What is Maritime Trade?

Maritime Trade is an exchange of goods and commodities through seaways between two countries. Humans are utilizing the waterways around the globe for many centuries as a crucial way of trade and transport. Modern time’s maritime trade operates through advanced, durable, and bigger ships. Trading has become more efficient recently which allows large quantities to trade between nations. As compared to other trading options it is a more cost-effective and convenient way to transport manufactured goods from one country to another.

It is an essential factor in the growth and development of the world’s economy. It is best suited for the shipment of heavy goods overseas and occurs in both small water bodies and international waters. All the trades occurring through any water body are referred to as Maritime trade. Maritime trade covers around 80% of the world economy. Due to its crucial role in commerce, maritime trade is the center of smuggling, terrorism, trafficking, and piracy.

Maritime Trade

Maritime Trade

Maritime trade refers to that type of trade that includes the usage of ships for the transportation of goods over a distance by sea. Because of the danger which is involved in this form of transportation, agreements are related to this kind of trade with several unique forms of rules that have been developed since ancient times which include regulations and certain customs.

Monitoring of ships 

Maritime trade has equipped a major position in global imports and exports. An increase in trade volume has benefited the economy but heavy shipment can also be used for criminal purposes. The legal framework is developed by the International Maritime Organization (IMO) to prevent these illegal trafficking activities without disturbing the flow of shipping procedures.

Human trafficking, weapon dealing, drug trafficking, smuggling, money laundering, and terrorism are criminal activities occurring during the shipment. The main objective of ship monitoring is to prevent all criminal activities.

Monitoring of ships is necessary to prevent crime and protect citizens, protect the asset and ensure safe delivery at their destination, and prevent trade-related money laundering cases. Advanced technologies like artificial intelligence are used to collect data from ships. It looks for any suspicious activities and investigates whether a ship is safe to use or not. The safety of ships depends on various factors – registry of ships on open registers, routes, and ports applied by the ships, financial institutions, and governments included in the trade.

Maritime trade is an important component of the growth of developing nations. Trade contributes a major part to sustaining the economy of a country and improving it. The produced goods are transported from manufacturers in Asia and Africa to European countries and America. It is the most cost-effective and convenient way to trade but the illicit activities are a threat to cargo shipment. Among the 226 million containers hidden are contrabands, fake goods, drugs, and weapons. Monitoring ships helps in tracking the illegal activities related to shipment and helps both the importers and shippers. Monitoring helps to identify and eliminate risky ships making it difficult for illegal activities to succeed. 

Roles of Maritime Trade

The different roles involved in Maritime shipping are:

• Shippers: These are the enterprises that initialize the trade. Transportation of commodities is carried out from one nation to another according to these organizations. They are responsible for trading the cargo and are in charge of the shipment.
• Carriers: The ships and individuals involved in the shipment of goods are referred to as carriers. All the onboard personnel who assist with the shipment and the machinery used in the process falls under carriers. These are the frontline workers whose duty is to complete the task assigned to them during the shipment. 
• Sourcing Agents: The agents that provide appropriate carriers to shippers are the sourcing agents. These agents are associated with the proper functioning and maintenance of trade practices. 
• Freight Forwarders: The individuals or company who looks through the documentation and formalities. All the paperwork is done by these agencies and further, coordinate the movement.
• Government Bodies: These are the official authority that monitors shipping and ensure that all the national laws are followed. Prevention of any irregular activities and dealing with criminal offenses are the prime duties of government bodies.

Related Links

1. International Trade
2. Introduction to Internal Trade

FAQs on Maritime Trade

Q 1. What are the advantages of Maritime Trade?

Answer-

Maritime trade is in use from many centuries due to the following reasons:

1. Bulky and Oversized goods can be transported at a time between the countries, without any extra cost or arrangements.
2. As compared to other transportation system, for long distance travel ships offer more convenient and cost effective options to shippers.
3. Travel routes are fixed and repeatedly used which reduces the risks of dangers while transportation. It is more safe as compared to other shipping methods.
4. Eco-friendly and causes less pollution.

 Q 2. What is the significance of Maritime Trade?

Answer-

Due to the growth of population there is a rising need of large quantities to be transported within a short amount of time, as a result Maritime Trade has occupied an irreplaceable place in transportation industry. Because of its cost-effectiveness, maritime trade has become the best alternative for shipment of heavy and bulky goods. It plays a significant role in developing the global trade and boost global economy. Jobs and livelihood of many people depends on it. 

Q 3. How are Ships in Maritime Trade Monitored?

Answer-

Few decades ago before modernization the monitoring of ship was very difficult as it was done using manual processes, in recent times Advanced technology is used for tracking and recording the activities of shipment. Highly automated system are used for the same. Advanced Identification System (AIS) is a automated system that provide ship’s current location, id number and other ship data. The collected data allows shippers to take appropriate decision based on risk involved.