Overview of Issues related to

International Shipping
Module 002
Capt Sarabjit Butalia MSc FNI IMOMA
9th May 2020
butaliasarabjit@gmail.com
 Assignments
• At the end of this session students are
required to discuss the following;
• International Shipping could be termed is
reflection of Governmental Policies, Geo-
politics, foreign relations ,World Economy,
Infrastructure development.
• Discuss this statement with examples.
• World Food Security
 Group Discussion

• Establish Linkage between Food security ,Trade and

Logistics/Supply Chain
World Food Security
World Food Security-Strategic Importance

• The most important inland and coastal

chokepoints lie in the US, Brazil and the
Black Sea, which account for 53 per cent
of global exports of wheat, rice, maize
and soybean.
World Food Security-Strategic Importance

• Inland waterways carry about 60 per cent of

US exports of the four crops (which account
for 13 per cent of worldwide exports) to the
sea, primarily to the Gulf Coast ports.
World Food Security-Strategic Importance
Examples of Choke Point Disruptions
Chinese Ownership of Overseas
Ports
World Food Security-Strategic Importance

• In Brazil, four ports on the southeastern

coastline are responsible for nearly a quarter
of global soybean exports; these ports in turn
depend on the roads linking them to the huge
farms in the country’s interior.
World Food Security-Strategic Importance

• Around 60 per cent of Russian and Ukrainian

wheat exports (12 per cent of the global total,
and growing fast) depend on rail to reach the
Black Sea.
 World Food Security-Strategic Importance

• Chokepoint risk is increasing

• These chokepoints are exposed to three broad
categories of disruptive hazards.
• First there are weather and climate hazards,
including storms or floods that may temporarily close
chokepoints, and weather-related wear and tear of
infrastructure that reduces its efficiency and makes it
more vulnerable to extreme events.
World Food Security-Strategic Importance

• Chokepoint risk is increasing

• Second, security and conflict hazards may
arise from war, political instability, piracy,
organized crime and/or terrorism.
• The third category of hazards are
institutional, such as a decision by authorities
to close a chokepoint or restrict the passage of
food.
World Food Security-Strategic Importance

• Chokepoint risk is increasing-Examples

✓Hurricane Katrina in 2005 were to shut down
US exports from the Gulf of Mexico.
✓Extreme rainfall rendered Brazil’s roads
impassable happened in 2013
✓Black Sea heatwave similar to the one
recorded in 2010
World Food Security-Strategic Importance

• Chokepoint risk is increasing-Examples

• Chronic underinvestment in infrastructure is
creating a double deficit of capacity with
respect to growing trade volumes, and of
resilience with respect to climate change.
• Brazil’s roads are poor and often rendered
impassable by rain and subsidence.
World Food Security-Strategic Importance

• Chokepoint risk is increasing-Examples

• The Black Sea region requires significant
investment in transport infrastructure, but
regional instability is a deterrent to this.
World Food Security-Strategic Importance

• Which countries are most at risk?

• 87 per cent of China’s grain and fertilizer

imports are shipped through at least one
maritime chokepoint, only 4 per cent pass
through chokepoints for which no alternative
route exists.
World Food Security-Strategic Importance

• Which countries are most at risk?

• MENA countries rely on grain exports from the
Black Sea, transported via Russian and
Ukrainian railways and ports and on through
the Turkish Straits; should these straits close
for any reason, no alternative maritime
routing option exists.
World Food Security-Strategic Importance

• Which countries are most at risk?

• Many Low Income Food Deficit Countries( LIFDCs)
are also dependent on US exports and thus heavily
exposed to US inland and coastal chokepoints.
• For example, Honduras sources 77 per cent of its
maize imports and 88 per cent of its wheat imports
from the US, and in Ethiopia the shares are 36 per
cent and 27 per cent.
 World Food Security-Strategic Importance

• Which countries are most at risk?

• Japan and South Korea rank among the most exposed
countries in the world, despite also being two of the richest.
Though not considered food-insecure by traditional metrics,
both countries rely heavily on food imports that transit one,
two or three chokepoints.
• Just under three-quarters of Japan’s maize and wheat imports
pass through the Panama Canal; and one-third of South
Korea’s wheat and maize imports pass through the Suez
Canal, Strait of Bab al-Mandab and Strait of Malacca
World Food Security-Strategic Importance

• Chokepoint risks are poorly understood and

poorly managed.
• Despite their importance to the availability
and price of food, chokepoints are
systematically overlooked in assessments of
strategic food security
 World Food Security-Strategic Importance

• Chokepoint risks are poorly understood and poorly managed.

• The most obvious exception to this picture is China, which is
acutely aware of its exposures.
• It actively invests in overseas infrastructure to relieve pressure
on existing chokepoints (e.g. as a major investor in Brazilian
infrastructure); to diversify supply routes (e.g. through
construction of a railway across South America to lessen
reliance on the Panama Canal); and to increase its operational
footprint along its supply chains (Chinese companies are
ubiquitous owners and operators of ports and trans-shipment
hubs).
World Food Security-Strategic Importance

• Recommendations
✓ Integrate chokepoint analysis into mainstream risk
management and security planning.
✓ Invest in infrastructure to ensure future food
security.
✓ Enhance confidence and predictability in global
trade.
✓ Develop emergency supply-sharing arrangements
and smarter strategic storage
World Food Security-Strategic Importance

• Population growth, shifting dietary

preferences and growing demand for biofuels
are driving up demand for grain for food,
animal feed and fuel.
• Global crop production will need to double by
2050 to keep pace with this demand.
THANKYOU