the rest. And the import for one economy becomes export for the other. This is why nations trade.
And when you make something that you are good at over and over again, you refine your skills and take your productivity to higher levels. As mentioned, productivity amplification facilitates genuine economic development.
But you cannot get such productivity augmentation without the free flow of resources, goods, services, and knowledge i.e. globalization. Raw materials currently move inexpensively to cheap-labor economies. And finished goods moved cost-effectively back to the developed world.
And yes, trade does facilitate economic growth and development. Between 1992 and 2006, OECD nations recorded a 1% increase in GDP for every 4% (approximate) rise in trade.
So says the paper The Impacts of Globalization on International Maritime Transport Activity by James J Corbett & James Winebrake, Energy & Environmental Research Associates, United States. And rightly so.
Traditional Drivers of Shipping Technological Advances
Slashing transportation costs spurs trade expansion. This is what the paper The Wind of Change: Maritime Technology, Trade & Economic Development by Luigi Pascali at the University of Warwick, CAGE, Pompeu Fabra University, and Barcelona GSE concludes.
And the deduction is absolutely right. We have observed the same more than once. The paper identifies as the widespread use of the steamship as the force for the first wave of globalization between 1870 and 1913.
This is because steamships eliminated the dependence of ships on planetary winds. During the Age of Sail, these winds propelled ships. Plying in areas with low speed winds was a painfully slow process. With steam to drive ships, we no longer needed these winds.
But if we are to go by the ancient adage that necessity creates the need for invention, which by the way is always right, there must have been some need that stimulated this invention. What was it? The answer is globalization.
Way before the 1870-1913 phase, European powers were on a spree of acquiring colonies. The Industrial Revolution i.e. the unprecedented use of machines had expanded the production capacity of their industries to unparalleled levels.
In order to make the most of this newfound capacity, they needed two things. One, an immense supply of raw materials to feed their insatiable industrial infrastructure. And an assured market for all this surplus production. Colonies provided both.
But colonies were located far, far away from their masters. It was this need to transport immense quantities of raw materials and finished goods safely, cheaply, quickly, and reliably between the colonies and the colonial powers that stirred the invention of the steamship. And globalization includes the free international movement of goods.
It is therefore no surprise that Britain was the global superpower of this era. The Industrial Revolution began here in about 1750. And she was the naval and maritime superpower – why – because she is an island and felt the need to develop shipping from very early times.
The same need to transport goods cheaply, rapidly, safely, and reliably stimulated the development of container ships and oil tankers in the latter half of the 20th century. Please note, the cost of shipping one unit of cargo falls drastically when you transport it in large amounts.
And it is this very necessity that led to the development of the first:
- bulk carrier in 1852
- tanker in 1886
- refrigerated vessel in 1880
- combined carrier in 1925
- chemical tanker in 1956
- car carrier in 1956
- deep sea cellular container ship in 1965
Two More Drivers of Today & Related Developments
Presently, there are two fresh drivers – energy use and environment. With the world running out of conventional fuels and the environment signaling its incapacity to absorb very little of our wastes, it is high time we use fuels, technologies, and practices that minimize emissions.
Environmental pollution from ships can be routine or episodic. The latter is the pollution caused by occasional events such as oil spills or ocean dumpings. Collisions that cause spills also fall under this head. A preventive approach checks such events.
Routine pollution includes the discharges occurring from regular shipping activities. A host of emission control technologies have evolved to curtail the routine emissions of GHGs, nitrogen oxides (NOX), sulphur oxides (SOX), and particulate matter (PM10) from ships.
Then again, there is the issue of transfer of invasive aquatic species due to ballast water exchanges. As yet, the Ballast Water Management Convention 2004 has not gathered enough signatories to be globally applicable.
And the divergence between standards on ballast water management prescribed by the United States Coast Guard (USCG) and the International Maritime Organization (IMO) is a source of considerable confusion.
Observers have also noted an increase in the number of collisions between ships and sea mammals (mainly whales) with an expansion in the size and speed of ships.
Let us now review the related technological headways. Modern shipping began in the 1860s when builders made the first workable iron-hulled steamship. Then came diesel-engine propelled ships in the 1910s. Soon welding replaced riveted joints and automation cut crew sizes.
In a way, petroleum was the first alternative fuel for ships. It freed up the space needed for storing fuel (coal and later oil) needed to produce steam. Ships could run faster and you could refuel them while at sea.
Efficiencies of the diesel engine spiked from 35% to 40% in 1975. The 1980s witnessed a further 25% hike in engine efficiency. Today’s marine diesel engines boast of efficiency in excess of 50%.
Streamlined hulls lowered steel requirement by 30% while hull coatings cut down drag on the hull and boosted its life. Navigation equipment and cargo handling gears have all improved.
Then there is the specialization of cargo handling equipment that drastically cut loading-unloading times. All these strides contributed to improvements in shipping’s energy efficiency.
Energy use and environmental pollution are serious issues with shipping. Although shipping is among the least polluting modes of transport, the fact that it transports 90% of the globally traded cargo means that it emits considerable pollutants.
But because fuel costs make up 20-60% of shipping costs, owners and operators have a strong incentive to cut fuel use that automatically cuts down emissions.
While the need to make shipping greener is uncontested, there happens to be fundamental flaw that keeps shipping out of the ambit of international GHG control accords such as the Kyoto and Copenhagen Protocols and the Paris Accord.
Ships ply between numerous regions and ports. Each of these has its own emission caps. Such multiplicity of regulations introduces an uncertainty as to which cap to follow. Regulators therefore emit global shipping and aviation from their purview.
All is not lost though. From January 1, 2015, ships moving through Emission Control Areas (ECAs) have to use fuel with 0.1% (by weight) or less sulphur.
Now, there are only four ECAs at present – the North American, Caribbean, Baltic, and North Sea ECAs. By 2025, even areas outside the present ECAs will need to use fuel with less than 0.5% sulphur.
The ECA phenomenon offers great hope for we could have something similar for other pollutants. After all, there is global pressure to counter global warming and shipping is a quintessentially global industry. And it is globalization (free flow of knowledge) that creates such global pressure.
Marine fuel can be residual fuel or other fuel. Residual fuels are those left behind after the distillation process of crude oil extracts the valuable constituents. These contain higher percentages of contaminants such as sulphur, metals, and ash.
Since the 1973 Oil Crisis, refineries have adopted thermal cracking techniques to extract more and more of the valuable constituents in crude oil. This has left residual oils with greater percentages of contaminants.
Residual oils are cheap and most marine engines are designed to burn them. With environmental awareness catching up, the movement towards cleaner and greener fuels is inevitable.
As we move deeper into the 21st century, the process for establishing and operating a sustainable, multimodal transport system will gather pace. This system will integrate water, rail, air, road, and pipeline transport to offer seamless and minimum-emission delivery of goods.
Apart from regulatory standards that will evolve at the national and regional levels to the international level – the ECA phenomenon for example – the development of metrics for pollution measurement will be an important driver for cleaner shipping.
Visit our blog for more such insightful content on the fundamentals of maritime shipping. And if you wish for top class marine fabrication services, marine pipe fitting, and large scale custom metal fabrication, contact Kemplon Engineering.