Presentation on theme: "INTERNATIONAL BUSINESS UNIT 1 Past to Present: Global Business"— Presentation transcript:
1 INTERNATIONAL BUSINESS UNIT 1 Past to Present: Global Business UNIT 1 OverviewAncient global tradeINTERNATIONAL BUSINESS UNIT 1 Past to Present: Global BusinessCan YOU define it?In this 21st century people around the world are connected in many ways.Technology and new trading relationships between different countries mean everyone is affected by international business directly or indirectly. Your challenge as a global citizen is to find ways to live and work in the world’s economy. Understanding international trade will help you prepare to work in business today..
2 For centuries, people of the world have traded For centuries, people of the world have traded. From the ancient silk routes and spice trade to modern shipping containers and satellite data transfers, nations have tied their economies to the rest of the world by complex flows of products and services. Free trade, which allows traders to interact without barriers imposed by government, can improve the living standards of people because it reduces prices and increases the variety of goods and services for consumers. It can also create new jobs and opportunities, and it encourages innovative uses of resources. However, even though free trade can benefit an economy as a whole, specific groups may be hurt. While certain sectors will experience job gains, others will face job losses. Still, societies throughout history have found that the benefits of international trade outweigh the costs. WELCOME, LADIES AND GENTLEMEN, TO INTERNATIONAL BUSINESS.The Age of Discovery – 15th to 17th century—European and Asian nations began establishing new trade routes, and meeting new people. Up until this time, most trade routes were overland.
3 ANY business transactions between two or more countries; activity involving business operations across national borders to satisfy objectives of individuals, companies, and organizations International BusinessBusiness – any activity that seeks profit by providing goods and services to others—a very basic definitionAt its simplest:Domestic Business involves transactions occurring within the boundaries of a single country, involves one countries (called home country) ex: mom and pop diner at the corner would be a domestic businessInternational Business transactions cross national boundaries, involves two or more countries ex: I buy imported tea from China. The company that sold the tea would be an International Business.What do you think is the biggest world business? DRUGS $3.98T followed by HUMAN TRAFFICKING; 800,000 TRAFFICKED ACROSS INTERNATIONAL BORDERS YEARLY 400,000 ARE CHILDREN.DOMESTIC BUSINESSAny business that conducts business in only one country (aka home country)
4 INTERCHANGEABLE TERMS?? Multinational corporation (MNC) Transnational corporation (TNC) Multinational enterprises (MNE) International company Global companies Global enterprises Worldwide companies Different title, same concept?If in doubt, use the terms international business, but each is a little different from the other. Click on this website to find out just what we mean?Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their “home” country.International companies are importers and exporters, they have no investment outside of their home country. International companies make their product or service only in their home country—as stated they are importers and exporters—no staff, no warehouses, no sales offices in foreign countries (small local manfuacturer that exports to neighboring countries)Multinational companies (McDonalds) have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market. They invest directly (FDI) in foreign assets whether leasing a building, a plant on foreign soil or conducting a foreign marketing campaign. The focus on being responsive to local preferences than a global company would.Global companies (Dell) have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office located in their home country that is responsible for global strategy. One marketing campaign that spans the globe but in various languages. Dell is a global company operating in 34 countries in three world regions, with about 35,000 employees and $30 billion in sales. Corporate headquarters is in Round Rock, Texas, which is also the regional headquarters for Dell Americas. Product development is largely centralized in the U.S., and the same base products are sold worldwide. These products are customized for different regional and country markets with appropriate power supplies, keyboards, software and documentation. Other functions such as IT and e-commerce applications usually originate in the U.S., and then are adopted with necessary modifications in the other regions.Transnational companies (Disney, Nestle) are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market. Also referrred to as MultiNational corporations.Andrews’s advice is if in doubt about the right term to use, try the generic term “international business”..
5 Does this business qualify as a global enterprise? Angel Sanchez was born into a family that ran a made-to-order dress business. He was an immediate success in Caracas, Venezuela when he launched his own label in Four years later, he opened a showroom in New York. He now does business around the world. Wedding dresses between $3,000 - $7,0001987 – began his climb to the topPresent – solidified his presence as an international designerYes, corporations must own and control foreign investments and/or delivers goods and/or services in at least two countries to be a global company.
6 Why study International Business? We live in a world that is affected by what happens in many different parts of the world. International Business introduces you to SOME of the factors that business today needs to be aware of in order to compete in our interconnected and interrelated world. What Is Globalism? - YouTubeInternational business comprises a large and growing part of the worlds total business.Ninety-five percent of the world's population and 75 percent of purchasing power exist outside of the United States. In today's economy, most economic boundaries have already disappeared and those remaining will continue to diminish. This is due to the proliferation of electronic communication, which allows instantaneous information transfer for sales, marketing, manufacturing and outsourcing. Furthermore, growing distribution networks, supply chains, and transportation hubs simplify the movement of products. And, the broad networks of worldwide financial institutions reduce currency issues. Thus, businesses operating in the Midwest can service the needs of customers around the world.In order to be prepared for a career in any facet of the business world (accounting, finance, marketing, information technology, law, healthcare, etc.), knowledge and understanding of global issues is critical. Thus, you should study international business to be prepared for diverse business opportunities, knowing in advance that respect for and knowledge of your counterparts can give you a competitive advantage
7 LET’S TAKE A TRIP BACK TO THE BEGINNING. . . You may be tempted to think that global trade is a recent development.It is not. Trade took place over 150,000 years ago.
8 DID IT ALL START HERE?150,000 years agoBarteringDirect exchange of goods or services for other goods or services without use of money.You may be tempted to think that global trade is a recent development.It is not. Trade took place over 150,000 years ago.Bartering was face-to-face trading: I’ll give you my axe if you kill me a mammoth.evolved into trading goods such as pelts, salt, weapons, etc. This became the medium of exchange.It is estimated that over 350,000 businesses in the United States are involved in barter exchange activities.Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.
