Maritime Trade
Introduction.
Transportation is a key element for the development of an economy. Nations produce goods and services of different nature and there is need to export excess goods and services for them to acquire the goods and services they do not have. This is process of international trade and it involves the transfer of goods and services from one nation to another. International trade is conducted globally and it requires different forms of transportation. Since goods and services can be delivered using different means, nations utilize a wide range of transport facilities in the delivery of goods and services. For those goods that are bulky in nature and that comprise of large numbers, sea transport provides an easy mode of transport since the vessels are designed to transport cargo for long distances. This form of trade is known a maritime trade and is characterized by use of water bodies as the main means of transport. Maritime trade is trade between countries that requires the use of sea vessels to transport cargo between them. This trade is also referred to as commercial water transportation and is regulated by an international organization referred to as International Maritime Organization. This organization was formed by the United Nations and has its specialty in sea trade. It was established in 1948 and mandated with resolving maritime issues that would hinder the efficiency of sea trade (Rothwell & Bateman 2000).
A number of nations were involved in the formation of this organization and it was to mean to provide a formal meeting where disagreeing nations could present their grievances and have them addressed. The purpose of the IMO is to resolve the underlying issues and bring the nations to an agreement that would strengthen their trade relations. This would result to gainful resolutions as all member nations are involved in resolving the issues. The member nations would also meet to address common issues that presented themselves while conducting their operations. The members would seek for ways of solving the issues and ensure their implementation in their respective nations to make sea trade efficient and avoid losses caused by avoidable circumstances. The IMO is charged with the responsibility of coordinating and promoting safety practices at sea. In doing this, the organization presents nations with safety guidelines that are to be effected in vessels that are involved in shipping. Governments of the respective nations should ensure that the safety standards are adhered to by its vessels so as to reduce the sea accidents that result to huge losses in maritime trade. These safety standards range from inspecting the vessels before setting out for any mission to ensuring safety in the vessel when out in the sea.
The IMO sets rules and regulations that are to be followed when conducting sea trade. These rules and regulations address issues regarding disposal of waste so as to protect the marine environment (Fitzmaurice 2005). These rules seek to ensure that the sea trade is carried out without endangering the aquatic life. This provides a code of conduct for the officers running the vessels to avoid actions that will result to heavy fines imposed on the involved sea company. The organization enhances cooperation among governments of the member states on issues involving shipping to avoid actions that will lead to discrimination in the treatment of member states. The organization ensures fairness among the states thus providing for the smooth flow of trade among them. Regulations imposed by the various governments are reviewed to check for clauses that would restrict trade between the member countries. By reviewing these regulations, the organization assumes an advisory role whereby it advices member nations on the implications of their policies in conducting sea trade and provide alternative policies. The governments are at liberty to choose from the alternatives provided or stick to its policies and address the implications. The organization also forms consultative meetings that are geared towards bringing understanding between nations implementing new policies that affect sea trade either directly or indirectly. This involves informing the member nations on the changes and when they are effective. The member nations are also informed on any requirements that are required by the effected change for example communication gadgets among others.
The flag state.
Commercial vessels in maritime trade should be licensed for them to start their operations. This license is acquired from the state the trading company is registered in (Kristiansen 2004). The state that issues the licenses exercises control over the vessel’s movements and the vessels also indicates its country of origin by its flag. The state that exercises control over the vessel is known as the flag state and the vessel’s crew must have documents that verify the registration of the vessel. The individual flags states control the movement of the vessels that are registered in the respective nations considering their security and provide logistics. Vessels that violate the rules and regulations set by the IMO for example illegal dumping are fined heavily by their flag state. The nation that witnesses the act reports the vessel to the IMO which then contacts the flag state of the vessel (Dabydeen 2004). In the recent times, there has been an increase in international registrars which are flag states that have taken custody of foreign vessels that operate in their flag. In this case, one will find that the nationality of the owner of a vessel and the vessel’s flag are different. This has resulted to what is commonly referred to as “Flags of Convenience (FOC)” because it is viewed that the registration is done for economic benefit (Kristiansen 2004). Kristiansen (2004) further states that these flags lack the necessary resources to implement the safety standards that are stipulated by the IMO. To address the problem caused by these FOC’s, the involved parties decided to formulate an index (FLASCI) based on weighted average that ranks the flags. In forming this index, the factors to be considered included the maritime laws, the workers union law, corrupt practices among others. This index was used to rank the flagging nations into groups regarding their conformance to the IMO rules and regulations.
The effectiveness of control by the flag state has been questioned for some time as the backbone of safety control in the maritime trade since the safety precautions are exercised by the maritime authorities of the nations of registration who have different ways of implementing the safety standards.
