Shaping the world economy, and more

Shaping the world economy, and more

Sea trade

Lincoln Paine considers the profound and longstanding effects of shipborne commerce – on cities, people and ecosystems

There is nothing American about the quintessentially American Big Mac; its principal ingredients are alien to the western hemisphere. The wheat for its bun was domesticated in what is now Iraq; the cattle that supply its beef and cheese are native to Turkey; its garnishes of lettuce, mustard, pickled cucumber and onion originated in Egypt, India and central Asia. All of these reached the Americas as familiars of the miscellaneous conquistadors and colonists who carried them across the seas in hopes of replicating their homelands in a new world.

In historical terms, all these and countless other species are newcomers to the Americas, where they arrived by ship scarcely five hundred years ago. Humble though each of them is when viewed in isolation, they contributed directly to the astonishing prosperity of countries from Argentina to Canada, and their movement across the ocean – to say nothing of the people who brought them – is but one instance of the profound and longstanding influence of maritime trade in the world economy.

Six decades of expansion

Carrying the stuff of future hamburgers, Columbus’s Santa Maria
Carrying the stuff of future hamburgers, Columbus’s Santa Maria – a Spanish replica built to commemorate the quatercenternary, and photographed in 1893. Photo: Edward Hart 1904 / Library of Congress. PD

While in the twenty-first century we tend to look skyward for evidence of globalisation, our attention is misdirected. Planes carry the overwhelming majority of intercontinental passengers, but with the exception of a few high-value goods, the bulk of the world’s tangible goods are carried by sea. Even the notion of the computer ‘cloud’ ignores the reality of how the Internet works, because 99 percent of intercontinental data travels via cables laid on the seabed by ships.

According to the United Nations Conference on Trade and Development (UNCTAD), more than 80% of global trade by volume, and more than 70% by value, travels by ship. UNCTAD put the volume of seaborne trade in 2015 at 10.3 billion tons, with a combined value of $25.3 trillion. These figures encompass business-to-consumer and business-to-business sales of myriad different goods, from refrigerated meats, juices, and flowers, to finished products like sneakers, cars, and computers. But the largest share of non-bulk cargoes comprises intermediate goods – components fashioned in various parts of the world and brought together for assembly into finished articles. These end products are then distributed to markets worldwide, once again in the roughly 50,000 seagoing ships of the world fleet. This is to say nothing of the massive quantities of fuel and bulk cargoes like iron ore, coal, grain, sand, and a host of other mundane products.

The only time this process attracts public attention is when sea trade is disrupted and goods are suddenly unavailable. Given our reliance on just-in-time inventory management, even a temporary disruption in flows along the global supply train – from industrial action or a ship sinking, for instance – can have devastating and widely dispersed effects. Anything more severe and sustained, such as armed conflict in the wrong part of the world or prolonged trade wars, could upend the global economy.

This assessment is based not on a generic belief in the importance of sea trade, but on an appreciation of how dramatically it has expanded in the past six decades, from the start of the container revolution and the concomitant rise of the consumer society. Since 1960, the world’s population has grown 2.5 times, but the volume of sea trade has increased 7.5 times. On average, every man, woman and child on the planet has access to three times as much stuff as sixty years ago. The implications for our expectations and worldviews are staggering. There are few consumers or producers, in either advanced economies or the developing world, who could begin to fathom life without the massive, globalised economy we have today. For someone aged forty, a world with a volume of trade reduced just to what it was when he or she was born would be almost unimaginable.

The concentration of wealth

Important though such figures are in helping us make sense of the impact of shipping on daily life, maritime trade is not simply a function of tonnages and monetary values. The directions in which goods flow help determine where wealth is concentrated. Shippers are relentless in their quest for economies of scale, and their concerns – everything from the location of ports to the cost and availability of infrastructure and labour – dictate that a few select coastal and river regions benefit from trade far more than others.

