THE IMPORTANCE OF SHIPPING AS OPPOSED TO AVIATION

Over the years there were many comparisons of shipping as opposed to aviation. This paper
seeks to analyze specific areas of both the maritime and aviation sector and determine its
importance to the world’s economy. In doing so the writer will look three specific areas, they
are;
a. Their financial contribution to the world’s economy (World GDP)

b. Employment opportunities/Jobs provided.

c. Their environmental impact.

There are many comparisons that can be made between the two sectors, however, this paper will
analyze four areas common to both sectors. They are; safety, security, pollution and cost……….

The Importance of the Shipping Industry

The international shipping industry accounts for transporting ninety percent (90%) of the world’s
trade. The shipping industry is one of the oldest industries and still plays an important role in our
modern society. According to Statista Research Department, in its March 23, 2020 publication,
“As of January 2019, there were 53,732 ships in the world's merchant fleets alone, active in
international trade”. The fleet is represented in over 150 countries and, crewed by over 1.5
million seafarers working around the world. The different types of cargo being transported are
goods for consumers, food, raw material, cars and fuel, just to name a few. See figure 1 below:

https://ramiwaheed.wordpress.com/2012/09/15/the-economic-role-of-the-shipping-industry/
NOTES

Without shipping the import and export of goods on the scale necessary for the modern world
would not be possible. Shipping plays a vital role in world trade and is the backbone of the world
economy. Without ships and the transportation services these ships provide, the world would not
be as prosperous as it is today and many countries would not be able to participate in world
trade.

With the technological development in our days compared to the previous era,
Shipping has become faster with the use of giant vessels and significantly gas, oil and diesel
engines.

One of the most important features of shipping is the capacity in a single shipment of freight,
companies can transport large quantities of goods due to the volume of vessels. Whether you’re
transporting heavy goods or a very large amount of lighter goods, maritime shipping is your best
option. This makes for high competitive rates and allows maritime shipping companies to easily
take care of large demands.

Sea freight can import and export goods or materials that are difficult to transport or be carried
by other means of transportation. One can imagine that without shipping, It would be difficult to
complete business transactions (trade) between the different continents of the world whether it
relates to raw materials, food or manufactured products.

Shipping can provide efficient low-cost transportation, and its effective use is important to the
economic progress of developing countries, in terms of the economic contribution and growth of
their foreign trade, and their domestic production and consumption. Then, there is also the fact
that all businesses whose cargo are being carried will share the cost of the specific vessel arriving
at its destination. It is primarily because of these reasons that maritime shipping is among the
most affordable ways to move cargo. When compared with its biggest rival (Shipping by air) in
terms of long-distance shipping, maritime freight services are much less expensive. Additionally,
with maritime industry reshaping its supply chain, more accurate cost models are now being
introduced. 

It is an important advantage that ships can carry large volumes at low costs and a freight
forwarder can consolidate consignments to reduce costs. Secondly, shipping containers can also
be used for further transportation by road or rail.

However, some disadvantages experienced in this sector are; Shipping by sea can be slower than
other transport modes and bad weather can add further delays, Routes and timetables are usually
inflexible, tracking of goods is difficult and needs improvement, additional cost for port duties
and taxes, further transportation overland will be required to reach the final destination and basic
freight rates are subject to fuel and currency surcharges.

Liner shipping is the most efficient mode of transportation of goods. In one year, a single large
containership could carry over 200,000 container loads of cargo. While individual ships vary in
size and carrying capacity, many container ships can transport up to 8,000 containers of finished
goods and products on a single voyage. Similarly, on a single voyage, some car carrier ships can
handle 7,600 cars. It would require hundreds of freight aircraft, many miles of rail cars, and
fleets of trucks to carry the goods that can fit on one large liner ship.
Recently, two independent sources looked at the economic contribution of the liner shipping
industry and concluded that it is indeed a global economic engine for two reasons: the significant
amount the industry contributes directly to the global economy, and the role of the industry as a
facilitator of economic growth for other industries.

