By Lisa Otto
South Africa became involved as a counter-piracy actor rather late in the day, after repeated calls for it to make a contribution to the scourge that was then facing the continent – Somali piracy. Despite the rise of the Somali pirate problem coming in 2007, it was not until the outward ‘ballooning’ effect of the pirates’ reach began to extend southwards towards the Mozambican Channel, that South Africa’s interest was suitably piqued.
In December 2010 Somali pirates struck off Mozambique’s coast, and the South African Department of Defence responded to this attack on its immediate neighbour by deploying warships to Mozambique. This effort was known as Operation Copper and constituted the very beginning of South Africa’s engagement in counter-piracy efforts beyond endeavours of verbal condemnation.
Not acting on its own recognisance, but rather generously acquiescing to Mozambique’s request for assistance, piracy was suddenly thrust from the periphery of South Africa’s international agenda to a more central position than it previously enjoyed. Albeit one that did yet not necessarily beget much strategic priority.
In February 2012, South Africa’s engagement in counter-piracy became formalised through a Memorandum of Understanding signed in partnership with Mozambique and Tanzania, under the auspices of the Southern African Development Community (SADC). Subsequently the countries have seen some success, notably in April 2012 when the partnership was put to use to fend off a pirate attack in Tanzanian waters, in collaboration with the European Union (EU) deployment.
Beyond this, Operation Copper has also worked at training efforts as a capacity-building mechanism with neighbouring countries. More recently, South Africa has begun to focus its attentions the Gulf of Guinea also, with the navy being active there in the last two years.
At the time of South Africa’s entrance as an actor in the counter piracy environment, maritime piracy in Somalia had been a problem of global concern for some years. By 2011 this experience had led to a number of experts alluding to the emergence of a new hotspot for Somali pirates in Southern African waters. Given pirates’ dynamic nature and ability to adapt to the challenges they faced, the presence of international forces in the Gulf of Aden would force pirates further south in pursuance of their victims. The trend known as ballooning saw Somali pirates venture far afield.
It was this thinking that underpinned a theory that Southern Africa would soon face dealing with the pirate scourge. This notion, coupled with the need for security in the maritime domain in light of resource discoveries off the coast of Tanzania and Mozambique as well as the active ports at Dar es Salaam, Beira and Maputo seemed to necessitate action. This, along with the successful pirate attacks in Mozambican waters in 2010, the threat must have seemed quite real to South Africa, and potentially also posed a risk to its interests off Southern Africa’s eastern coastline.
Yet, the Somali pirate scourge dwindled significantly in 2012 and 2013 as a number of activities and developments both on land and at sea paid off. Beyond this, Somali pirates have not managed to sustain their campaign further into the Indian Ocean, and ultimately southwards, given logistical challenges. The absence of a safe haven outside Somalia, as well as having to go without the intricate support network in Somalia that provide the very foundations for their activities worsens matters. Establishing new such networks (which would require an environment devoid of effective governance comparable to the erstwhile Somalia) is a task more difficult in the Southern African region given its comparative condition of peace and security. Another option would be the use of a mother ship based in international waters, but this too would require access to a regular supply of food, water, fuel and other items, usually provided by on-shore networks contracted by pirate groups.
Given this and the limited defence budget in South Africa, it may seem curious that the country committed of its limited naval assets to these endeavours. In fact, the allocation to Operation Copper alone in the 2013 budget was R585 million (US$56 million) from a total annual budget of R40 billion (or US$3.9 billion).
Says defence analyst Helmoed Heitman, “either South Africa accepts regional security responsibilities and funds an appropriate defence force, or we wind our neck in, keep quiet and hope nothing goes wrong”. He posits that despite the role of a defence force being to address threats, the budget leaves no room for this, nor for the unexpected. Thus, one might conclude that the expenditure on counter-piracy operations is a frivolous expense, given the state’s primary responsibility of protecting its territory – a place to which pirates have yet to venture. Others may argue that the fact that pirates have not entered South African waters is credit to the capabilities of the navy.
On the balance of this information, how pragmatic is South Africa’s engagement in counter-piracy? Is it a worthy exercise in foreign policy, employing foresight, or does it constitute funds misspent on threat not immediately real to South Africa?
While Heitman makes apt observations with respect to the military budget, it is worth noting that South Africa’s security apparatus are most often deployed in assistance of other nations, often in Africa. South Africa does not fear any immediate threat to its territory, and is therefore able to make use of its defence forces as a tool in the furtherance of its foreign policy objectives, key amongst which is the precedence of Africa.