9 Introduction to Globalization - YouTube EUROPEASIAWould the ancient trade system of the old world be classified as global?AFRICAThis is a look at the OLD WORLD somewhere in the 15th century (1400’S) which consisted of mainly Africa, Asia, and Europe, known as AFRO-EUROASIAThis map shows the ancient trading systems in the "Old World" of Europe, Asia, and Africa. The map indicates trade routes, the Silk Road, trading centers, and both imports and exports. The continents of Africa, Asia, and Europe, trading routes overland as well as the oceans Pacific, Indian, Atlantic.Would we classify this ancient trade system of the old world as “global.” Does it encompass “world trade” or does it encompass only the continents of asia, africa, europe. NO, most of the world is still outside its boundaries and most production remained local.Introduction to Globalization - YouTube
10 We cannot discuss the birth of International trade without mentioning the greatest empire the world has every known—the Roman Empire 1st and 2nd century) that spanned basically Europe and Africa. 200 years of Pax Romana (roman peace The “roman peace” ensured that merchants were able to travel safely and rapidly on roads built, protected, and maintained by the roman legions.the Roman army spent much of its time building an excellent system of some 51,000 miles of paved roads stretching across the empire. While these roads' original purpose was to facilitate the rapid movement of Roman troops to trouble spots, they also promoted trade and the influx of Italian merchants into the towns of the western provinces Romans thrived off of its imports, and importers were among the wealthiest citizens of the EmpireAt its peak, Roman Empire included about 41 countries:Portugal- Spain- Andorra- United Kingdom- France- Monaco- Luxembourg- Belgium- Netherlands- Germany- Switzerland- Liechtenstein- Italy- San Marino- Vatican City- Malta- Austria- Slovenia- Croatia- Bosnia-Herzegovina- Hungary- Yugoslavia- Albania- Greece- FYR Macedonia- Romania- Bulgaria- Turkey-.. Syria- Iraq-. Cyprus- Lebanon- Jordania- Israel- Egypt- Lybia- Tunisia- Algeria- Morocco- Palestine41 countires: Portugal- Spain- Andorra- United Kingdom- France- Monaco- Luxembourg- Belgium- Netherlands- Germany- Switzerland- Liechtenstein- Italy- San Marino- Vatican City- Malta- Austria- Slovenia- Croatia- Bosnia-Herzegovina- Hungary- Yugoslavia- Albania- Greece- FYR Macedonia- Romania- Bulgaria- Turkey-.. Syria- Iraq-. Cyprus- Lebanon- Jordania- Israel- Egypt- Lybia- Tunisia- Algeria- Morocco- PalestineAt the peak of the Roman Empire around 180 AD, how many of today’s countries do you think were included within this vast Empire?
11 TRADING ROUTES OF THE ANCIENT WORLD Yesterday and Today We have seen how ancient trade impacted segmented parts of the world.Let’s take a look at the trading routes used.
12 THE LONELIEST ROAD IN CHINA THE AMBASSADOR’S ROAD Built around 200 BCimportant supply route for caravans of mules carrying exotic goods to and from southwestern ChinaNow largely abandoned and unkempt, its paving stones are long overgrown with grass or are missing completely.It has long been known as the Ambassador Road since early dignitaries used the route to cross back and forth between British-ruled Burma (now Myanmar) and China.About 1,600 miles from Mainland China to BurmaYou’ non (yunnan) me an mar’ (myanmar)The Ambassador s Road (over 1,000 years old) started out as unpaved dirt paths that Chinese peasants had created millennia ago to in order to communicate with distant villages. It cris-crossed over China from the east coast to present day Burma. It’s about miles from mainland China to Vietnam; (click to show mountain view of road) about 1800 miles from mainland China to Burma road dips into valleys and the occasional market town, for the most part it snakes over mountain passes and through barely inhabited areas of stunning landscape.The Ambassadors Road brought traders of various ethnicities to China to trade commodities such as cotton, spices, and other goods for silk, rice, jade, and other Chinese goods. The trade route stretched all the way to Korea, Beijing, Canton, Vietnam, and Burma. Around 200 B.C. the Yellow Emperor Huang Ti united China to form the Chin Dynasty. Huang Ti realized that having a large empire could be problematic because his orders would not reach the edge of the empire for weeks. The time it took for messages to be relayed from the Emperor to the rest of his people and for an acknowledgement to come back could sometimes mean the difference between life and death. If the empire were to be attacked from the south, the Emperor had to know quickly of the attack and had to be able to summon troops from the west in order to keep the invaders from taking the capital. The quickest communication at this point in history was by horseback. Roads had to be built and adequately maintained in order for messengers to travel as quickly as possible specifically to deliver messages about attacks.myanmar
13 Silk road THE SILK ROAD Yesterday and Today Trading by sea---while caravan merchants of the Silk Road risked their worldly assets transporting goods over mountains and deserts, other traders placed their bets on the sea. To reach China, ships sailing from Baghdad had to travel some 6,000 miles. The voyage took about six months yet this was considerably faster than overland travel, which could take as long as a year. Despite the peril of pirate attacks and shattering storms, sea tradel expanded and eventually overshadowed caravan trade.Silk road not even a road, not any direct path but a number of different paths from China to Rome – 4000 miles. Red: land routes Blue – sea routes Link China to Rome (located inItaly)Persia called Iran Arabia called Saudi ArabiaSomalia is referred to as the “worlds most neglected crisis”Java remains part of IndonesiaThe Chinese began trading silk internally, within the empire. It opened somewhere in 206 BCE. China maintained its virtual monopoly over silk for another thousand years. Called silk road because so much silk was sold on it but also it was for travel, and sale of other products. The Silk Road was miles long, spanning from and connection China, Central Asia, Northern India, and the Parthian and Roman Empires. It connected the Yellow River Valley to the Mediterranean Sea and passed through places such as Chinese cities Kansu and Sinkiang and present-day countries Iran, Iraq and Syria. Indians in the Ganges River valley played the role of the Middlemen. This helped to increase the Han expansion into Central Asia. The Silk Road's Decline By 760 AD, during the T'ang Dynasty, trade along the Silk Road had declined.The Chinese used silk to trade for medicines, perfumes, and slaves as well as rare stones. As overland trade became increasingly dangerous, and overseas trade became more popular, trade along the Silk Road declined. While the Chinese did maintain a silk-fur trade with the Russians north of the original Silk Route, by the end of the fourteenth century, trade and travel along the road had decreased.FYI: Umbrella developed by Chinese from oiled paper because it repelled the water.The intention of the new trade routes, like the Silk Road, was to create a means of transportation for goods between lands. However, not only did these new trade routes supply new products to areas, but also unknown diseases. Eurasian Empires brought diseases east, and the Chinese brought devastating diseases west. The most commonly known disease brought to Europe because of trading, is the “Black Death.” from China to Europe.” The plague quickly spread throughout Europe, devastating the populations of the nations. On a website, Medicine Net, they say that the 1300s Black Death “killed approximately one-third (20-30 million) of Europe’s population.”Oriental rat fleas from infected rats were the means of transportation for the plague. However, this is not the only reason that it spread at such high rates; living conditions during the Middle Ages were not the best, just as the disposal of bodies was not the sanitary. Therefore, due to the improper disposal of the infected deceased, the plague was able to spread to the greater public. TheMedicine Net website lists the symptoms that the people would have faced as “bleeding below the skin which darkened (“blackened”) their bodies” hence the nickname the Black Death, and it was “characterized by gangrene of the fingers, toes, and nose.”In addition, because the plague also infected the farmers, there were great food shortages for those left uninfected by the plague. There was no one to harvest the crops, so whole crops were lost. However, according to the Strayer text, “some among the living benefited. Tenant farmers and urban workers, now in short supply, could demand higher wages or better terms.” Thus, following the epidemic, people faced inflated prices for common necessities.Although the new trade routes created cross-cultural trade of goods and religions, they also traded diseases. These were diseases that people were not prepared for, and yet the trading continued and still continues to this day.Extent of Silk Route/Silk Road. Red is land route and the blue is the sea/water route (4,000 miles) 206 BCEVideo: The Silk Road Video: Silk Production
14 MYTH OR FACT?Some believe that the nursery rhyme "Ring around the Rosie" refers to the Black Plague"Ring around the Rosie" - red sores on the body - first signs of infection"Pocket full of Posies" - some used herbs, flowers etc. to show others they were infected, so people could stay away"Ashes Ashes" - the bodies of the infected were burned after death"We all Fall down" - it was believed that the Black Death was the end of the world.