In 2006, former finance and economics editor for the Economist, Marc Levinson released this
book, which makes the case that the modern global economy would not exist were it not for
introduction of the container and the liner shipping industry that moves them. Some of his
notable observations:

 The container made shipping cheap and changed the shape of the world economy.
 Consumers enjoy infinitely more choices thanks to the global trade the container has
stimulated.
o The U.S. imported four times as any varieties of goods in 2002 as in 1972,
generating a consumer benefit - not counted in official statistics - equal to nearly 3
percent of the entire economy. 
 The ready availability of inexpensive imported consumer goods has boosted living
standards around the world.
 The emergence of the logistics industry ... has led to the creation of new and often better-
paying jobs in warehousing and transportation.
 The container not only lowered freight bills but saved time.
The Importance of Aviation industry

According to Air Transport Association Group (ATAG) in 2011, over 2.8 billion passengers
were carried by the world’s airlines. Over 56 million people are employed worldwide in aviation
and related tourism. Of this, 8.36 million people work directly in the aviation industry.
If aviation were a country, it would rank 19th in the world in terms of gross domestic product
(GDP), generating US$539 billion of GDP per year, considerably larger than some members of
the G20 (and around the same size as Switzerland).
By 2026, it is forecast that aviation will contribute US$1 trillion to world GDP. The importance
of the industry to global economic development cannot be over emphasized and the above facts
and figure clearly tells the story.
Aviation plays a vital role especially in emergencies like air ambulance and medical evacuation
for seriously injured or unconscious persons and it is the easiest way to save a life.
Aviation has enabled business owners and investors to run business all over the world and they
can be able to visit them physically within days and be back at the headquarters the same day by
using either private charter or commercial flights. Not even forgetting countries affected by war
where medical attention and relief supplies are required; it can be done in hours.
Within aviation, the sky is the limit and even transportation of fresh flowers and fresh vegetables
can be flown and received when fresh and one might think it was planted there.
In the event of hijacking at the sea, aircrafts are able to deliver the negotiated ransom within
hours and it can be parachuted without other people knowing. In supplement medicine, clothes,
food, water can be parachuted using aircrafts.
In war torn areas like South Sudan, Darfur, Chad where people are suffering and there are no
roads and there is insecurity. Indeed the aviation industry has contributed a lot in making our
travel quick and also in saving peoples’ lives by segmenting air charter services with the right
aircrafts and not leaving out the helicopter which is used where there are no airstrips.
Guyana Chronicle dated; December 28, 2012
this vision has become an evident reality, to such an extent that air transport is now accepted as a
fundamental pillar of our global society, as indispensable to our daily lives as medicine and
telecommunications, and essential for social progress and economic prosperity.
The growing availability of affordable air travel has considerably widened aviation’s role in our
sustainable society. Air travel is no longer a luxury commodity. The air transport industry has
not only underpinned wealth creation in the developed world, but has also brought enormous
benefits to developing economies by unlocking their potential for trade and tourism.

Philippe Rochat
Executive Director
ATAG

Air transport provides vital economic benefits • Aviation provides the only worldwide
transportation network, which makes it essential for global business and tourism. It plays a vital
role in facilitating economic growth, particularly in developing countries. • Aviation transports
close to 2 billion † passengers annually and 40% of interregional exports of goods (by value). •
40% of international tourists now travel by air. • The air transport industry generates a total of 29
million jobs globally (through direct, indirect, induced and catalytic impacts). • Aviation’s global
economic impact (direct, indirect, induced and catalytic) is estimated at US$ 2,960 billion,
equivalent to 8% of world Gross Domestic Product (GDP). • The world’s 900 airlines have a
total fleet of nearly 22,000 aircraft1 . They serve some 1,670 airports2 through a route network
of several million kilometres managed by around 160 air navigation service providers3 . • 25%
of all companies’ sales are dependent on air transport. 70% of businesses report that serving a
bigger market is a key benefit of using air services.

Oxford Economic Forecasting (OEF) argue that there are important functional links between
economic growth and aviation. These are derived from; (a) The contribution aviation makes in
its own right in terms of employment, production, exports, value added, investment and
Exchequer contributions and (b) The impact aviation has on the performance of other industries
as a facilitator of economic growth and rising productivity.

Air transport is a highly efficient user of resources and infrastructure • Aviation boasts high
occupancy rates of 65 to 70% – which is more than double those of road and rail transportation. •
Air transport entirely covers its infrastructure costs. Unlike road and rail, it is a net contributor to
national treasuries4 through taxation. • Modern aircraft achieve fuel efficiencies of 3.5 litres per
100 passenger-km or 67 passenger-miles per US gallon. The next generation aircraft (A380 &
B787) are targeting an efficiency of less than 3 litres per 100 passenger-km or 78 passenger-
miles per US gallon5 , which exceeds the efficiency of any modern compact car on the market.
The Importance of the Environmental Impact

Shipping

The environmental impact of shipping mainly includes air pollution, water pollution, acoustic,

and oil pollution. There is little if any dispute about the fact that shipping is the most carbon-
efficient mode of transportation. According to a recent report of an International Maritime
Organization (IMO) expert working group, international maritime shipping accounts for 2.7% of
annual global greenhouse gas emissions. According to analysis by the Swedish Network for
Transport and the Environment, shipping also produces fewer exhaust gas emissions (including
nitrogen oxides, hydrocarbons, particulates, carbon monoxide and sulfur dioxide) for each ton
transported one kilometer than air or road transport.