The fear of pirates’ southward migration offered Pretoria the opportunity to participate through its region in keeping with the country’s foreign policy and the practice of engaging the region as a first port of call. A SADC-based initiative would also be consistent with the African Agenda and the ideal of ensuring that the collective security of the Southern African neighbourhood is safeguarded. These considerations serve to motivate the pursuance of the issue in a way that befits South Africa’s model of foreign policy quite perfectly.
Counter-piracy activities have also allowed South Africa to push back at pirate frontiers farther away from home, effectively assisting neighbours through collaborative efforts, all the while, keeping the trouble at a safe distance from South Africa’s doorstep. This may be considered a pragmatic policy decision – indeed, South Africa is a littoral state with 3,751km of coast line, dotted along which sit a number of crucially important ports with significance not just for South African but for the region as a whole.
Given South Africa’s status as an emerging nation, it also has globalised interests, being impacted by costs brought on by piracy on the global economy, as well as the domestic concerns felt by neighbours. Furthermore, it acts to bolster South Africa’s perceived involvement in a fashionable issue of international proportions, without requiring all too much effort on the part of Pretoria. This too falls squarely in line with South Africa’s implied foreign policy objective of being the foremost African actor participating in the international space – the go-to partner on the continent who leads by example where issues of African security are concerned.
In conclusion, while the cost of South Africa’s counter-piracy engagement may, on the face of it, not appear to equal its benefit, South Africa has managed to structure this engagement in a way that plays to the global image that it works to portray, while expending relatively little resources. From a practical point of view the cost does not seem to meet the minimal realities of its risk, but perhaps in this instance South Africa has made its play on the basis of strategy rather than economics.
Is it necessary for its own security to be actively fighting the pirate threat? No, it is not. But, given the transnational nature of the crime, and nondiscriminatory nature of its effects, it is of crucial importance that states, littoral and landlocked become involved, acknowledge a shared responsibility and tackle the crime as a collective. Experts have long held that a coordinated effort by the international community is needed to turn the tide in the fight against piracy. This is South Africa’s effort to do just that – in this case a responsible global actor, but primarily one taking a path of pragmatic foreign policy.
A version of this article was first published in the African Armed Forces Journal in November 2014 as a winning entry of the AAFJ Denel writing competition, and the full version may be accessed there.
Robots and autonomous underwater vehicles are playing an increasing role in commercial maritime and offshore oil and gas operations for such things as oil and gas exploration, subsea work, repairs and maintenance, and hull inspections. The future will usher in an expanded role for robots and unmanned vehicles. DNV GL, for example, recently unveiled a concept vessel for short sea shipping called the ReVolt that is fully battery powered and unmanned.
The NATO Centre for Maritime Research and Experimentation (CMRE), part of the NATO Science and Technology Organization, recently held sea trials that successfully tested and demonstrated the integration of robotic platforms, including Unmanned Surface Vehicles and Unmanned Aerial Systems for Search and Rescue (SAR) operations. The sea trials, from October 13 to 24, were held as part of ICARUS (Integrated Components for Assisted Rescue and Unmanned Search operations) project, which is funded by the European Commission under the Seventh Framework Programme for Research and Innovation (FP7).
Since 2012, ICARUS has been developing advanced robotic platforms that can support crisis intervention teams in detecting, locating and rescuing humans in danger, in maritime and land disaster scenarios.
Unmanned Search and Rescue (SAR) devices offer a valuable tool for saving lives and for speeding SAR operations.
This is crucial for maritime incidents where survival times are short and SAR teams can be exposed to considerable risks.
For such events, Unmanned Surface Vehicles (USVs), capable of transporting SAR equipment and deploying first aid devices, can greatly improve the efficiency of operations.
Existing technologies have been improved to strengthen resilience, and new developments include robotic vehicles that can deploy autonomous life saving capsules, using mission planning software, new sensors and new data acquisition capabilities to detect and track survivors.
Experts in maritime robotics and target recognition, CMRE is collaborating with the Laboratory of Microgrids and Electric Vehicles, Portugal, in the framework of ICARUS to enhance the autonomy of robotic surface vehicles and is also involved in the integration of the main USV into the ICARUS Command, Control and Interface (C2I) station collaborative operations with aerial robots.
The ICARUS project is managed by a consortium of 24 public and private partners from 10 countries.
One of the central objectives of the project is to bridge the gap between robotic laboratories and the application of novel robotic devices to real-life situations in the field, paving the way for cutting-edge technologies to be used in Search and Rescue operations.
In 2015, the technologies developed during the ICARUS project will be tested in two scenarios, one a simulated earthquake exercise in Belgium and the other a maritime accident in Portugal.