15 AMBER TRADE ROUTE AMBER ROAD Trade of Amber started in New Stone Age 40-60M years agoAmber is a preserved resin that embalms dust, rock sand, insects, flowers, etcPrized jewelry todayThe Amber Room - YouTubeBaltic amber is approximately million years old Not a true gemstone, it’s a fossilized tree resin Orange yellow color It is a color used in automobile signal lamps. Today still used basically for residential wealthy alongtrade in amber started as early as in New Stone Age. Amber is the preserved resin of prehistoric trees that grew tens of millions of years ago. amber trade prospered and a number of trade routes emerged. We don't exactly know when the "Amber Road" was established, but findings from prehistoric times prove that trade along this corridor existed long before Roman times. Near the mouth of the Morava River, the Amber Road traversed the Danube.Inclusions in amber are classified as anything that is embalmed (preserved) in the hardened resin. Examples include:Inorganic matter such as dust particles, rocks and sandMicroscopic organisms including bacteriaBotanical matter such as flowers, leaves and barkInsects and beetlesOrganic debris such as feathers and hairsSmall animals such as scorpions and lizards (these are extremely rare)The collecting of amber can be traced to prehistoric times, with raw pieces (uncarved) being found in various caves across Europe. Ornaments such as beads have been dated back to 11,000BC, while more complex objects such as amulets have been traced to 7000BC.Despite these occurrences, the trade of amber is not believed to have been significant until 3000BC and it was during the Bronze Age that the amber trade routes were established.Amber was significant to many cultures, with the ancient Greeks, Egyptians, Romans and North American Indians holding it in high esteem.Many such cultures believed the object to be the product of a god and also to have medicinal properties, thus it was an important item of trade. Over time, amber has become a valued object merely due to its aesthetic qualities and nowadays is valued amongst collectors, artists and jewellers alike.Amber, obtained in major excavation centers on eastern Baltic Coast began to spread in central Europe reaching even Egypt. Baltic amber beads were found in BC pharaoh tombs. In the 1st - 3rd centuries there was an intensive trade in amber with Roman Empire and its colonies and this led to the formation of so called "amber road". In the 12th century crusaders began their attacks on the Baltic Coast settlements with the time monopolized amber excavation and most of amber processing and trade.The most fantastically beautiful use of Amber in history was the creation of "The Amber Room" in Catherine the Great's Russian Palace. Imagine if you can an entire room decorated with panels of cut amber, gold, Venetian mirrors, Florentine mosiacs worked in Amber, wood and mother-of-pearl inlay floors--all of it lit by candlelight.As early as the 19th century, huge fines and executions were levied against those who hide even small amounts of amber.
16 APPIAN WAY, EGNATION WAY APPIAN WAY AND EGNATION WAYFormed GREAT EAST ROADSea and land routes that connected the Roman Empire and the Middle East. It is said to have been constructed to more efficiently move people and armies throughout the Roman Empire (2ND CENTURY B.C.)APPIAN WAY, EGNATION WAYAppian way (built 312 BC)350 miles longMain sea routeEgnation Way (built 145 BC)696 miles longMajor land routeFacts about Roman Roads:Most ran in straight linesWere constructed of stone, concrete or pebbles in mortarMain purpose: military and move people more efficientlyAppian Way – 350 miles long, first long road built (mean sea route) Considered most important road in the world – led straight to Rome. Major attraction when in Rome.chief highway from Roman Empire to Middle EastThe time: 312 B.C. Connected Rome to ItalyIt is said: When the Romans finally suppressed the slave revolt led by Spartacus 71 BC, 6000 crucifixes were raised along the Appian Way all the way to Capua from Rome.Egnation Way – 696 miles Built in 145 B.c.(main land route)Back in the times of Alexander the Great (and other conquerors) Everyplace they took over they would build streets and roads. they would always have a road leading to their capitol (or a road leading to a road going there, you know what i mean) for tax reasons and so that people would remember who was in charge.A 4-lane suspension bridge now runs parallel to the Egnation Way. Since Rome took over most of Europe, for a while most roads really did "Lead to Rome
17 “Spice and Incense Road” Incense – perfume orpowerful aromaCamel-driven caravans traced a 1,500 mile route between India and Egypt to trade in exotic frankincense, myrrh, sandalwood and rare spices. This fabled passage would become forever known as the Spice & Incense RoadTurkeySyriaLebanonIsraelJordan(IRAQ)IraqEgyptIran (Persia)SaudiArabiaSudanSaudi ArabiaEgyptCircle is Suez canalIncense created at beginning of time – founding of fire millions of years ago. Mesopotamia once consumed parts of Turkey, Iran, Iraq, and syria. Mesopotamia is Iraq; Persia is Iran;Think perfume or powerful aroma when think of incense. It has been around since the dawn of human history. With the discovery of fire, our ancestors could smell the aroma when burnt. (certain cedars, flowers, bark, produced a pleasing smell) The Incense Road was a trade route that, as you may have guessed, was largely used for transporting incense. It stretched from india to the Meditteranean by taking a land route over Arabia because the Red Sea was considered very dangerous for travel due to shallow waters, uncharted rocks, and pirates. (At its height, 3000 ton of incense were transported per year)Mesopotamia is now called Modern Iraq. The increasing demand for spices and perfumes in the ancient world led to the development of an extensive network of trade routes, connecting the West to the East by land and by sea. These routes connected India and Arabia to Mesopotamia, Syria, Israel, Egypt, Greece and Rome.The transportation of the merchandise followed several routes, depending on where the end destination was and corresponding to the level of security they offeredSudan
