Basis of International Trade:

The basis of international trade lies in the diversity of economic resources in different
countries. All countries are endowed by nature with the same production facilities. There
are differences in climatic conditions and geological deposits as also in the supply of labor
and capital.

1) Air transportation & their Merits & De merits?

Merits And Demerits Of Air Transport

Merits Of Air Transport System

Major advantages or merits of air transport can be expressed as follows:

1. Greater Speed

The most important merit of air transport is its speed. Not any other means of
transport is faster than the means of air transport. It carries people or goods from
one place to another within very short time.

2. Free And Short Route

Planes can fly over everywhere, whether it is hill, forest, sea or desert. No
investment is needed to construct air route. Its route is also short.

3. Suitable For Perishable And Valuable Goods

The means of air transport is very useful means to transport perishable, valuable
light goods, medicines etc.

4. National Defense

Air transport is very useful for national defense.

Demerits Of Air Transport System

Major disadvantages or demerits of air transport can be expressed as follows:

1. Costly

High cost is the main disadvantages or demerit of air transport system. Means of air
transport is the costliest among all the means of transport. It needs investment of
huge capital.

2. Limited Capacity

The capacity of airways to carry goods or passengers is limited. It can carry only
certain limit of goods or people. It becomes unsuitable to transport heavy goods.
3. Risky

Airways becomes risky to carry goods or people. There remains possibility of air
crash.

4. Uncertain

Airways have no certainty and regularity. It is highly affected by weather changes. It

cannot be operated in adverse weather.

Advantages and Disadvantages

of Road Transport
There are numerous advantages of road transport in comparison to
other modes of transport:

Advantages:
1. Less Capital Outlay:
ADVERTISEMENTS:

Road transport required much less capital Investment as compared

to other modes of transport such as railways and air transport. The
cost of constructing, operating and maintaining roads is cheaper
than that of the railways. Roads are generally constructed by the
government and local authorities and only a small revenue is
charged for the use of roads.

2. Door to Door Service:

The outstanding advantage of road transport is that it provides door
to door or warehouse to warehouse service. This reduces cartage,
loading and unloading expenses.

3. Service in Rural Areas:

ADVERTISEMENTS:
Road transport is most suited for carrying goods and people to and
from rural areas which are not served by rail, water or air transport.
Exchange of goods, between large towns and small villages is made
possible only through road transport.

4. Flexible Service:
Road transport has a great advantage over other modes of transport
for its flexible service, its routes and timings can be adjusted and
changed to individual requirements without much inconvenience.

5. Suitable for Short Distance:

ADVERTISEMENTS:

It is more economic and quicker for carrying goods and people over
short distances. Delays in transit of goods on account of
intermediate loading and handling are avoided. Goods can be
loaded direct into a road vehicle and transported straight to their
place of destination.

6. Lesser Risk of Damage in Transit:

As the intermediate loading and handling is avoided, there is lesser
risk of damage, breakage etc. of the goods in transit. Thus, road
transport is most suited for transporting delicate goods like
chinaware and glassware, which are likely to be damaged in the
process of loading and unloading.

7. Saving in Packing Cost:

ADVERTISEMENTS:
As compared to other modes of transport, the process of packing in
motor transport is less complicated. Goods transported by motor
transport require less packing or no packing in several cases.

8. Rapid Speed:
If the goods are to be sent immediately or quickly, motor transport
is more suited than the railways or water transport. Water transport
is very slow. Also much time is wasted in booking the goods and
taking delivery of the goods in case of railway and water transport.

9. Less Cost:
Road transport not only requires less initial capital investment, the
cost of operation and maintenance is also comparatively less. Even
if the rate charged by motor transport is a little higher than that by
the railways, the actual effective cost of transporting goods by motor
transport is less. The actual cost is less because the motor transport
saves in packing costs and the expenses of intermediate loading,
unloading and handling charges.

10. Private Owned Vehicles:

Another advantage of road transport is that big businessmen can
afford to have their own motor vehicles and initiate their own road
services to market their products without causing any delay.

11. Feeder to other Modes of Transport:

The movement of goods begins and ultimately ends by making use
of roads. Road and motor transport act as a feeder to the other
modes of transport such as railways, ships and airways.

Disadvantages:
In spite of various merits, road/motor has some serious
limitations:
1. Seasonal Nature:
Motor transport is not as reliable as rail transport. During rainy or
flood season, roads become unfit and unsafe for use.