Source – www.marinelog.com
Industry stakeholders and government officials from various countries met in London on 23 and 24 September to discuss maritime piracy in in West Africa under an inative organised by the America-based Oceans Beyond Piracy. With piratical act in the Gulf of Guinea rendering these waters some of the most dangerous in the world, threatening economic and security imperatives in the region of geostratefic importance; this issue was the focus of the discussion.
Following the meetings, in a conversation with one government official in attendance, the question of defining piracy was raised and the wide range of definitions varying in scope were highlighted. It was, however, decided that these interpretations had sufficient commonality for any fine -tuning to be set aside.
This, in my opinion, is an oversight and one that challenges how the problem may be approached. To provide background here, it is worth noting how piracy is defined, and why events in West Africa occur on the periphery of this definition.
International law under Article 101 of the United Nations Law of the Sea of 1982 holds that piracy is any violence, detention or depredation that take place on the high seas, is perpetrated for private gain, and gain, and occurs between at least two vessels. Much of this definition is based on law used to combat piracy during the so -called golden age in the 17th and 18th centuries, as well as an interpretation emanating for the Harvard Draft, compiled by academics in 1932.
In West Africa acts of piracy predominately take place in territorial waters, and have been perpetrated for motives that enmesh private gain, through organised criminal activity, with political grounds and forms of protest. On this basis, and unless expressly defined as piracy under the domestic law of the country in whose waters these acts take place, the internationally accepted definition can really not be applied here. In short, the use of the word piracy to describe these acts is mostly inaccurate and constitutes a misnomer. Nonetheless, scholars, government institutions, oil majors and shipping companies tend to refer to acts of robbery- at – sea and associated crimes as piracy, often for ease of reference.
While this approach make the phenomenon perhaps easier to categorize, what it fails to acknowledge is that the acts in West African waters present distinct model of piracy, which, although having similarities to other manifestations of the phenomenon, presents itself in a unique way. Of course, the word that we used to describe things are of utmost importance because they inform the way in which we understand them, and also often attach automatic assumptions and expectations. The key to being able to address piracy successfully is then in understanding differences within the phenomenon and appreciating the idiosyncrasies at play in various maritime domains.
Questions of piracy are further complicated by a dearth of domestic legislation in affected West African countries, which stems from sea-blindness- the failure to appreciate the sea as a political and economic domain that requires securitising. Not only does a legal framework often not exist under which prosecutions can take place, the lack of such framework underscore a shortfall in understanding amongst the various officials whose job it now becomes to tackle maritime insecurity in the Gulf of Guinea. Moreover, the international definition is this also inadequate to serve as guidance for these countries in building their own understanding and addressing piratical acts in their territorial waters.
As this is a problem that is affecting numerous countries within the Gulf in Guinea sub- region (although mainly emanating from Nigeria), states are also likely to take different routes to solving this definitional problem when attempting to construct framework for countering piracy . While there is a regional appetite for cooperation amongst states, this may in itself present a stumbling block in what routes regional platforms may have for their collective security.
There is an impression that due to the difficult nature of the task of fine- tuning definitions to be more inclusive of various manifestations of piracy, alongside the struggle in achieving consensus, it is considered too onerous a task, and one for which attendees at these September meetings simply did not have the enthusiasm.
The question of definition may seem a minor element of the issue at hand and consideration of being clearer on the words we use may be considered trivial, but is it important that there at least be some attempt at getting these basics right – once an understanding on what the problem, and could present an opportunity for streamlining of definition and method, bolstering a coppertative approach, which will go a long way towards achieving a shared vision on immediate and long- term actions to be taken.
Hosted by Lisa Otto
Lisa Otto holds a MA in International Peace and Security from King’s College London’s War Studies Department, which she achieved with Distinction, as well as BA and BA Honours degrees from the University of Johannesburg. She is now pursuing doctoral studies in Politics under the auspices of the SARChI Chair in African Diplomacy. and is currently conducting visiting research at the GMI. Her doctoral study investigates the evolution of maritime piracy in Nigeria.
Lisa’s research interests include non-traditional threats to security, particularly in Africa, as well as African foreign policy and engagement at the regional and international levels. Before returning to UJ to begin her doctorate, Lisa worked with the Institute for Security Studies and the South African Institute of International Affairs. She has also worked on projects with Transparency International, the African Union, Corruption Watch, and the European Commission, and has conducted field research in Finland, South Africa, Kenya, Mozambique and Ethiopia.