19 MAJOR OIL CHOKE POINTS, OIL FLOWS, & PIPELINES Chokepoints Remain Vulnerable10 vulnerable points along the supply chain or “choke” points where disruptioncould interrupt a substantial volume of oil flow. About 55 million b/d or 64% ofthe world’s total oil flows through these pointsPublished January 4, 2009In the first few days of 2008, the price of oil passed $100 a barrel on its way to a high of $147—resulting in record prices at the pumps and a feverish demand for smaller fuel-efficient cars such as hybrids. The global downturn in the economy in the second half of the year simultaneously cut oil prices by $100, and sliced interest in hybrids and other energy-saving alternatives. Americans drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the previous year, according to the US Department of Transportation.In a case of déjà vu, oil prices climbed 23 percent last week, the first few days of 2009.While most forecasters expect oil to remain in the $50 to $60 range for 2009, the world’s oil supply is no less vulnerable—and perhaps even more susceptible—to geopolitical forces than it was before the financial meltdown. Last week’s upturn in oil prices were attributed to Israeli attacks in Gaza, a natural gas dispute between Russia and Ukraine, and OPEC’s announced production cuts.Vulnerabilities are most prevalent in the world’s six major oil transit chokepoints—where the threat of terrorist attack, theft from pirates, political unrest, and shipping accidents post real dangers. More than 40 billion barrels of oil are shipped every day along these narrow channels. A single incident in one of these locations could immediately wake American consumers up from the current lull in prices—and disrupt a sense of complacency about the real costs of filling up our cars and trucks."The global oil market is very vulnerable to potential supply disruptions, given that reserves are heavily concentrated among a handful of major producers and consuming centers are often far from producing basins. In this report, we identify 10 vulnerable points along the supply chain or 'choke' points where disruption could interrupt a substantial volume of oil flow. About 55 million b/d or 64% of the world’s total oil flows through these points, with the top three alone accounting for 46% of the total supply. For each choke point, we provide an assessment of its potential impact on the global oil trade and the possible threat it currently faces.- Crude oil production and reserve are heavily concentrated among a handful of major producers and regions. In 2006, the Middle East accounted for 62% of the world’s identifiable proved liquid reserves and 31% of the output. Eight of the top 10 producers are net oil exporters that collectively supply roughly 29 million b/d of crude oil and petroleum products to the rest of the world, or 34% of the global oil demand.- Major oil producing basins are often located far away from the consuming centers. Seven of the world’s 10 largest consuming countries lack sufficient oil production capacity to meet their internal consumption and report a total deficit of about 30 million b/d, or more than 35% of the world’s demand. According to BP Statistical Review of World Energy, the petroleum market’s average physical trading volume between major regions exceeded 52 million barrels per day in 2006, or approximately $1.7 trillion a year in today’s price levels.- Choke points: Straits of Hormuz, Strait of Malacca, Abqaiq processing facility, Suez Canal, Bab el-Mandab, Bosporus/Turkish Straits, Mina al-Ahmadi terminal (Kuwait), Al Basrah oil terminal (Iraq), LOOP (United States), Druzhba pipeline (Russia)."
20 Links Mediterranean Sea to Red Sea 14% of world shipping SUEZ CANAL1869 Located in Egypt (120 mi.)Links Mediterranean Sea to Red Sea14% of world shipping2010—can accommodate Suezmax tankersSUMEDPipeline alternative to for cargos too large for Canal.Closure of the Suez Canal and SUMED Pipeline--add 6,000 miles of transit around tip of Africa, Cape of Good HopeStrait of GilbraltarMediterranean SeaSuez CanalPersian GulfRed SeaCape of Good HopeSUMED PipelineSuez canal located in Egypt actually separates Africa from Asia built by French and British engineers. Opened in Links Mediterranean Sea to Red Sea. The canal allows boats/ships to travel from Europe to Asia without having to go the way around Africa. It was built to go from Egypt to the Indian Ocean About 15,000 ships pass through the canal each year, which is about 14% of world shipping. Each ship takes up to 16 hours to cross the canalPiracy rampant as shipped exit Canal.Shippers are avoiding the canal following the capture by Somali pirates of a Saudi Arabian supertanker loaded with $100 million worth of oil in November channel accommodates what is known as the Suezmax, which is almost exclusively tankers and has a width of up to 151-feet and 150,000 tons. The existing width can accommodate a vessel of up to 230-feet, but there are few tankers that meet this criterion and can fit within the depth. However, improvements that were completed in 2010 increased the depth to 66-feet. The improvements allow supertankers to pass through.Sumed (suez –mediterranean) Closure of the Suez Canal and the SUMED Pipeline would divert oil tankers around the southern tip of Africa, the Cape of Good Hope, adding approximately 6,000 miles to transit, increasing both costs and shipping time. According to a report released by the International Energy Agency (IEA), shipping around Africa would add 15 days of transit to Europe and 8-10 days to the United States.SUMED PipelineThe 200-mile long SUMED Pipeline, or Suez-Mediterranean Pipeline provides an alternative to the Suez Canal for those cargos too large to transit the Canal (laden VLCC's and larger). The pipeline has a capacity of 2.3 million bbl/d and flows north from Ain Sukhna, on the Red Sea coast to Sidi Kerir on the Mediterranean. The SUMED is owned by Arab Petroleum Pipeline Co., a joint venture between the Egyptian General Petroleum Corporation (EGPC), Saudi Aramco, Abu Dhabi's National Oil Company (ADNOC), and Kuwaiti companies. pipeline located in Egypt—owned in partnership with Saudi Arabia and a few others. Suez not wide enough for large ships so build pipline to transport oil from Persian Gulf area to Mediterranean. Semds about 2.5B gallons of oil through a day. It is 200 miles long.
