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Sea transport and its importance in international traffic

With the expansion of global trade, the maritime transport sector has expanded and become the most represented branch of transport.

According to the World Trade Organization (WTO), over 80% of world trade takes place by ship. Sea transport has played a significant role in connecting different parts of the world and is essential for global trade.

It is the cheapest and oldest form of transportation. The traffic is performed on natural routes (sea) and does not require large capital investments in the construction and maintenance of roads unless it is a canal.

Transport costs are also low, making this form of transport the most suitable for transporting bulky goods over long distances.

Types of maritime transport

Maritime transport is essential for foreign trade. It has merged different parts of the world into one big market and is divided into coastal and ocean freight.

Coastal transport is one of the most important forms of transportation for transferring goods from one part of the country to another. It is cheaper and faster and is the most convenient transport mode for transporting massive, bulky and cheap goods.

Ocean freight is performed by three types of ships - liner ships and ships without a specific line or tramp ships and tankers.

Liner ships have regular routes, schedules and prices. It is usually a fleet of vessels under one ownership. They provide a unique and regular service and sail on a pre-scheduled date and time regardless of cargo amount.

Tramp ships do not have fixed routes. They usually do not sail if they are not full of cargo. They are typically rented and are ready to sail anywhere and anytime, but they are not as fast as liner boats. Tramp boats are best suited for transporting seasonal and bulky goods.

Tankers are vessels specially designed to transport oil, gasoline and similar liquids and have large tank capacities.

Sea transport costs

Maritime transport handles over 80% of global trade and transports ⅘ world trade. International transport costs are a crucial component of trade costs and economic development.

Container traffic is the most advanced form of transport of goods by the sea with container ports as the main hubs where container transshipment occurs. It is an essential link in international trade and supply chains and directly affects the world economy's success level.

In the growing economic globalization, there is an increasing need to ship large cargo quantities in the shortest possible time. This has led to the construction of mega-ships that can transport vast amounts of goods with thousands of containers in just one voyage.

There are several criteria on which the price of shipping in maritime transport is based.

When determining freight rates, it is necessary to collect data on the type, weight and capacity of cargo, the value of shipment, destination, direction and speed of transport, the size, number and type of containers.

There are two basic freight transport types in container traffic and thus two ways of calculating freight: FCL (full container load) and LCL (less than container load).

Freight rates for FCL containers are lower than LCL freight rates for the same amount. FCL freight rates are used more frequently as they do not incur additional costs for loading and unloading cargo for multiple shippers and consignees.

On the other hand, the application of LCL freight rates has enabled cheaper maritime transport for small individual cargo shipments that only partially utilize standardized containers' capacities.

The basic freight is the transport fee calculated for moving the cargo. The essential elements of container freight are:

1. Basic ocean freight (BAS)

2. Container mandatory surcharges (CMS)

3. Value-added services (VAS)

The essential freight charges that are most often used are:

THC (terminal handling costs) - includes the costs of handling the container at the port of destination or the terminal. The service is applicable to all products (they are determined in a fixed amount for the period in which the container shippers have concluded contracts with the operators of container terminals)

BAF (bunker adjustment factor) - covers the cost of marine fuel in situations where fuel prices rise above a certain level (protects shipowners from constant changes in fuel prices on the world market)

CAF (currency adjustment factor) - covers additional costs that shipping companies have when dealing with exchange rates between the different currencies.

Other significant freight charges to mention are port congestion surcharge, IMO surcharge, heavyweight charge, winter surcharge, ISPS - security charges, Suez and Panama canal surcharge, B/L fee, handling fee, demurrage, detention, container cleaning, change B/L fee, document and change manifest fee, delivery order fee 66, inspection fee.

Which transport to choose - road, air, rail or sea, largely depends on the type of transported goods.

Choosing optimal and economical transportation is based on significant factors, such as the size of transported goods and the timeframe in which the goods should reach their destination.

Advantages of maritime transport

International trade is impossible to imagine without the maritime industry. Maritime transport is the most efficient and, in some situations, the only possible means of trading goods.

It is attractive to many companies, huge multinational companies. As such, it has many advantages.

1. Low price

The sea is a natural traffic route that does not require any construction and maintenance costs, so maritime transport is one of the cheapest transportation forms.

In a competitive business environment, most companies are looking for ways to reduce their costs. Freight transportation costs are one of the highest prices for a company. Reducing these costs can improve the overall business, lead to higher revenues and higher profitability.

Maritime transport services are generally cheaper than air transport services because it allows companies to deliver goods in large quantities. If you do not have an urgent shipment, the maritime transport of goods will be more financially viable than air transport.