Nigeria and Piracy: the Evolution of a Complex Problem
While piracy is certainly not a new predicament off West Africa’s coast, it is one that has certainly become more punctuated in recent years, particularly off the shores of Nigeria. Piracy there challenges our traditional understanding of the crime, taking on a more domestic nature, and one that tends to centre on the region’s thriving oil industry. It is with the legacy of this industry too that it finds its origins, which, enmeshed with defining features of the Nigerian state (corruption, neo-patrimonialism, poverty, and criminality), has come to pose a significant threat to economic and security imperatives in Nigeria and the sub-region. Actors tasked with tackling the phenomenon have been implicated in the crime itself, rendering it an exceedingly complex problem to solve. This presentation will unpack the nature of piracy in Nigeria (and by extension West Africa), offering insight into underlying causal factors of the crime, how it plays out on these troubled waters, and what efforts are being taken to bring it to an end.
For more information on getting to the venue click here
The twenty-second New Researchers in Maritime History Conference will be hosted by the University
of Greenwich in the historic Old Royal Naval College. The conference provides a unique opportunity
for emerging scholars to present their work to a supportive audience in one of the world’s most
iconic maritime settings.
Applications to present will be accepted from both research degree students and by independent
scholars. The organisers welcome contributions that address all aspects of maritime history.
Anyone interested in attending the conference without presenting a paper is warmly invited to register via our booking site . http://newresearchersmaritimehistory2015.eventbrite.co.uk
The registration fee includes a welcome reception including keynote address on the Friday evening;
lunch and refreshments throughout the day on the Saturday plus conference materials.
£35 standard fee; £30 student fee; presenters attend for free.
Contact the conference secretariat at: +44 (0)20 8331 7612 or firstname.lastname@example.org
The world’s largest cruise ship arrived in the UK today for the first time.
The £800m Oasis Of The Seas sailed into Southampton at 10am on Wednesday in dense fog, welcomed by a crowd of hundreds and helicopters circling overhead.
Weighing 225,282 tonnes, the 1,187ft ship is longer than London’s The Shard is tall, and at 208ft wide, larger than the wingspan of a Boeing 747.
Spread across its 16 decks is an outdoor park with more than 12,000 real plants and trees, an 82-foot long zip wire, and the largest pool on the seas.
There is also a 750-seater arena, ice rink, surf machines, a high-diving performance venue and an elevating bar.
Some other interesting facts :
but how big can these vessels get.
Already in Venice we have seen the government ban the docking of these large vessels whilst they investigate the environmental impact on the city.
Overall, the cruise ships oceanic produce at least 17% of the total emissions of nitrogen oxides, contributing to more than a quarter of total emissions of nitrogen oxides in port cities and coastal areas.
In addition, waste from cruise ships adversely affect the resilience of marine ecosystems, destroying coral reefs (Source: “Climate Change Adaptation and Mitigation in the Tourism Sector: Frameworks, Tools and Practices” by United Nations Environment Program, together with the University of Oxford, p.102)
If you ever choose to embark on one of these marine giants, you must know that your CO2 emissions can be up to 1000 times more than a train journey. (Source: “Climate Change and Tourism. Responding to global challenges’, World Tourism Organization and United Nations Environment Programme, 2008, pp.. 37, 134)
Thursday 20 November 2014
HQS Wellington, Temple Stairs, Victoria Embankment, London WC2R 2PN
The Blue Economy – the extensive interdependent range of economic activities that depend on the sea – offers huge potential for sustainable economic growth. This has been identified in the EC ‘Blue Growth’ strategy, with an emphasis on marine knowledge, spatial planning and integrated maritime surveillance. In January 2014 the Commission launched Horizon 2020, the EU’s largest ever research and innovation programme. Within the UK, current government initiatives to promote marine and maritime growth include the Marine Industries Leadership Council with representatives from the main sectors. Indications of rising international awareness of the importance of blue growth, include the action agenda for the Global Oceans Commission (2013-), the activities of the Global Forum on Oceans, Coasts and Islands (2002-), and the five-day Global Oceans Action Summit for Food Security and Blue Growth (The Hague, April 2014).
Taking as a starting point the three elements of the EC Blue Growth strategy, the Blue Economy symposium will examine these in relation to future UK opportunities in marine/maritime exploration, exploitation, energy and enterprise. What are the gaps in marine knowledge, spatial planning requirements and surveillance capacity that UK technology and skill can fill? What is needed to ensure that public policy and private interests combine to benefit the UK’s Blue Economy?