2. Accidents and Breakdowns:

There are more chances of accidents and breakdowns in case of
motor transport. Thus, motor transport is not as safe as rail
transport.

3. Unsuitable for Long Distance and Bulky Traffic:

This mode of transport is unsuitable and costly for transporting
cheap and bulky goods over long distances.

4. Slow Speed:
The speed of motor transport is comparatively slow and limited.

5. Lack of Organisation:
The road transport is comparatively less organised. More often, it is
irregular and undependable. The rates charged for transportation
are also unstable and unequal.

International transport and distribution

Advantages and disadvantages of sea transport for
international trade
Guide
If your business needs to transport large quantities but there is no pressure to deliver quickly,
shipping by sea may be beneficial. You need to carefully assess the advantages and
disadvanatages of shipping goods by sea.

Advantages of shipping goods by sea freight

Some of the advantages of transporting goods by sea include:
  you can ship large volumes at low costs - a freight forwarder can consolidate
consignments to reduce costs
 shipping containers can also be used for further transportation by road or rail
Disadvantages of shipping goods by sea freight
There are risks and disadvantages of transporting goods by sea, including:

 shipping by sea can be slower than other transport modes and bad weather can add
further delays
 routes and timetables are usually inflexible
 tracking your goods' progress is difficult
 you have to pay port duties and taxes
 further transportation overland will be needed to reach the final destination
 basic freight rates are subject to fuel and currency surcharges
Protect your consignments with cargo insurance. Under the maritime transport conventions you
automatically have limited insurance cover under the Hague-Visby and Hamburg rules. However,
it's advisable to get additional insurance, such as general cargo insurance.

For more detailed information on your maritime freight options see how to move goods by

WORLD SEABORNE TRADE SET TO EXPAND STEADILY

Geneva, Switzerland, 29 October 1997

Overall world seaborne trade in 1997 is expected to notch-up its fastest growth rate since
1990, growing by 3.8 per cent over the previous year to reach 4.94 billion metric tons. This
year´s anticipated growth marks a substantial recovery from the 2.3 per cent increase
recorded in 1996. If confirmed, it will also be above the annual average of 3.7 per cent
achieved during the previous decade.
As the medium-term forecast for the coming decade is for an average annual growth of 3.9
per cent in the main sectors of world seaborne trade, the overall figure for 1997 -- announced
today by UNCTAD in its Review of Maritime Transport, 1997 (1)(140 pp) -- could mark the
start of a period of steady expansion in the years ahead.
The Review is an annual publication from UNCTAD, giving trends in seaborne trade and
analysing the comparative performance of different geographic regions. It focuses in
particular on the situation of developing countries. This year, it examines the way in which
high transportation costs are impeding the development of small island developing countries,
for whom UNCTAD plays a monitoring role within the UN system.
Breaking down the aggregate 1996 figures, the Review reports that the main driving forces
behind that year´s performance were the shipment of growing volumes of manufactured
goods in containerized form (up 4.0 per cent over 1995) and reasonably strong demand for
tanker shipments (up by 3.8 per cent). Dragging down the year´s figures, however, was the
poor performance of dry bulk cargo shipments, which rose by a paltry 1.1 per cent. This was
mainly due to declines in iron ore and grain shipments, which fell by 3.1 per cent and 4.1 per
cent respectively.
In 1997, these trends are expected to reverse themselves. While tanker demand is expected
to weaken, growing at only 2.4 per cent, dry cargo looks set for its second strongest
performance in a decade; increasing overall by 5.1 per cent, strong demand for main bulk
commodities will be mainly responsible.
For the developing countries, the latest figures from UNCTAD confirm the remarkably steady
share of seaborne trade they have maintained during the 1990s. Despite the fast growth until
recently of much of Southeast and East Asia, and the fluctuating performance of the African
and Latin American economies, statistics show that over this period the developing countries
have maintained an approximate 50 - 51 per cent share of cargo loaded, and 26 - 27 per
cent share of cargo unloaded. The heavy weight of the oil trade in the shipping to and from
developing countries is key to this statistical stability.
For the record: in 1997, developing countries´ share of seaborne cargo unloaded is expected
to edge downwards, from 51.3 to 50.7 per cent. As for cargo loaded, this too will likely decline
fractionally, from 26.7 to 26.5 per cent, continuing a modest downward trend.
Looking into the regional variations among developing countries, in 1996, the share of Asian
countries in both goods loaded and unloaded decreased marginally, to 26.6 per cent and
17.7 per cent respectively. In the Americas, goods loaded showed a modest increase, from
13.1 to 13.5 per cent, while in Africa there was a significant jump, from 10.1 to 10.8 per cent.
Developing countries improve fleet ownership position due to maritime investment in
Asian countries
The world merchant fleet continued to expand to 758.2 million deadweight tons (dwt) by the
end of 1996. At 3.2 per cent, the rate of tonnage increase was slightly higher than that of
seaborne trade, resulting in marginally decreasing productivity of the world fleet. The volume
of cargo carried per dwt slightly decreased to 6.28 in 1996 from the record level of 6.33
reached in 1995. Another performance indicator, ton-miles per dwt, also declined in 1996, to
27,097, from the 1995 record of 27,675 ton-miles per dwt.
Analysis of the regional structure of the world fleet shows a moderate increase in the share of
developing countries in 1996. They expanded their fleet to 147.5 million dwt, representing
19.5 per cent of the world fleet, compared to 18.7 per cent in 1995. This development was
augmented by qualitative improvements, particularly in the containership sectors, where their
share increased to 18.1 per cent. Investment in new tonnage has helped to reduce the
average age of the container fleet to 12.1 years, which is in line with the world average.
Regional ownership patterns, however, remain problematic and unbalanced. In particular,
container tonnage is concentrated in Asian developing countries. They own 14.4 per cent of
the world container tonnage, or 80 per cent of the developing countries´ fleet, while African
developing countries own virtually no container tonnage at all.
Focus on small island developing States(2)