21 Only sea passage from the Persian Gulf to the open ocean. One of world's most strategically-important chokepoints.20% (16-17M barrels) of the world's petroleum passes through the strait.Majority of oil exported through the Strait of Hormuz travels to Asia, the United States and Western Europe.STRAIT OF HORMUZStrait of HormuzThe Strait of Hormuz is by far the world’s most important chokepoint with an oil flow of 16 to 17 million barrels per day—roughly 20 percent of oil traded worldwide. At its narrowest point the Strait is 21 miles wide, and the shipping lanes consist of two-mile-wide channels. The majority of oil exported through the Strait of Hormuz travels to Asia, the United States and Western Europe. On average, 15 crude oil tankers pass through the Strait of Hormuz every day. In June 2012, Saudi Arabia reopened the Iraq Pipeline through Saudi Arabia (IPSA), which was confiscated from Iraq in 2001 and travels from Iraq across Saudi Arabia to a Red Sea port. It will have a capacity of 1.65 million barrels per day.In July 2012, the UAE began using a new pipeline from the Habshan fields in Abu Dhabi to the Fujairah oil terminal on the Gulf of Oman, effectively bypassing the Strait of Hormuz. It was constructed by China and will have a maximum capacity of around 2 million barrels per day, over three-fourths of the UAE's 2012 production rate. The UAE is also increasing Fujairah's storage and off-loading capacities.[On the 27th of December 2011, Iranian Vice President Mohammad-Reza Rahimi threatened to cut off oil supply from the Strait of Hormuz should economic sanctions limit, or cut off, Iranian oil exports. A U.S. Fifth Fleet spokeswoman said in response that the Fleet was "always ready to counter malevolent actions", whilst Admiral Habibollah Sayari of the Iranian navy claimed that cutting off oil shipments would be "easy". Despite an initial 2% rise in oil prices, oil markets ultimately did not react significantly to the Iranian threat, with oil analyst Thorbjoern Bak Jensen of Global Risk Management concluding that "they cannot stop the flow for a longer period due to the amount of U.S. hardware in the area".On the 3rd of January 2012, Iran threatened to take action if the U.S. Navy moves an aircraft carrier back into the Persian Gulf. Iranian Army chief Ataollah Salehi said the United States had moved an aircraft carrier out of the Gulf because of Iran's naval exercises, and Iran would take action if the ship returned. "Iran will not repeat its warning...the enemy's carrier has been moved to the Gulf of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf", he said.The U.S. Navy spokesman Commander Bill Speaks quickly responded that deployment of U.S. military assets would continue as has been the custom stating: "The U.S. Navy operates under international maritime conventions to maintain a constant state of high vigilance in order to ensure the continued, safe flow of maritime traffic in waterways critical to global commerce."While earlier statements from Iran had little effect on global oil markets, coupled with the new sanctions, these terse comments from Iran are driving crude futures higher, up over 4%. Pressure on prices reflect a combination of uncertainty driven further by China’s recent response – reducing oil January 2012 purchases from Iran by 50% compared to those made in 2011.The U.S. led sanctions may be “beginning to bite” as Iranian currency has recently lost some 12% of its value. Further pressure on Iranian currency was added by French Foreign Minister Alain Juppé who was quoted as calling for more "strict sanctions" and urged EU countries to follow the US in freezing Iranian central bank assets and imposing an embargo on oil exports.On the 7th of January 2012, the British government announced that it would be sending the Type 45 destroyer HMS Daring to the Persian Gulf. Daring, which is the lead ship of her class is one of the "most advanced warships" in the world, and will undertake its first mission in the Persian Gulf. The British Government however have said that this move has been long-planned, as Daring will replace another Armilla patrol frigate.On the 9th of January 2012, Iranian Defense Minister Ahmad Vahidi denied that Iran had ever claimed that it would close the Strait of Hormuz, saying that "the Islamic Republic of Iran is the most important provider of security in the strait... if one threatens the security of the Persian Gulf, then all are threatened."The Iranian Foreign Ministry confirmed on the 16th of January 2012 that it has received a letter from the United States concerning the Strait of Hormuz, “via three different channels.” Authorities were considering whether to reply, although the contents of the letter were not divulged. The United States had previously announced its intention to warn Iran that closing the Strait of Hormuz is a “red line” that would provoke an American response. Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, said this past weekend that the United States would “take action and re-open the strait,” which could be accomplished only by military means, including minesweepers, warship escorts and potentially airstrikes. Defense Secretary Leon E. Panetta told troops in Texas that the United States would not tolerate Iran’s closing of the strait. Nevertheless Iran continued to discuss the impact of shutting the Strait on world oil markets, saying that any disruption of supply would cause a shock to markets that “no country” could manage.By the 23rd of January, a flotilla had been established by countries opposing Iran's threats to close the Hormuz Strait. These ships operated in the Persian Gulf and Arabian Sea off the coast of Iran. The flotilla included two American aircraft carriers (the USS Carl Vinson and USS Abraham Lincoln) and three destroyers (USS Momsen, USS Sterett, USS Halsey), seven British warships, including the destroyer HMS Daring and a number of Type 23 frigates (HMS Westminster, HMS Argyll, HMS Somerset and HMS St Albans), and a French warship.On the 24th of January tensions rose further after the European Union imposed sanctions on Iranian oil. A senior member of Iran's parliament said that the Islamic Republic would close the entry point to the Gulf if new sanctions block its oil exports. "If any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad Kossari, deputy head of parliament's foreign affairs and national security committee, told the semi-official Fars News Agency.It is disappointing but not surprising that two days of negotiations this week failed to produce any real progress toward curbing Iran’s nuclear program. Iran, always playing the angles, is still trying to figure out how much economic pain it is willing to accept to maintain its nuclear ambitions and what, if anything, it is willing to give upIt is in the interest of the United States and its allies to keep talking, especially since a new round of sanctions are scheduled to go into effect. On June 28, the United States can start barring foreign banks doing oil-related business with the Central Bank of Iran from access to the American financial market. Starting on July 1, all members of the European Union will be prohibited from buying oil from Iran and insurance for ships that carry Iranian oil.The meetings in Moscow were the third in a series involving Iran and the United States, Russia, China, France, Britain and Germany. To avoid a collapse in talks, they agreed that lower-level experts will meet on July 3.The goal has to be to shut down all of the program that gives Iran the capability to build a bomb. The United Nations Security Council ordered that all enrichment should be ended six years ago, but the major powers were right to start the talks with a more short-term goal: to stop the most dangerous kind of enrichment.Negotiators offered fuel for a medical reactor and aircraft replacement parts if Iran agreed to stop enriching uranium to 20 percent purity — near bomb grade — send its stockpile out of the country for fabrication into fuel rods and shut the underground facility at Fordo where the 20 percent enrichment is taking place.Iran hinted in Moscow that it might limit enrichment to below that level but wanted more relief from sanctions and for the major powers to declare that it has a right to enrich uranium. The major powers say Iran will have that right if it proves it is not building a weapon.We don’t know if any mix of diplomacy and sanctions will persuade Iran to give up its ambitions. But there is no quick military fix. Even a sustained air campaign would likely set Iran’s nuclear program back only by a few years and would rally huge sympathy for Tehran both at home and abroad. The current international consensus for sanctions, and the punishments, would evaporate.That hasn’t stopped American politicians from both parties from posturing on the issue. Before the Moscow talks, 44 Republican and Democratic senators sent President Obama a letter demanding that he abandon negotiations if there were no Iranian concessions.The critics neglect to mention that Iran’s program grew significantly when George W. Bush was president and opportunities were lost to constrain it at a much lower level. No president has been as successful as Mr. Obama in rallying the major powers to impose sanctions with bite. These are the first serious nuclear talks in years, and there is still time to let them run.