The IMO as the United Nations agency responsible for developing and adopting measures to improve
the safety and security of international shipping and to prevent pollution from ships, the International
Maritime Organization (IMO) has an integral role in meeting the targets set out in United Nations
Sustainable Development Goal (SDG) 14, which is to “Conserve and sustainably use the oceans, seas
and marine resources for sustainable development”.
Formed by means of the 1948 Convention on the International Maritime Organization, IMO initially
focused on maritime safety and navigation. In the 1960s, the world became more aware of the spillage
of oil into the oceans and seas through accidents or as a result of poor operating practices. Spurred by
major oil pollution incidents, such as the Torrey Canyon disaster off the south-west coast of the
United Kingdom in 1967, IMO embarked on an ambitious programme of work on marine pollution
prevention and response, and on liability and compensation issues. A key outcome was the adoption,
in 1973, of the International Convention for the Prevention of Pollution from Ships, universally
known as MARPOL.

From its inception, MARPOL addressed not just pollution by oil from ships (covered in Annex I) but
also noxious liquid substances, such as chemicals, carried in bulk (Annex II); harmful substances
carried in packaged form (Annex III); sewage discharges into the sea (Annex IV); and the disposal at
sea of ship-generated garbage (Annex V). Under Annex V, a general prohibition applies to
discharging all garbage from ships, while discharging plastics is subject to a total, globally applicable
ban. Later, in 1997, IMO added a new Annex VI to MARPOL dealing with atmospheric pollution
from ships. Today, Annex VI addresses air pollution from sulphur and other harmful emissions, such
as nitrogen oxides and particulate matter. In 2011, IMO became the first international regulator for a
transport sector to adopt globally binding energy efficiency requirements, which apply to all ships
globally, regardless of trading pattern or flag State, aimed at reducing greenhouse gas emissions from
international shipping.

MARPOL Annex VI also incorporates regulations for ozone-depleting substances, volatile organic
compounds, shipboard incinerators, reception facilities and fuel oil quality. All these measures have a
significant, beneficial impact on the atmospheric environment, and also on human health for people
living in or near port cities and coastal communities.

Under MARPOL Annex VI, Emission Control Areas (ECAs) for sulphur oxide and nitrogen oxide
emissions have been designated, with a strict 0.10 per cent by mass (m/m) limit on sulphur in fuel oil.
In a move that demonstrates a clear commitment by IMO to ensuring that shipping meets its
environmental obligations, the global sulphur limit outside ECAs was cut to 0.50 per cent m/m, from
3.5 per cent m/m, from 1 January 2020.
Today, the expanded, amended and updated MARPOL Convention remains the most important, as
well as the most comprehensive, international treaty covering the prevention of both marine and
atmospheric pollution by ships, from operational or accidental causes. By providing a solid foundation
for substantial and continued reductions in ship-source pollution, the Convention continues to be
relevant today.

Aviation

The Committee on Aviation Environmental Protection (CAEP) undertakes specific studies, as

requested by the Council. Its scope of activities encompasses noise, local air quality (LAQ) and
the basket of measures for reducing international aviation CO2 emissions, including aircraft
technology, operational improvement, sustainable aviation fuels and market-based measures
Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

The International Civil Aviation Organisation (ICAO) plays a leading role in addressing
aviation’s impact on the environment. Its standards and policies ensure that aviation’s impact on
the environment is addressed in a coherent way and guarantee the high degree of uniformity in
regulations, standards and procedures that is required for the safe, orderly and efficient
functioning of today’s air transport system. Unfortunately, recent experience has shown that the
implementation of ICAO’s policies relating to the environment at the national and local level is
far from consistent, with negative impact for airlines, their customers, trade and local economies.

The Committee on Aviation Environmental Protection (CAEP) is a technical committee of the

ICAO Council established in 1983. CAEP assists the Council in formulating new policies and
adopting new Standards and Recommended Practices (SARPs) related to aircraft noise and
emissions, and more generally to aviation environmental impact.

CAEP undertakes specific studies, as requested by the Council. Its scope of activities
encompasses noise, local air quality (LAQ) and the basket of measures for reducing international
aviation CO2 emissions, including aircraft technology, operational improvement, sustainable
aviation fuels and market-based measures Carbon Offsetting and Reduction Scheme for
International Aviation (CORSIA).
 
