INTERNATIONAL SHIPPING BUSINESS

INTERNATIONAL SHIPPING BUSINESSMRI 2304fb: Elly Ilyani Lecturer1WHAT IS INTERNATIONAL BUSINESS?International business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, individuals companies, group of companies or government agencies and organizations.fb: Elly Ilyani Lecturer2KEY ECONOMIC AND BUSINESS TERMS IN BRIEFfb: Elly Ilyani Lecturer3

THE GLOBALIZATION OF THE WORLD ECONOMY

fb: Elly Ilyani Lecturer4Free Flow Of GoodsThe result of the treaty known as the General Agreement on Tariffs and Trade (GATT)

The Uruguay Rounds (rounds of negotiation) of member states formed after WW ll further reduced trade barriers and established the World Trade Organization

The decreased then enabled firms to view the world as their market

Also enable firms to base individual production activities at the optimal location for that activity while serving the world market from that locationfb: Elly Ilyani Lecturer5Development Of Communication Information And TransportationDevelopment of the microprocessors has enabled the growth of high powered, low-cost computers

Global communication have also been enhanced by developments of satellite, optical fibre, wireless technology and now the internet and World Wide Web

Negotiation can also be conducted via video conferencing. Money and all documents required can be transmitted over the web

Also development in the transportation technology. commercial jet aircraft, super freighters and containerization that have simplified greatly shipment of cargoes of products worldwidefb: Elly Ilyani Lecturer6Cik Ros Ilyani Binti RosdiWhat is shipping?fb: Elly Ilyani Lecturer7What is shipping management?Shipping management means providing a complete range of integrated marine services required by the clients for managing their vessels. Integrated Marine ServicesCommercial ManagementTechnical Ship ManagementCrew ManagementPort and Terminal ManagementNaval Architecture and Marine EngineeringBunker Services

Shipping And Climate Change

The growth of the global merchant fleet according to type of vesselfb: Elly Ilyani Lecturer10Shipping And Climate ChangeOf all modes of transportation, ships are unbeatable in terms of efficiency.

fb: Elly Ilyani Lecturer11MODERN SHIPS - Large, Fast And Highly SpecializedMarine innovations are:

fb: Elly Ilyani Lecturer12General Cargo ShipsA shipping specialists. A large proportion of the goods they transport are awkwardly-shaped and bulky, and do not fit into standard containers. Their cargo includes heavy goods and project cargo for major building projects such as power stations, offshore installations and mining. Some pieces of cargo weigh more than 1000 tonnes.

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Cargo Vessel/ShipOil TankerThe capacity of the global oil tanker fleet is hugeThis makes oil tankers the most important cargo ships in the global fleet next to bulk carriers. Interestingly pollution from tanker accidents has reduced considerably in past decades, despite the increased volumes of oil transported. This can mainly be traced back to improvements in shipping technology.

fb: Elly Ilyani Lecturer15Oil Tankers

Cruise LinerThe total capacity of passenger ships and cruise ships, accounting for only one per cent of the global fleet, is relatively small. Nonetheless the sector is booming and has become a lucrative and growing business for tour companies. Despite the economic crisis the major shipyards are continuing to build bigger and increasingly elaborate ships.

fb: Elly Ilyani Lecturer17Bulk CarriersBulk carriers, like oil tankers (huge capacity)These ships transport goods such as ores, coal and cereals. The principal routes for ore shipments are from South America to Europe and Japan as well as from Australia to Japan. The major shipping routes for coal are from the major exporters of Australia and South Africa to Western Europe and Japan.

fb: Elly Ilyani Lecturer18Container ShipThe container shipping industry has grown considerably in importance over past decades.Standard container sizes have led to significant savings of time spent on unloading and transferring cargo to trucks and rail. In terms of capacity per ship, container ships left general cargo ships behind long ago.

fb: Elly Ilyani Lecturer19Container Vessel/Ship

A cargo is instructed to carry containers for 20 or 40 footers, and the delivery involved is part of International Business

fb: Elly Ilyani Lecturer21WHAT SHIPS CARRY?Oil, Containers, and Dry Cargofb: Elly Ilyani Lecturer22Advantages of shippingShipping is the most efficient, secure and safe means of transporting more than 90 percent of global trade.

For vast majority of cargoes like fuel, food, component parts, commodities and finished goods there is simply no viable alternative other than shipping.

Shipping is the least environmentally damaging form of commercial transport while taking into consideration the productive value of the activity.

Any form of transport other than shipping to move some 90 percent of global trade would be unthinkably high while taking into consideration both the economic and environmental costs.

Shipping is a very positive force for sustainable development. The imports and exports that generate global trade are all carried by sea and developing countries like Bangladesh can, and do, become major participants in the industry itself, generating income and creating wealth in the process.

Advantages of shippingDisadvantages of shippingShips can create serious environmental issues such as oil pollution or marine pollution either through accidents or poor operating practices by dumping wastes at sea or using harmful paints or coatings on ships hulls.

Even though ships produce less CO2 emissions compared to airfreight or other transports, still regulations and capacity-building measures need to be developed and implemented to reduce the emission. Otherwise shipping might pose threats to the global environment.

Leakages of oil, noxious liquid substances or garbage thrown to the sea water might become a threat to several aquatic life forms if not properly regulated.THE KEY SHIPPING ROUTESThere is a relatively small number of principal transport routes: fb: Elly Ilyani Lecturer26THE KEY SHIPPING ROUTES Bottlenecks

Straits of Dover, Gibraltar, Malacca, Lombok and Hormuz, and the Cape of Good Hope at the southern tip of Africa.

Traffic builds up in these areas, making ships vulnerable to attack by pirates.

fb: Elly Ilyani Lecturer27Implications For The Globalization Of Production And MarketsTechnological innovations had made possible for firms to manage a globally dispersed production system

Communication technologies have enabled Hewlett Packard to increase integration of its globally dispersed operations and to reduce the time needed for developing new products

Internet and WWW has created global electronic market places for diverse products

Transportation technologies has reduced the cultural distance between countries and has brought about the converge of consumer taste and preferences

At the same time, global communication and global media are creating a worldwide culturefb: Elly Ilyani Lecturer28ConclusionShipping has begun a new revolution from the late 16th century. At the beginning people used to deliver goods by roads, using horse carts or trailers pulled by tractors. Then gradually people started building ships/vessels for transporting goods across the world and later on built airplanes. Now shipping has become a very positive force making a major contribution to global prosperity in a way that has relatively small negative impact on the global environment while comparing to other forms of transportation of global trade. The imports and exports that generate global trade are all carried by sea and even the poor and rich countries can benefit from seaborne trade by generating income and creating wealth in the process.QUESTIONDefines International Business and describe why it is important to learn?Describe what makes sea shipping is the safest shipping mode?State two (2) reasons why shipping is a global business today?Describe briefly three (3) characteristics of international shipping.fb: Elly Ilyani Lecturer30