22 Links Indian and Pacific Oceans. The Strait of MalaccaLinks Indian and Pacific Oceans.Shortest sea route between Middle East and growing Asian markets.Carries about one-quarter of world's traded goods (oil, Chinese manufactures, Indonesian coffee.)¼ of all oil carried by sea passes through the strait to Asian markets (China, Japan, and South Korea.)1.7 miles at narrowest point, creating a natural bottleneck.Piracy, including attempted theft and hijackings, is a constant threat to tankers in the Strait of Malacca.It is disappointing but not surprising that two days of negotiations this week failed to produce any real progress toward curbing Iran’s nuclear program. Iran, always playing the angles, is still trying to figure out how much economic pain it is willing to accept to maintain its nuclear ambitions and what, if anything, it is willing to give upIt is in the interest of the United States and its allies to keep talking, especially since a new round of sanctions are scheduled to go into effect. On June 28, the United States can start barring foreign banks doing oil-related business with the Central Bank of Iran from access to the American financial market. Starting on July 1, all members of the European Union will be prohibited from buying oil from Iran and insurance for ships that carry Iranian oil.The meetings in Moscow were the third in a series involving Iran and the United States, Russia, China, France, Britain and Germany. To avoid a collapse in talks, they agreed that lower-level experts will meet on July 3.The goal has to be to shut down all of the program that gives Iran the capability to build a bomb. The United Nations Security Council ordered that all enrichment should be ended six years ago, but the major powers were right to start the talks with a more short-term goal: to stop the most dangerous kind of enrichment.Negotiators offered fuel for a medical reactor and aircraft replacement parts if Iran agreed to stop enriching uranium to 20 percent purity — near bomb grade — send its stockpile out of the country for fabrication into fuel rods and shut the underground facility at Fordo where the 20 percent enrichment is taking place.Iran hinted in Moscow that it might limit enrichment to below that level but wanted more relief from sanctions and for the major powers to declare that it has a right to enrich uranium. The major powers say Iran will have that right if it proves it is not building a weapon.We don’t know if any mix of diplomacy and sanctions will persuade Iran to give up its ambitions. But there is no quick military fix. Even a sustained air campaign would likely set Iran’s nuclear program back only by a few years and would rally huge sympathy for Tehran both at home and abroad. The current international consensus for sanctions, and the punishments, would evaporate.That hasn’t stopped American politicians from both parties from posturing on the issue. Before the Moscow talks, 44 Republican and Democratic senators sent President Obama a letter demanding that he abandon negotiations if there were no Iranian concessions.The critics neglect to mention that Iran’s program grew significantly when George W. Bush was president and opportunities were lost to constrain it at a much lower level. No president has been as successful as Mr. Obama in rallying the major powers to impose sanctions with bite. These are the first serious nuclear talks in years, and there is still time to let them run.
23 With the Panama Canal increasing in size to accommodate Suezmax” ships – it could be a great thing for American agriculture, especially since 60% of our exports currently travel through the Panama Canal. Located in PanamaConnects the Pacific Ocean with the Caribbean Sea and Atlantic Ocean.14,000 vessels transit the Canal (60% headed to and from United States.Closure would greatly increase transit times and costs adding over 8,000 miles of travel.Vessels would have to reroute around Cape Horn located at the tip of South America.Canal widened to accommodate Panamax ships.Ship Canal, Panama Canal located in Panama between Costa Rica and Columbia. Open for business We had an 85 year agreement with Panama at which time in 1999 Panama owed canal but jointly protected.Joins Atlantic and Pacific Ocean and Caribbean Sea through isthmus of Panama.the canal made possible easy shipping between the two oceans, more than cutting in half the long Cape Horn route around the southernmost tip of South America. Its major economic impact was in integrating the U.S. West Coast and Pacific countries more into the world economy.Connects the Pacific Ocean with the Caribbean Sea and Atlantic Ocean.The Canal is 50 miles long, and now 135 feet wide at its narrowest point to accommodate “suezmax” ships.14,000 vessels transit the Canal annually, of which more than 60 percent (by tonnage) are for traffic to and from the United States.Closure of the Panama Canal would greatly increase transit times and costs adding over 8,000 miles of travel. Vessels would have to reroute around the Straits of Magellan, Cape Horn and Drake Passage over the tip of South America.Roughly one-fifth of the traffic through the canal (measured by both transits and tonnage) was by tankers.Relevance of the Panama Canal to the global oil trade has diminished, as many modern tankers are too large to travel through the canal.Cape Horn