CAEP informs the Council's and Assembly's decision making with the ICAO Global
Environmental Trends, which assess the present and future impact of aircraft noise and aircraft
engine emissions. The Global Environmental Trends is crucial to the work of ICAO as it
provides a robust single reference for sound discussion and decision-making.

It is important to note that the Assembly and CAEP, ICAO’s environmental standards are not
intended to introduce or serve as the basis for operating restrictions or levies but have been
adopted for certification purposes only.

Aviation has a number of environmental impacts that are experienced by local residents in the
vicinity of airports and under flight paths. Noise has been the focus of concern over the last 20
years of growth in aviation and more recently air pollution and the health effects of air pollution
from aircraft and land based transport have begun to cause concern.

Noise is not just annoyance. It damages health, it detracts significantly from the quality of life, it
stops local residents enjoying their gardens or simply enjoying peace and quiet, it damages
wildlife, it damages the learning ability of schoolchildren and it costs a great deal of money
through the costs of noise mitigation and noise abatement. Aircraft noise is a serious concern
around all airports and under flight paths notwithstanding the adoption of quieter aircraft and
engine technology. Aircraft noise is a controversial matter. It is frequently asserted by the
aviation industry that the number of people exposed to noise problems, the so-called noise
footprint, is shrinking rapidly.

The introduction of quieter aircraft cannot be expected to compensate in all circumstances for the
vigorous growth of aviation itself, for nighttime flight activity, for the increase in air freight, for
the spread of commercial aviation to airports that serve quite small towns and regions and for the
growth of military, commercial helicopter and recreational aircraft.

Effects of noise on humans The World Health Organisation 1993 document, "Community Noise"
(WHO, 1993) reviews the international scientific evidence on the effects of noise. These include;
Hearing impairment, Pain, Perceived noisiness and annoyance, Interference with communication
and speech perception, Sleep disturbance, Psycohphysiological reactions during sleep (including
effects on heart rate, finger pulse, respiration), Stress, Cardiovascular effects, Psychoendocrine
effects, Startle reflex and orienting response, Effects on physical health (including nausea,
headache, irritability, instability, argumentativeness, reduction in sexual drive, anxiety,
nervousness, insomnia, abnormal somnolence and loss of appetite), Mental disorders, Task
performance and productivity, Deficits in reading acquisition among children and Effects on
social behaviour (eg willingness to help others)

Airports are also significant traffic generators, freight distribution centres, taxi destinations and
bus stations and are responsible for significant amounts of pollution from the exhaust emissions
of land based transport. They also have large amounts of fixed and mobile generating equipment
to supply aircraft with power whilst they are on the stand and large scale maintenance facilities
for engines and aircraft. They are also large fuel depots with storage tanks, fuel lines and
refueling facilities all contributing evaporative emissions of VOCs to atmosphere.

Impacts of Emissions Aircraft emit their exhaust gas pollutants directly in the upper troposphere
and lower stratosphere. These emissions interact in these sensitive parts of the atmosphere and
are responsible for changes in ozone and methane concentration thus forming contrails. The
specific impact on the atmosphere of aviation emissions has been the subject of several major
research projects by NASA, the European Commission and the German Ministry of Research.

Analysis on the importance of the environmental impact

Vessels are more eco-friendly when compared with aircrafts, vessels also provide much better
options for eco-friendly shipping. Aircrafts use a lot of petroleum, leaving a very large carbon
trail. This, in turn, damages the atmosphere. Such carbon trails disrupt the ecological balance and
contribute to the negative effects of global warming. Even the slight cirrus clouds that form
behind aircrafts contribute to impact these negative effects on Mother Nature.
As vessels don’t use a lot of petroleum, they leave a small carbon trail. In most cases, this makes
them a better option for business-owners who are concerned with helping the planet Earth.

AVIATION

Air transport is a major employer The air transport industry generates a total of 29 million
jobs globally. 5.0 million direct jobs • The airline and airport industry directly employ 4.3
million people globally. • The civil aerospace sector (manufacture of aircraft systems, frames and
engines, etc.) employs 730,000 people. 5.8 million indirect jobs through purchases of goods and
services from companies in its supply chain. 2.7 million induced jobs through spending by
industry employees. 15.5 million direct and indirect jobs through air transport’s catalytic impact
on tourism. Some 6.7 million direct tourism jobs are supported by the spending of international
visitors arriving by air. As a capital-intensive business, productivity per worker in the air
transport industry is very high, at three and a half times the average for other sectors.
https://www.icao.int/Meetings/a39/Documents/WP/wp_152_en.pdf