The Role of Shipping in the International Economic Integration

Topic: The role of shipping in the international economic integration

International economic integration is term used to describe globalization. The natural benchmark for thinking about international economic integration is to cinsider a world in which markets for goods, services, factors of production, and information are perfectly intergrated across national borders. The aim of this essay is show how shipping has affected trade (flows of goods).

Sea transport occurs quite early compared to other modes of transport. Since the sixth century BC people have recognised the advantage of sea transport routes to the regional exchanges, and between the different countries in the world. So far sea transport was flourished and became the modern transport industry in the international transportation system. According to the book about topic: Global shipping, “The shipping industry was by far the most important carrier of the expanding global trade in goods and raw materials”.

Nowadys, the importance of shipping has made provision for the transportation sector and its role in global freight trade in unmistakable. Sea transport is a key sector compared to other means of transport for cargo import and export, particularly around 90% of the total volume of goods in world trade is carried by the international shipping industry. Sea transport has some properties that suit for transporting goods in global trade. Shipping can serve all kinds of goods in international trade, and appropriate on very long distances, large volumes. Beside that, carrying capacity of shipping is huge. Overall, capacity of the tool carriage on ship is not limited as the tools of transport. Outstanding point of the seaborne trade is low cost (in 1 / 10 compared to air). In the cargo transport, cost of sea transport is only higher than cost of pipeline transport, and it is much lower compared to cost of other means of transport.

Shipping is an essential factor in global trade. International trade and...