24 LOOP Louisiana Offshore Oil Port 1972 owned by Shell and MarathonHandles 13% (1.2M/d of nation's foreign oil import and domestic crude.Operates the only offshore oil port in the nation where supertankers can directly offload their cargoes of crude oil.Located in Gulf of Mexico, 20 mi. south of Grand Isle, Louisiana.The U.S. imports more than 50 percent of its daily crude oil requirements, and LOOP plays a key role in meeting those needs through our distribution and shipping capabilities. Over the last three decades, LOOP has handled more than 11 billion barrels of foreign and domestic crude oil into the U.S. LOOP has shown itself to be a safe and efficient partner for the delivery of large volumes of crude oil. LOOP operates the only offshore oil port in the nation where supertankers can directly offload their cargoes of crude oil. Located in the Gulf of Mexico, 20 miles south of Grand Isle, Louisiana, the LOOP Marine Terminal stands in 110 feet of water, where domestic and international tankers can safely moor and transfer crude oil at rates up to 100,000 barrels per hour.The Louisiana Offshore Oil Port (LOOP) is a deepwater port in the Gulf of Mexico off thecoast of Louisiana near the town of Port Fourchon. LOOP provides tanker offloading andtemporary storage services for crude oil transported on some of the largest tankers in theworld. Most tankers offloading at LOOP are too large for U.S. inland ports. MarathonPipe Line LLC, Murphy Oil Corporation, and Shell Oil Company are LOOP's owners.Description:Tankers offload at LOOP by pumping crude oil through hoses connected to aSingle Point Mooring (SPM) base that is sitting in water depth of 115 feet, enough toaccommodate the world’s biggest oil tankers, which require water depths of up to 85 feet.Three SPMs are located 8,000 feet from the Marine Terminal. The SPMs are designed tohandle ships up to 700,000 deadweight tons. The crude oil then moves to the MarineTerminal (Fourchon Booster Station) via a 56-inch diameter submarine pipeline. TheMarine Terminal consists of a control platform and a pumping platform. The controlplatform is equipped with a helicopter pad, living quarters, control room, vessel trafficcontrol station, offices and life support equipment. The pumping platform contains four7,000-hp (5.22 MW) pumps, power generators, metering and laboratory facilities.Crude oil is handled only on the pumping platform where it is measured, sampled, andboosted to shore (Clovelly Dome Storage Terminal) via a 48-inch diameter pipeline.Fourchon Booster Station is located just on-shore in Fourchon and Clovelly Dome StorageTerminal located 25 miles inland near Galliano, Louisiana. The Fourchon Booster Stationhas four 6,000-hp (4.47 MW) pumps that increase the pressure and the flow rate to theClovelly Dome Storage Terminal. A submarine pipeline moves crude oil to Clovelly,Louisiana, where LOOP maintains eight underground salt caverns capable of storing up to50 million barrels of crude oil as temporary storage before the oil is shipped to the variousrefineries.Oil FlowsLOOP handles 13% of the nation's foreign oil import, about 1.2 million b/d. It isconnected via pipeline to 35% of the U.S. refining capacity.In 1996, one cavern was dedicated to the MARS stream coming in from the deepwaterGulf of Mexico. The MARS crude oil system uses the same distribution system used by theforeign barrels. In addition, LOOP has an above-ground tank farm consisting of six600,000 barrel tanks.Four pipelinesconnect the onshore storage facility to refineries in Louisiana and along theGulf Coast. LOOP also operates the 53-mile, 48-inch LOCAP pipeline that connects LOOPto CAPLINE at St. James, Louisiana. CAPLINE is a 40-inch pipeline that transports crude oilto several Midwest refineries (which is the largest pipeline system delivering crude oil fromthe Gulf Coast to the Midwest). Including Capline, LOOP is connected to more than 50%of the U.S. refinery capacity and has offloaded over 7 billion barrels of foreign crude oilsince its inception.Crude oil production and imports that are not sent to other states are processed atLouisiana’s 16 operating refineries, clustered mostly along the Lower Mississippi River andin the Lake Charles area. With a refining capacity of more than 2.5 million barrels perday, Louisiana produces more petroleum products than any state but Texas. The U.S. imports more than 50 percent of its daily crude oil requirements and LOOP, the Louisiana Offshore Oil Port, plays a key role in meeting those daily energy needs. LOOP has offloaded over eleven billion barrels of foreign and domestically produced crude oil since its inception. We are the single largest point of entry for crude oil coming into the U.S. LOOP receives and temporarily stores crude oil supplies from two sources:Tankers carrying foreign crude oilDomestic crude oil produced in the Gulf of MexicoLOOP was organized in 1972 as a Delaware corporation and converted to a limited liability company in Marathon Pipe Line LLC, Murphy Oil Corporation, and Shell Oil Company are the owners of LOOP. LOOP is the only port in the U.S. capable of offloading deep draft tankers known as Ultra Large Crude Carriers (ULCC) and Very Large Crude Carriers (VLCC). Along with offloading crude from ULCCs and VLCCs, LOOP also offloads smaller tankers. The port consists of three single-point mooring buoys used for the offloading of crude tankers and a marine terminal consisting of a two-level pumping platform and a three-level control platform. The onshore oil storage facility, the Clovelly facility twenty-five miles inland, is connected to the port complex by a 48-inch diameter pipeline. The Clovelly facility provides interim storage for crude oil before it is delivered via connecting pipelines to refineries on the Gulf Coast and in the Midwest. The oil is stored in eight underground caverns leached out of a naturally occurring salt dome, which are capable of storing approximately 50 million barrels of crude oil (a barrel of oil is equal to 42 U.S. gallons). Since 1996, one cavern has been dedicated to the Mars stream coming in from the deepwater Gulf of Mexico, which uses the same distribution system as foreign sources. In addition, LOOP has an above-ground tank farm consisting of twelve 600,000 barrel tanks. Four pipelines connect the onshore storage facility to refineries in Louisiana and along the Gulf Coast. LOOP also operates the 53-mile, 48-inch LOCAP pipeline that connects LOOP to Capline at St. James, Louisiana. Capline is a 40-inch pipeline that transports crude oil to several Midwest refineries.