While cities like New Orleans, Rotterdam, and Hong Kong still obviously look seaward, many others, such as London and New York, have been shorn of their working waterfronts. Container terminals require large, flat areas with easy access to highways and railroads and ample space for marshalling containers and trucks. As containerisation developed, islands like Manhattan and congested urban centres like London’s docklands were abandoned, their functions transferred to remote, underdeveloped areas.

Today, there are nearly 5,000 coastal, river, and lake ports of all kinds worldwide. In 2016, the total volume of container throughput was just shy of 700 million TEU (twenty-foot equivalent units); the top 40 ports accounted for 416 million TEU. Put another way, 60% of container traffic is handled by less than 1% of the world’s ports. Because of the costs associated with building, maintaining, and enlarging port facilities to accommodate ever-larger ships, ports that have committed to handling the biggest ships must constantly increase the size and speed of their cargo-handling operations.

Logistical inefficiencies transferred

The results have been transformative. Whereas it once took longer to load or unload a breakbulk freighter than it did for that ship to cross an ocean, now even the largest container ships can be offloaded in a matter of hours. But if ships remain out of sight and out of mind, these efficiencies have real consequences for the rest of us. Ships are only one leg of the intermodal transportation system, the other two being trains and trucks. It is no surprise that we come face-to-face with the latter every day in traffic jams the world over. Laid end-to-end, the number of containers handled at the 40 busiest container ports would circle the equator more than 64 times! In effect, shippers have transferred their logistical inefficiencies onto the rest of us, with easily quantifiable economic and environmental results. According to one study, for example, in 2016 the average commuter in the United States spent 42 hours stuck in traffic and burned $1,400 worth of petrol in the process.

The paradox in all this is that despite the paramount importance of maritime industries to the world economy, ships and seafarers are all but invisible. Although the world fleet has grown by 50% since a century ago, and the ships are vastly bigger, the shipping industry has faded from view. Not only has port infrastructure been moved away from where most people can see it, but the number of workers employed at sea and alongshore has actually shrunk.

Disastrous side effects

Sea trade has had profound economic repercussions of a completely unintended kind, too. The establishment of permanent sea routes between Eurasia and Africa and the Americas made possible the beneficial spread of flora and fauna, including people, from east to west and vice versa, which in turn laid the foundations of the Big Mac. But this seaborne mixing and mingling has also had disastrous side effects. Eurasian and African diseases killed as much as 90% of the indigenous population of the Americas. And in the United States, where some 50,000 non-native plant and animal species have been introduced intentionally or escaped from managed ecosystems like botanical gardens and home aquariums, more than half the country’s endangered bird and plant species are threatened by invasives.

Shipping infrastructure has been more immediately implicated in the diffusion of alien species. One outcome of digging canals is the incidental migration of fish and aquatic plants between formerly remote bodies of water, like the Caribbean and the Pacific via the Panama Canal, or the Mediterranean and Red Seas via the Suez Canal. Of far greater consequence in recent years, the use of ballast water to stabilise ships has led to the introduction of aquatic invasives like the Chinese mitten crab from Asia to the Thames, the zebra mussel from the Black Sea to North America, and the North American comb jellyfish to the Black Sea. The harm done by these animals, among many others, has resulted in billions of dollars in damages to municipal infrastructure, native fisheries and coastal habitat.

A complex picture

The role of maritime trade in shaping the world economy at the local, national, regional and global level is as indisputable as it is complex. We can easily identify positives and negatives in the story of shipborne commerce, but we must view them all in context. Celebrate as we do the indisputable benefits of global shipping, we cannot ignore its adverse impacts. Above all, a proper appreciation of how our world works depends on a basic understanding of the place of sea trade in everyday life.

Lincoln Paine is the author of The Sea and Civilisation, which won a Maritime Media Awards certificate of merit in 2014. He is currently writing a maritime history of America entitled Global America and how it got that way. He lives in Maine, USA.