Coffee and Registration
Welcome and Introduction
Professor Sarah Palmer, Chair of Greenwich Forum
|Keynote Address: Simon Reddy, Global Ocean Commission
|Theme 1: Exploration
Professor Ed Hill, National Oceanography Centre
Koen Verbruggen, Geological Survey Ireland
Robert Ward, International Hydrographic Organisation
|Theme 2: Exploitation
Dr Philomène Verlaan, IMarEST
John Breslin, Smartbay Ireland
Dr Adrian Glover, Natural History Museum TBC
|Theme 3: Energy
Michael Cowling, Crown Estate
Martin Wright, Aurora Ventures Ltd.
Oil and Gas UK TBC
|Theme 4: Enterprise
Gregory Darling, Gardline/Marine Industries Leadership Council
Martin Hampson, Satellite Applications Catapult
|Keynote Address: The Rt Hon Matthew Hancock, Minister of State for Business and Enterprise
|Concluding Comments and Drinks Reception
End of Event
to book a place click here
The world’s cargo ships are getting big, really big. No surprise, perhaps, given the volume of goods produced in Asia and consumed in Europe and the US. But are these giant symbols of the world’s trade imbalance growing beyond all reason?
What is blue, a quarter of a mile long, and taller than London’s Olympic stadium?
The answer – this year’s new class of container ship, the Triple E. When it goes into service this June, it will be the largest vessel ploughing the sea.Each will contain as much steel as eight Eiffel Towers and have a capacity equivalent to 18,000 20-foot containers (TEU).If those containers were placed in Times Square in New York, they would rise above billboards, streetlights and some buildings.Or, to put it another way, they would fill more than 30 trains, each a mile long and stacked two containers high. Inside those containers, you could fit 36,000 cars or 863 million tins of baked beans.
he Triple E will not be the largest ship ever built. That accolade goes to an “ultra-large crude carrier” (ULCC) built in the 1970s, but all supertankers more than 400m (440 yards) long were scrapped years ago, some after less than a decade of service. Only a couple of shorter ULCCs are still in use. But giant container ships are still being built in large numbers – and they are still growing.
It’s 25 years since the biggest became too wide for the Panama Canal. These first “post-Panamax” ships, carrying 4,300 TEU, had roughly quarter of the capacity of the current record holder – the 16,020 TEU Marco Polo, launched in November by CMA CGM.
In the shipping industry there is already talk of a class of ship that would run aground in the Suez canal, but would just pass through another bottleneck of international trade – the Strait of Malacca, between Malaysia and Indonesia. The “Malaccamax” would carry 30,000 containers.
The current crop of ultra-large container vessels can navigate the Suez – just – but they are only able to dock at a handful of the world’s ports. No American harbour is equipped to handle them.
The sole purpose of the soon-to-be-launched Triple E ships will be to run what’s called a pendulum service for Maersk – the largest shipping company in the world – between Asia and Europe.
They arrive in Europe full, and when they leave a significant proportion of containers carry nothing but air. (At any given moment about 20% of all containers on the world’s seas are empty.)
“Ships have been getting bigger for many years,” says Paul Davey from Hutchison Ports, which operates Felixstowe in the UK, one of the likely ports of call of the Triple E.
“The challenge for ports is to invest ahead of the shipping capacity coming on-stream, and to try and be one step ahead of the game.”
Overcapacity in the world’s ports means there is huge competition for business. Operators cannot afford to get left behind, says Marc Levinson, author of The Box – How the Shipping Container Made the World Smaller and the World Economy Bigger.
“The ports are placed in a difficult competitive position here because the carriers are basically saying to them, ‘If you don’t expand – if you don’t build new wharves and deepen the harbours and get high speed cranes, we’ll take our business someplace else.'”
These big beasts of the sea present ports with other challenges too.
Ship owners also want vessels to be unloaded and loaded within 24 hours, which has various knock-on effects. More space is needed to store the containers in the harbour, and onward connections by road, rail and ship need to be strengthened to cope with the huge surge in traffic.
Felixstowe, which handles 42% of the UK’s container trade, has 58 train movements a day, but plans to double that after it opens a third rail terminal later this year.
Bigger vessels also behave differently in the water. The wash created by a large ship can be enough to cause other ships moored in a harbour to break free – just as the passenger liner SS City of New York did in 1912 when the Titanic set out on her maiden voyage.
“These days with the increase in traffic, we experience this more and more often,” says Marco Pluijm, a port engineer working for Bechtel. “A simple thing you can do is just slow ships down and add some tug boats for better manoeuvring – but that all has cost implications.”
There are currently 163 ships on the world’s seas with a capacity over 10,000 TEU – but 120 more are on order, including Maersk’s fleet of 20 Triple Es.
