Economics of Maritime Business

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The supply

The supply

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Chapter 5 Productivity and structure changes in maritime transport

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It was concluded in the previous chapter that one of the major causes of the extraordinary growth of international trade is the decline of maritime transport prices, especially in terms of value for money. It means that the price a customer pays for transport services with a comparable quality has been decreasing. Though prices do fluctuate in the long term and in a competitive market, which is very much the case of international shipping, the price is determined by cost. So, over a long time, the cost of providing a specific type of maritime transport service has declined. What are the root causes for this fall in the transport cost? Under what conditions did the cost decrease happen? What are the driving forces for such condition changes? In this chapter we will discuss these questions by looking at the structural evolution that occurred in the maritime transport industry and by analysing various issues related to maritime transport productivity: its nature, the reasons and the impact on international seaborne trade, both in the short and long term.

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