The classification society
The classification society are autonomous bodies that were established to provide owners of sea vessels with specifications when designing and constructing ship for transporting various cargo (Lagoni 2007). The society was also given the mandate to set guidelines that oversee the repair of sea vessels. The specifications provided a framework within which all building, maintenance and repair activities on ship were to be undertaken. The building specifications included material strength, designing the hull, the strength of the hull, controls, emergency equipments and installation of the main machinery (Kee and Anil 2007). Sea trade is utilized in the transportation of a wide range of cargo that includes crude oil, containers, and minerals among others. These vessels therefore, have to be designed in a way that will ensure the safe transportation of the cargo to avoid any spillage or accidents in the waters. This specifications are provided and are to be followed to avoid any breakdowns of the vessel in the course of its journey. The society regarding safety ascertains that the ship’s structure is highly reliable and that its individual parts can be inspected with a lot of ease while inspecting their implications in the result of failure. They analyze the structure of the whole ship using the safety factor that is based on how easy it is to inspect a vessel and the implications of failure in those vessels. Taking the example of a tanker, the classification societies allows a vessel to continue its operations with a safety factor of 1 although there is need for it to undergo the required inspections. The vessel also undergoes dry docking which involves docking the vessel out of the water and conducting thorough checks on its structural strength (Rawson & Tupper 2001). A safety factor of 1 implies that the vessel can be fully inspected and its condition can be determined easily. In the designing phase engineers draw the structure of the vessel stating measurements and location of various parts then they go on and build the vessel.
When building the vessel, each and every stage of the building process is thoroughly inspected to ensure the safety of the vessel. After the construction exercise is complete, the vessel is awarded a certificate of class whereby it is considered safe to engage the vessel in the transportation of cargo. The certificate of class is very important since it is what insurance companies consider when insuring the vessel. The owners of the vessels pay for the acquisition of the certificate of class and they have to choose from a range of class institutions across the globe. The class institutions compete in different aspects that include pricing their services so as to have a competitive edge over the competitors. Vessel owners have the option to choose from various class institutions depending on the quality of service they want, cost of maintenance and any other incentives offered by the institution. The class institutions offer different rates to the ship owners depending on their past relationship thus vessel owners try to establish loyalty between themselves and the class institution that they choose to work with. On the other hand, vessel owners can change from one class institution to another in search for lower maintenance costs. Some class institutions are not very keen on inspecting the vessel and just do the ‘on surface inspections’ and then give the vessel ‘a clean bill of health’.
There exists a cordial relationship between the IMO, the flag state and the classification society. The flag state produces goods and services that need to be moved from one place (nation) to another for the production process to be completed. This movement may involve heavy cargo that might be costly to transport by other means like air transport among others. This leaves the option of sea transport that seems affordable although very slow. The sea transport is regulated by the IMO to ensure safety in the transportation of cargo from one nation to another. This is done by giving guidelines to the transport companies through their respective governments for their implementation. The IMO only gives the guidelines for example in the building and repair of vessels. The companies that construct and repair these vessels need to adhere to the guidelines stipulated. Thus these three components of maritime trading affect each other and have a huge impact on the trade.
In implementing the rules and regulations especially when it comes to disposing of waste, the three institutions assist each other. The state that witnesses the offense reports the matter to the IMO that then informs the flag state of the vessel which imposes the fines on the offending vessel. If for example the waste disposal was as a result of a spillage, action is taken on the classification society because it is charged with the responsibility of conducting repairs on the vessel. For the implementation of the rules and regulations these institutions have to work together and ensure strict adherence to the laws. Different states have different standards for their vessels far and above those provided for by the IMO. Potential vessel owners in these states have to construct their vessels with accordance to these requirements. The classification society inspects each and every stage that is complete to ensure that the standards of the vessel are as required. These rules however, should meet at least the rules and regulations specified by the IMO.
References
Dabydeen, S.R. (2004), UK steel industry, iUniverse, London.
Fitzmaurice, M. (2005), Contemporary issues, Eleven Int., Netherlands.
Kristiansen, S. (2004), Maritime transportation, Heinemann, London.
Kee, J.P. & Anil K.T. (2007), Ship-shaped offshore installations, Cambridge Univ. Pub., London.
Lagoni, N. (2007), Liabilities of classification societies, Springer, Chicago.
Rawson, K.J & Tupper, E.C (2001), Basic ship theory, Heinemann, United Kingdom.
Rothwell, D. & Bateman, S. (2005), Navigation rights & freedoms, Nijhoff Pub., Netherlands.