 Growth in trade with developing countries

In a special chapter the 1997 issue of the Review focuses on the maritime problems of
small island developing States. The development of these countries and their
integration in the world economy is nearly exclusively dependent on access to inter-
island and international shipping services.
 Total exports of goods of small island developing States increased at about 11.5 per
cent annually for the period 1988 - 1994, with the fastest growth being in manufactures
(an average annual growth rate of 17.2 per cent). The direction of exports changed over
the period 1988 - 1994. In 1988, developed market-economy countries imported about
56 per cent of small island developing States´ exports. However, by 1994, the
developed market-economy countries´ share had declined to 44.5 per cent. Making up
the difference were the other developing countries whose share of small island
developing States´ exports jumped from 39.9 per cent in 1988 to 51.8 per cent in 1994.
Meanwhile small island developing States´ total imports also increased at an annual
average rate of 8.9 per cent over the period 1988 - 1994. Manufactured goods
accounted for the largest share of imports (81 per cent in 1994).

 Their fleet is ageing and needs replacement

Fleet statistics pertaining to the group of small island developing States are distorted by
the widespread offer of open-registry facilities by some countries in this group. True
ownership of tonnage remains minimal. Even though their foreign trade is nearly
exclusively dependent on the availability of maritime transport services, their
participation therein is negligible. However, a large number of vessels of less than 100
gross registered tons (grt) are operating in many small island developing States, serving
local markets. The age of the fleet of 100 grt and above is the second qualitative factor.
Almost 50 per cent of the merchant fleet is 15 years old or over. This ageing fleet leads
to higher operating costs, as repair and maintenance rapidly increase with age.
Schedule delays and unreliability, as well as greater environmental risks, are associated
with obsolete vessels.

 High freight costs due to inefficient maritime transport and port infrastructure

Efficient maritime transport systems and port infrastructure are particularly important for
small island developing States. Current handicaps include high distribution costs, lack of
reliable shipping services, expensive transhipment charges, inadequate port facilities,
weak maritime administration and the absence of economies of scale when negotiating
freight rates with shipping lines. Freight costs as a percentage of total import values can
be as high as 11 per cent, compared with 4.2 per cent for developed market-economy
countries and 8.3 per cent for developing countries as a whole. The more remote small
island countries incur even higher freight costs, ranging from 12 to 18 per cent of import
value.
Restructuring trends in the international liner shipping industry are another factor
affecting the transportation capabilities of many small island developing States. Over the
last decade, agreements between large container operators have resulted in a
concentration of services. This has created economies of scale for them, and
encouraged the expansion of hub-and-spoke service patterns between major trading
areas.
For small island developing States, however, the consequence has been an increased
need for transhipment port services, the acquisition of vessels with container-lifting
 capabilities, investment in electronic data interchange (EDI) technology and the training
of management personnel. Without the necessary investments in infrastructure and
technology, the prospects of many small island developing States to trade effectively,
and sustain development, will diminish.

