Category Archives: World Trade

As the global economy grows, world trade and the shipping industry will play a vital role in the recovery of nations and international trade around the world.

shipping container contributed to globalization

Rising Global GDP Leads to Increase in Demand for Containers

With most exports of manufactured consumer goods, such as electronics, furniture and garments, being transported around the world in cargo containers; leading companies like Alibaba and Amazon are breaking-down barriers to international trade and commerce. In doing so, the need for worldwide maritime logistics has become increasingly important to them, and the global economy.

The rising demand for shipping services has companies focused on efficient capacity for maritime logistics. It goes without saying that if world economic growth increases in 2015, then it can be expected that containerized trade growth should increase next year (2016), as well.

At the moment, more than 95 percent of the United States’ import-export shipboard cargo is transported in shipping containers. According to the U.S. Department of Homeland Security, there are more than 108 million containers worldwide and it is estimated that there are approximately 200 million “shipboard trips” to international seaports; annually.

On the global scale, the Wall Street Journal report that China’s container ports have registered their biggest gains in port-handling volumes, as a result of America’s economic growth and European economic recovery; in 2014. After analyzing the last month of Q3 2014, the Wall Street Journal discovered and reported that:

The traffic at Chinese coastal container ports, which number more than a dozen, grew 6% in September. The figures showed exports rising 15.3 percent in September from a year earlier, exceeding August’s 9.4 percent growth. These results were also higher than the median forecast of 12.5 percent by The Wall Street Journal’s poll of 15 economists. China’s imports in September rose 7 percent from a year earlier, rebounding from a 2.4 percent decline in August, according to data from the General Administration of Customs.

While global shipping has started to rebound, this should do well for container investing, manufacturing and the global economy. According to Alphaliner, the global supply for containers is projected to increase to nearly 225 million TEU by the end of 2016.

Combining all individual economies worldwide, global gross domestic product (GDP) is a key indicator for the global economy. And, according to industry analysts, an increase in global GDP will lead to a rise in container demand and make shipping containers an even more appealing investment.

An increase in global GDP leads to container demand growth by two or three times.- Helane Becker, Analyst

When looking at the gross domestic product of selected global regions, it is obvious that GDP is highest in industrialized countries.

maersk line container shipping

Maersk Line – The Largest Company In The Shipping Industry

maersk line container shippingWith an annual revenue of $20 billion to $30 billion, over 25,000 employees worldwide, and widely regarded as the most important component of the global conglomerate AP Moller-Maersk Group, Maersk Line is the largest and most influential container shipping line in the world. How and when did become a container shipping empire? What kind of fleet does Maersk Line operate with? How have they effectively achieved economies of scale and still stay sustainable? It is my intention to address all of these key questions in this article, with a primary focus on the history of the Denmark-based company.

Founded in 1928, Maersk Line was created by A.P. Moller. Once the company was established in 1928, A.P. Moller acquired the Danish company’s first five tankers that same year. He also oversaw the company’s expansion abroad, starting in the United States in 1919, and continuing with the establishment of offices in Japan, the United Kingdom, Thailand, Hong Kong and Indonesia. To enhance the company’s portfolio, Moller established a number of other businesses in the shipbuilding, agriculture and retail sectors and in 1962, he was awarded a concession to explore for and extract raw materials beneath Danish-controlled waters, which was an activity that eventually led to the formation of today’s Maersk Oil. Furthermore, A.P. Moller secured his family’s continued ownership of the company he built when he established the foundations that now control the majority of shares in the Maersk Group. When Moller passed away in 1965, his son Maersk Mc-Kinney Moller assumed chairmanship of the family’s foundations.

Since then, Maersk Line has quickly become the dominant force in the shipping industry, owning a significant percentage of the global market share. As of July 2011, Maersk Line’s container ship fleet comprises more than 600 vessels and a number of containers corresponding to more than 3.8 million TEU. In 2011, Maersk ordered 20 mega-sized container ships from Daewoo, each with a capacity of 18,000 containers. The first of these Triple E Class shipping vessels was delivered in June 2013 and was christened with the name Maersk Mc-Kinney Moller, after the founder of the Maersk Line.

The economies of scale offered by Maersk Line’s 18,000 TEU vessels are so significant that few can ignore them. If the Triple E’s consume 164 tonnes of fuel a day, the estimated IFO bunker cost of the Maersk Mc-Kinney Moller (18,270 TEU) would already be 35 percent lower than a typical 13,100 TEU vessel on a per TEU carried basis, which equates to $218 per TEU versus $333 per TEU. Apart from the fact that the ships are bigger, their hulls are reported to be designed around an average ship speed of only 23 knots, compared to over 24 knots for the first 13,000 TEU vessels, enabling them to glide through the water much more efficiently, thereby reducing operating costs and increasing profits for the largest company in the global shipping industry.