Bearing in mind that the carbon footprint of international shipping is roughly equivalent to that of aviation – some 2.7% of the world’s man-made CO2 emissions in the year 2000, according to the International Maritime Organization – the prospect of these leviathans carving up the oceans in ever greater numbers is likely to be a source of concern for green consumers.
Maersk, however, argues that the Triple E is the most environmentally friendly container ship yet. (The three Es in the name stand for economy of scale, energy efficiency and environmentally improved.)
Although it will only be three metres longer and three metres wider than the 15,500-TEU Emma Maersk, its squarer profile allows it to carry 16% more cargo.
Re-designed engines, an improved waste-heat recovery system, and a speed cap at 23 knots – down from 25 – will produce 50% less carbon dioxide per container shipped than average on the Asia-Europe route, Maersk calculates.
“When you get bigger ships, you can more efficiently carry more cargo, so the carbon footprint you get per tonne of cargo is smaller,” says Unni Einemo from the online trade publication Sustainable Shipping. “So on that basis, big is beautiful.”
To achieve maximum fuel efficiency, however, a ship has to be fully loaded.
“They are massive ships, and a really big ship running half-full is probably less energy-efficient overall than a smaller ship running with a full set of containers,” says Einemo.
Maersk’s Triple Es will be going into service at a time when growth in the volume of goods to be shipped is comparatively low – some experts don’t expect it to pick up until 2015. But the world’s container fleet capacity is expected to grow by 9.5% this year alone, as Maersk and others receive the ships they ordered years ago.
Some of the extra capacity will be absorbed in the new practice of slow steaming – industry-speak for sailing more slowly. Sailing at 12-15 knots instead of 20-24 knots brings enormous savings on fuel – but it does mean that extra ships are required to transport the same volume of goods in the same timescale.
Maersk are counting on container trade continuing to grow at 5-6% – less than half the growth rate of seven years ago, but enough to recoup the company’s investment in the Triple Es, which cost $190m (£123m) each.
“The history of container shipping involves ship lines taking huge gambles,” says Marc Levinson, who points to a trend for some American and European companies to move manufacturing back from Asia.
“There are a lot of people in the shipping industry who aren’t sure that Maersk is on the right track,” he says.
Jean-Paul Rodrigue at Hofstra University believes that big container ships like the Triple E will prove their value on specific trade routes, nonetheless.
“Each time a new generation comes along, there’s the argument ‘Oh is this going a little too far this time – is there enough port trade to justify this?'” he says.
“But each time the ship class was able to put itself in the system and provide a pretty good service.”
For more information click here
by Richard Scott,
Visiting Lecturer, Greenwich Maritime Institute and MD, Bulk Shipping Analysis
It could be called ‘the China decade’. World seaborne trade maintained a four percent average annual rate of growth during the past ten years, slightly better than the previous ten-year average. This achievement was especially notable in the light of the global economy’s evolution, featuring a wrenching severe recession. But trade growth at that rate would have been impossible without China’s super-size contribution.
During the past decade, from 2003 to 2013, in numerous highly visible ways, global maritime activities which already had been penetrated were then dominated by China’s presence. This pattern is still ongoing, and signs suggest that it will continue for many years ahead. One of the most important aspects of the trend is the phenomenal expansion of China’s seaborne trade, especially imports.
Other countries contributed rising import demand to world trade as well, but none as spectacularly as China. Until 2008, the global economy as a whole was advancing at a robust pace, providing a broadly favourable backdrop for seaborne imports into most areas. After the 2009 recession, economic activity picked up again, although beyond the initial rebound many countries struggled to make further progress against prevailing headwinds. These were difficult circumstances for trade to resume brisk and sustained expansion, yet that is what happened: world seaborne trade as a whole averaged over four percent growth in 2011 to 2013, returning to its ‘normal’ trajectory.
Goliath task for the shipping industry
Commercial shipping’s existence is mainly related to transporting cargoes. Rapid expansion of trade in goods explains why the world fleet of ships saw such strong growth over the past ten years. The huge trade enlargement recorded was remarkable, since this period included the global ‘Great Recession’ in late 2008, continuing through 2009, following the world financial crisis. That slump was widely seen as the most damaging setback for the world economy since the Great Depression in the 1930s. Global economic activity contracted, world seaborne trade was badly weakened and, unusually for an individual year, 2009 saw an actual decline in annual trade volume.