2. Larger capacities

Ships can carry much larger quantities of heavy and bulky goods.

Maritime cargo shipping's main advantage is the handling and transport of oversized, heavy and bulky cargo. Such cargo includes large vehicles, equipment, construction materials.

Unlike road and air transport, which does not tolerate oversized shipments, bulky or heavy load is ideal for maritime transport.

3. Flexible service

This form of transport provides a much more flexible service that can be tailored to individual requirements. Regardless of the size and type of your shipments, shipping companies will adapt to all your needs.

4. Security

Compared to any other form of transport, the risks of accidents and breakdowns are minimal for this type of transportation. Maritime transport is the safest way to send shipments, especially dangerous and prohibited content.

Ships are designed to transport hazardous materials and dangerous goods safely and the industry is well-versed in handling this type of goods.

The safety of maritime transport has been continuously increasing in the last ten years. For added cargo safety, the tanks are designed to close and lock during transport.

Disadvantages of maritime transport

Depending on the situation, these advantages will sometimes not be enough because these few disadvantages could be decisive when choosing the appropriate shipment form.

1. Speed

If you need to transport the goods to the destination in the shortest possible time, maritime transport will not meet your needs.

Shipping by sea can sometimes take longer (up to several weeks), so this form of transport is inappropriate in situations where short delivery time is an essential factor. That is why shipping is best for “unlimited” deliveries.

When choosing faster transportation, make sure the quicker delivery will bring you higher earnings. If a slower transport will not negatively affect profits, selecting a much more affordable maritime transport seems to be the optimal choice.

2. Risk of transport of goods

Maritime freight options are not as reliable as air transport options. Various problems can occur on ships, so there is always the possibility that your delivery will be delayed.

Shipment delivery can be affected by weather conditions (storms, monsoons, etc.), sinking of ships and lost containers.

Despite advances in tracking technology, due to adverse weather conditions, tracking the speed of progress and shipment status may sometimes be unavailable.

3. Lack of infrastructure

Some parts of the world might not have ports and terminals' facilities and cannot receive large ships carrying containers.

4. Documentation

When transporting goods by sea, it is necessary to fill out much more documentation than for any other transportation form.

The documents need to be completed accurately and carefully to avoid customs clearance problems and enable entry to ports and international waterways.

If you don’t have a deadline and you don’t care about the speed of sending the shipment, shipping could be the best option for you.

Benefits of sea transport

Maritime transport is one of the oldest and most accessible freight transportation options because the oceans and waterways cover most of our planet.

The international shipping industry transports more than 80 percent of the world’s goods. Besides alternative options, such as air, road and rail, maritime transport brings some benefits.

Economy

Maritime transport has the most competitive costs, mostly when cargo is transported over long distances.

It is estimated that the cost of sea freight is four to six times cheaper than air freight. According to statistics, maritime transport is the most affordable international option for shipping cargo.

Efficiency

Regardless of the size of the shipment, shipping companies can usually meet all of your needs.

Smaller loads can be grouped with another cargo to fill the container, which allows the cost of transportation services to be shared, while larger cargo can serve one or more containers.

Vessels are designed to transport large quantities of goods or raw materials, so they are ideal for moving large cargo amounts.

Environmentally friendly

Consumers are increasingly informed and aware of environmental issues and expect companies to be environmentally conscious in their business and throughout the supply chain process.

Ships provide the most efficient mode of transport and produce a lower mass of exhaust emissions than any other cargo shipment. Compared to road and air transport, maritime transport is the most environmentally efficient solution.

Choosing the maritime freight transport service will result in fewer greenhouse gases due to additional space capacity.

Find your ideal route

Maritime transport is a popular method of importing and exporting goods in general and consumer goods, mainly travel long distances.

Maritime transport will remain the primary choice for most products' long-term delivery, from sugar and cereals to fruits and vegetables.

As a driving force of global economic vitality, maritime transport contributes significantly to international stability and security.

Maritime transport service is an economical solution for sending many cargo shipments whose delivery is not limited by time.

Maritime transport is ideal for sending cargo shipments and partially (LCL) or fully leased containers (FCL), dangerous goods and is more environmentally efficient.

Our safe and reliable services will ensure the safe transport of your goods from at least one cubic meter of cargo to all continents and to all world ports in the shortest possible time.

If maritime shipping is not the service you are looking for, the Hubbig digital platform offers you alternative shipping services, such as FTL, LTL and air transport.

In one place and just a few simple clicks, you can find the optimal and complete transport solution tailored to your import or export needs.

Hubbig has partnerships with top carriers that can provide you with fast, safe and reliable transport.

Register today and successfully find the transportation that best suits the requirements of your business.


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