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Introduction

Ninety per cent of the world’s international trade is transported by sea. The customs and practice

associated with this form of transport have been refined over centuries of worldwide trade. Sending

cargo by sea is ideal for high volume cargoes that are not necessarily time sensitive or have long lead

times for delivery. However this mode of transport is slow fraught with possibilities for delay. As

globalization has increased and sources of manufacturing moved eastwards to India and China more

companies have outsourced their manufacturing to this part of the globe. As a consequence due to the

elongated supply lines and slowness of this form of transport higher levels of in transit inventory need to

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The use of shipping containers has revolutionized the way that cargo is handled and transported see

Chapter 25 Rail and intermodal transport. This chapter aims to give a general overview of maritime

transport or as it is often called sea freight. The reference to maritime transport as shipping has been

avoided to prevent confusion as many people often use the term shipping especially in the USA in the

context of dispatching cargo from its origin whatever the mode of transport used.

Structure of the industry

Liner conferences

Liner conferences are formal groups of shipping lines that operate on certain shipping routes. They were

first set up to control the trade between colonial powers and their colonies. Today they are seen by

many as being a very controversial anachronism as they work together to agree tariffs for certain routes.

They work fundamentally for the interests of the member shipping lines to help to avoid destructive

price competition as they see it. For their part the shipping lines would argue that there would be much

more price and capacity volatility with- out the stability that the liner conferences provide. The shipping

lines have invested huge amounts of capital in the ships themselves and the conference system provides

a way of managing forward revenue streams. The European Union as well as many of the conference’s

customers has criticized them for anti – competitive actions and is examining ways of changing the

status quo.

As a matter of record the liner conferences are the only industry that is currently exempted from anti -

competition laws in Europe and the USA it is called anti – trust legislation in the USA. There is a huge

body of opposition to these price fixing organizations and it is very likely that further legislative action

will be taken against them.

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