What is sea borne trade?

The seaborne trade balance measures the difference between the volumes of
loaded and unloaded goods. Dry cargo refers to cargo that is usually not carried in
tankers, such as dry bulks (e.g. coal, ores, grains), pallets, bags, crates, and
containers.
Why is seaborne trade important?

Seaborne trade continues to expand, bringing benefits for consumers across the
world through competitive freight costs. Thanks to the growing efficiency of
shipping as a mode of transport and increased economic liberalisation, the prospects
for the industry's further growth continue to be strong.

What are the main seaborne commodity trade groups?

(1), yt contains world GDP (GDP) which accounts for the state of the world's
macroeconomic environment, the price of oil (OIL) as a proxy for freight rates, and
the quantities of three seaborne trade categories, in tonnes: crude oil loaded
(CRUDE), petroleum products and gas loaded (PRODUCTS), and dry cargo
loaded ( ...
How much of world trade is by sea?
Maritime transport is the backbone of international trade and the global economy.
Around 80 per cent of global trade by volume and over 70 per cent of global trade
by value are carried by sea and are handled by ports worldwide.
What is seaborne cargo?
The definition of seaborne is having been carried by a ship, or a ship that has left
port. An example of seaborne used as an adjective is seaborne cargo, cargo that is
carried on a shipping boat. ... Carried on or by seagoing ships.
What is the meaning of seaborne iron ore?
adj. 1 carried on or by the sea.
Types of Cargo Shipped by Sea Freight Transport
Sea transport was the main vehicle of international commerce for centuries and is still a popular mode
of transportation due to factors such as high load capacity, low cost, and reliability in bad
weather. Sea freight transport is also a preferred solution for shipments across long distances.

Types of Goods Transported by Sea

The main categories of cargo transported by sea include roll on/roll off, break bulk, dry bulk, liquid
bulk, and container cargo.

Photo: https://solutionsforshipping.com

Container Cargo

Containers are used to ship items such as computers, meat, clothing, televisions, and toys. Goods are
usually shipped in containers with metal walls to protect them against extreme temperatures,
moisture, and bad weather conditions. Containers transported by sea also fit on train wagons, barges,
and trucks.

Liquid Bulk

Hazardous goods that fall in the category of liquid bulk include fuel oil, petrol, and crude oil. They are
shipped on big tankers and transported to refineries and other facilities. Barge-towing trains and
tankers are used to ship petroleum products while chemical and food industry products are often
transported by chemical tankers. The vessels are subject to regular monitoring and vetting inspections
to ensure that they meet safety requirements. Logistics service providers that ship liquid bulk
specialize in supply management, quality control, and labelling and packaging. Partnering with freight
ship companies, IFA members also specialize in rapid and intermodal transport and have access to
storage facilities that meet environmental, industrial, firefighting, and fire prevention standards.

Dry Bulk

The category of dry bulk cargo includes goods such as sand, salt, sugar, cement, iron ore, coal, and
grain. Dry bulk can be divided into two sub-categories – minor and major bulk products. The first
category includes items such as fertilizers, minerals, and cement while the second category includes
products such as iron ore and coal. Some dangerous goods are also shipped by bulk carriers and
require special measures during discharge, transportation, and loading. Cargo that may liquefy during
shipping is a safety hazard as liquefaction may result in loss of the ship. Examples of dry bulk cargo of
this type are zinc and nickel concentrate, coal, and nickel ore. Special measures are required during
shipping, including visual monitoring and monitoring of moisture content.

Break Bulk

Individual or break bulk cargo refers to cargo that requires individual loading and includes goods such
as art, household furniture, farm machinery, and vehicle parts. General cargo ships are used to
transport break bulk cargo, and items are loaded in barrels, drums, crates, and boxes. Weather-
resistant and military types of corrugated fiberboard are also used to ship break bulk cargo.

Roll on/roll off

This category includes rolling stock such as project cargo, heavy machinery, machines, and vehicles.
Ports that handle roll on/roll off cargo offer a number of specialized services such as second stage
manufacturing, spraying, dewaxing, and washing, repair, and installation of air-conditioning, hooks,
bumps, and other components. Pre-delivery inspections are also conducted in vehicle processing
centres. Additional services include stock management, fiscal representation, and distribution and
storage of cargo.