A few statistics emphasise how the pattern of trade evolved in the past decade. In 2003, world seaborne trade – including dry bulk commodities, oil, liquefied gas, manufactured goods (mainly container shipments) and all other cargoes – totalled 6,676 million tonnes. Ten years later, in 2013, the overall total reached an estimated 9,914mt, based on Clarksons Research calculations, cumulatively a 48.5 percent rise. Looking at individual years, a break in the trend is immediately evident. In 2009 there was a four percent reduction from the previous twelve months, followed by a swift ten percent bounceback in 2010. The general pattern was very positive including, significantly, the latest few years of the period up to 2013.
That is the broad picture, but the development pattern among the individual cargo sectors differed markedly. What is abundantly clear is that dry bulk trade made the biggest contribution to the overall advance. Global dry bulk commodity movements, which comprised 2,453mt (37 percent of the total) in 2003, expanded by seventy-six percent to an estimated 4,309mt in 2013, raising their share of the total to 43 percent. Container shipments also grew rapidly, rising by ninety percent, reaching 1,524mt. The second largest sector, oil (crude oil plus processed oil products) was a laggard, growing by a relatively modest twenty-one percent to 2,834mt over the ten years’ period.
A large part of this expansion, particularly in the dry bulk sector, was attributable to China’s multiplying appetite for imports. An especially valuable contribution to the global seaborne trade trend was seen in 2009. As already mentioned, trade declined in that year, but the downturn might have been much worse than actually occurred. A huge jump in China’s dry bulk commodity purchases, completely opposite to the pattern elsewhere, prevented a much greater overall decline.
Sea trade in the ten years ending 2013 as a whole was strengthened by many other countries needing increasing imports. A particularly substantial volume of imported cargo movements was added in Asia, alongside China’s additional volumes. Numerous countries in this region, including India, South Korea, Taiwan and smaller buyers, greatly raised purchases of dry bulks, oil, gas and manufactures. Further cargo import quantities were contributed by countries elsewhere around the world.
Figures for seaborne trade compiled by UNCTAD (United Nations Conference on Trade and Development) emphasise how the Asian region led global cargo movements growth. Roughly four-fifths of the entire growth in trade recorded during the period from 2003 to 2012 (currently the latest year for which these statistics are available) was attributable to extra imports into Asia. Another feature, related to the remaining approximately one-fifth of trade growth, is evidence of a reduction in Europe’s imports, a decreasing tendency in North America and a flattish trend in Japan. By contrast both the Middle East area, and a group of all other countries together, showed considerable imports increases.
The real giant awakes
China’s share of global seaborne trade has risen enormously, resulting from its imports growth comprising a very large proportion of world imports growth. As well as providing more cargoes for a greatly increasing China-owned fleet of ships, this upsurge benefited many independent shipowners in numerous countries and, through part of the period, proved highly profitable. Since 2008, however, variable overcapacity in world shipping markets has suppressed earnings for shipping investors.
In the early 2000s, China’s imports of all cargoes – dry bulks, oil, gas and manufactured goods (mostly container shipments) – comprised 5-6 percent of the world seaborne trade total. Global import demand then was still dominated by European countries, Japan and other Asian countries. Starting in 2003, rapid and sustained expansion in China began. Within ten years, a relatively short historical period, a dramatic transformation had occurred. This resulted in China’s share of world seaborne trade expanding almost fourfold from the early millennium, reaching an estimated 20.4 percent in 2013.
The giant’s emergence as an economic powerhouse affecting the world had occurred earlier. In a memorable comment attributed to him, the famous nineteenth century French Emperor Napoleon Bonaparte foreshadowed the eventual impact when he suggested that China’s awakening would shake the world. But such a cataclysmic event was a long time coming. It started happening in 1979 when China’s paramount leader, Deng Xiaoping, began opening up the economy to world trade, bringing the country’s extended ‘slumber’ to a close.
By the 1990s successive reforms had enabled the Chinese economy to achieve many years of very rapid expansion. Because this development was partly based on export sales, particularly manufactured goods, China became a major and then dominant supplier of these products to the world market. There were huge consequences for the maritime scene: seaborne trade patterns in the container shipping sector changed greatly. The world’s new ‘workshop’ became solidly established. But an even larger impact on global maritime trade was still some way ahead, in the new millennium.
During the early 2000s China began focusing on additional external raw materials and fuels supplies amid rapidly expanding industrial output. More agricultural products were also needed. Although domestic resources of many commodities were widely available, these were insufficient in volume and sometimes in quality as well. Industries including steelmaking, power generation, aluminium smelting, and animal feed manufacturing started placing much heavier emphasis on seeking supplies from foreign sources. The strong advance in quantities imported was the result.
Growing annual seaborne imports into China also formed rising percentages of the upwards overall global trade volumes trend. Statistics illustrate how significant this pattern has been for the global shipping industry, which now depends upon China for a substantial proportion of its bulk carrier, tanker and other ship employment. In 2003 China’s seaborne imports totalled just under 500 million tonnes, within a global total of 6,680mt. By 2013 the China volume had risen to 2,026mt within a global 9,914mt total. These Clarksons Research figures emphasise China’s significance for shipping companies, indicating that, during the 2003-2013 period, annual world seaborne trade rose by 49 percent, while within this volume China’s element increased by 305 percent.
The figures quoted here underline how world seaborne trade has risen greatly, and how a large part of that expansion reflected China’s much more rapidly growing imports. From the angle of additional ship employment created, this point is reinforced by looking at the percentages showing what proportion of growth in world seaborne trade volume during the ten years’ period was comprised of China’s expanding imports. It then becomes even more abundantly clear why global shipping industry players are so intently focused on how Chinese industry and agriculture is progressing, the implications for imports, and the evolving relationship between ‘home’ domestic commodity output and import demand.
As already outlined, global seaborne trade grew substantially from 2003 to 2013. Arguably the most spectacular positive feature during the period was that almost one half (47 percent) of the expansion was contributed by additional imports into China. For dry bulk commodities, the contribution was even larger, and therefore even more striking. China’s extra imports of these commodities (raw materials, fuels, other bulk industrial products, soyabeans and other bulk agricultural products), formed fully two-thirds or 66 percent of overall world seaborne trade growth within the sector. Consequently, shipping industry participants are still transfixed by the China theme.
In a range of key individual trades – iron ore, steam coal (used mainly in power stations), soyabeans, bauxite/alumina, nickel ore, crude oil – China has become either by far the biggest importer or one of the biggest. Expanding Chinese import volumes have been, or in some cases continue to be, the main component of global growth in large-scale trades. Shipowners, charterers, brokers and analysts as well as many others are therefore always looking for any clues about key influences: how demand for the products made by relevant industries are developing, what impact there will be on output levels, and what other factors will determine how much raw materials and other inputs will change as a result.
Among individual commodities, iron ore imports into China experienced, over the past ten years, one of the most dazzling performances ever seen in the long history of global maritime trade. China’s iron ore imports have become gigantic, employing a vast armada of bulk carriers, after rising well over five-fold, from 148mt in 2003 to 820mt in 2013. As a result, these now have a dominant role in world seaborne iron ore movements (one of the largest commodity trades), comprising about two-thirds of the total. Moreover, the 2014 China volume could exceed 900mt. Another example of a large volume trade is coal imports, which rose steeply by over seven-fold in the past five years, from 44mt in 2008 to 327mt in 2013. Crude oil and products imports into China by sea in the past ten years also increased robustly, more than doubling from 114mt, to 293mt last year.
A galloping horse
What seems clear is that China will remain a prominent part of global seaborne trade, and probably a key contributor to its growth, over many years into the future. That is not just a wildly optimistic appraisal. Certainly the country’s economic activity is slowing, and the trend may persist, consistent with a maturing economy. This feature reflects the switch of emphasis, from a demand viewpoint, towards consumer spending and away from capital investment (especially infrastructure projects) and exports. Looking at the economy’s supply side, a switch from manufacturing towards services is foreseen. But, while these forces will restrain production of goods with high raw materials content, further growth in imported natural resources and energy is likely.
The Year of the Horse, 2014, in China seems set to prove another period of increases in many commodity imports, and that trend may continue in the medium term at least. There are positive indicators, although the earlier gallop may be moderating towards a fast trot. Nevertheless, there are also reasons for caution or uncertainty about the outlook. Several questions arise. How rapidly will the economy grow in the years ahead? What, precisely, will be the relationship between economic activity and seaborne trade? Is growth in import demand for commodities likely to continue outpacing production increases in dependent industries? How will foreign purchases of agricultural commodities evolve? Answers involve a complex range of factors which are far from easy to assess reliably.
Also relevant to the general picture of world maritime trade’s progress is the contribution of other prominent players around the globe. A detailed examination of export suppliers is beyond the scope of this article. As import generating areas, other Asian countries, and Japan and Europe as well as the USA are particularly significant. Also, some emerging economies in the Middle East, South America and Africa are becoming more prominent influences. Currently the advanced economies group (mainly Europe, USA and Japan) is still having difficulty shaking off the long term debilitating effects of the 2009 recession and its problematical aftermath, with adverse implications for seaborne trade. Until there is a stronger import purchases trend in these countries, world seaborne trade’s great reliance and concentrated focus on China will persist.