25 KEYSTONE PIPELINE 2005—Pipeline for oil proposed from Canada to U.S. Plus: 20,000 high paying jobs along pipelinePlus: Injects $20B into U.S. economyOops—one of largest freshwater reserves in world atSand Hills, Nebraska close to pipeline.Obama—in nation’s best interest to wait til 20132012 update: rerouting pipeline in Nebraska if approved in early 2013In 2005 TransCanada proposed a project involving transporting oil from Canada to U.S. Under forest in northerb Alberta, Canada lies world’s largest deposit of “tar sands, sand nixed with thick tar-like oil. To produce one barrel of heavy crude oil from tar sands requires strip mining forest, extracting four tons of earth, contaminating 2 to 4 barrels of fresh water, burning large amounts of natural gas, and creating vast holding pounds of toxic sludge. Pipeline 2000 miles long from Hardistry, Alberta through Saskatchewan, Montana, South Dakota, Nebraska, Kansas and Oklahoma to terminals in Nederland, Texas on Gulf of MexicoTar sands are heated to 150 degrees as pumpled throug at high pressure to refineries in U.Sl.Environmentalists left it would pollute air and water and runs to close to one of largest freshwater reserve in world. What is oil leaks—public water supplies , crop lands, wildlife habitats and recreational areas will be at risk not to mention release of toxic chemicals when refined in U.S. and emits significantly more global warming pollutants into atmosphere than fuels from conventional oil.Discussion with TransCanada over rerouting while still staying in Nebraska yet alternatives to Sandhills and reduction in pipeline mileage.
26 Final Frontier: The Northern Sea Route New shipping route only open a few months a year?Could it save time and money?A graphical comparison between the North East Passage (blue) and an alternative route through Suez Canal (red)Gains from shipping on an ice-free Northern Sea Route would be reduced number of days at sea and more than a doubling of the vessel fuel efficiency if shipping from northern European to northern Pacific ports. For the corporate players in bulk shipping of relative low value raw materials, cost savings for fuel may appear as a driver to explore the Northern Sea Route for commercial transits, and not necessarily reduced lead time. The Northern Sea Route allows economies of scale compared to coastal route alternatives, with vessel draught and beam limitation. Environmental demands faced by the maritime shipping industry may emerge as one of the drivers for developing the Northern Sea Route. Increased knowledge about environmental benefits and costs for both the Northern Sea Route and Suez routes will probably be important factors in this respectSought after by polar explorers and long awaited by the shipping community: The Northern Sea Route. Year by year the Arctic summer ice cap is melting and the race will be soon be on to take part in what is perhaps the last and final adventure in the development of maritime logistics and global shipping lanes. In The Northern Sea Route versus the Suez Canal: cases from bulk shipping, two colleagues of mine, Halvor Schøyen and Svein Bråthen, explore the potential opportunities and possible risks of what is a new shortcut between Europe and Asia. While this additional shipping route may give more flexibility, it is also a highly seasonal and highly uncertain route. Having said that, it is also a route that could be highly profitable.Shorter, faster…better?Why is the Northern Sea Route so important? Looking at this map of global shipping lanes, the answer is obvious and simple: The navigation distance from a port in Northwest-European to a port in the Far East much shorter compared to the route via the Suez Canal, and obviously, this shorter distance not only saves fuel, it will also allow a vessel to make more trips and carry more goods over the same time it would have taken it to go via Suez. The table below compares some of the major routes:Establishing the Northern Sea Route as an alternative shipping route to Suez and Cape of Good Hope could contribute to more flexible, agile and adaptable supply chains, because more route choices will result in a higher capacity, and may reduce chances for disruption and congestion.This is reiterated in one of their three research questionsDoes the Northern Sea Route, as a possible complementary route to Suez, represent an opportunity to improve agility and adaptability in supply chains?Unfortunately, after reading the article, I must say that this one question has only been partially answered. The conclusion does state thatCombined with the fact that added shipping alternatives gives more route alternatives and flexibility, the Northern Sea Route option may possibly increase supply chain agility and adaptabilityA graphical comparison between the North East Passage (blue) and an alternative route through Suez Canal (red)
27 COLD WAR IMPACT ON GLOBALIZATION The main Cold War enemies were the United States and the Soviet Union. The Cold war got its name because both sides were afraid of fighting each other directly. In such a "hot war," nuclear weapons might destroy everything. So, instead, they fought each other indirectly. They played havoc with conflicts in different parts of the world. They also used words as weapons. They threatened and denounced each other. Or they tried to make each other look foolish.The Cold War was a decades-long struggle for global supremacy that pitted the capitalist United States against the communist Soviet Union. Good vs. EvilIn 1961 Berline wall built; 1989 the spontaneous destruction of the Berlin Wall signaled the end of Soviet domination in Eastern Europe, and two years later the Soviet government itself fell from power.Iron Curtain (Winston Churchill coined the term) all of Eastern Europe under communist dictatorship (Bulgaria, Czechoslovakia, Hungary, Poland, Romania, and Yugoslavia. East Germany was also controlled by the Soviet Union) The Cold War also led to significant effects in neighboring countries as well as those far away. Such international crises as the Korean War, the Berlin Blockade, the Vietnam War, the Berlin crisis, and Soviet's invasion of Afghanistan in 1979 were a direct manifestation of the cold war. Quite a number of countries experienced massive losses in wealth and life at such times.The cold war slowed down the travel and trade with parts of the world but never completely stopped it. Even with blockades, sanctions, trade continues – if not legally, then illegally.Increased levels of world trade resulted from the economic growth occurring since the end of World War II in The United States was in the position to take advantage of new trading opportunities as new world markets opened. Developing countries demanded capital goods, agricultural products, consumer goods, and commercial services, which the United States could provide. As these nations produced goods for export, the United States became a market for these goods.27
28 The United States wanted to encourage free trade throughout the world The United States wanted to encourage free trade throughout the world. The Soviet Union wanted to shield off her own sphere from international commerce. Russia feared that trade with the West would involve the risk of Russia being opened to western influences which would have eroded the strength of the totalitarian regime. These differences led to much ill feeling between the United States and the Soviet Union.28
29 ShanghaiSuez CanalPanama CanalSingaporebusiest ports are in the Panama Canal, the Suez Canal, Shanghai and Singapore.Singapore is at the tip of MalaysiaWith 90% of world trade carried by sea, the global network of ships crisIs-crossing the oceans provide perhaps the most important mode of transportation, not only for human mobility and for the exchange of goods, but also for the spread of invasive species that “hitch-hike” with these ships, particularly in the ballast tanks. These invasive species carried along these global shipping lanes are perhaps not so much a risk to the supply chain, but a risk stemming from the supply chain.The worldwide maritime network also plays a crucial role in today’s spread of invasive species.Two major pathways for marine bioinvasion are discharged water from ships’ ballast tanks and hull fouling. Even terrestrial species such as insects are sometimes inadvertently transported in shipping containers. In several parts of the world, invasive species have caused dramatic levels of species extinction and landscape alteration, thus damaging ecosystems and creating hazards for human livelihoods, health, and local economies. The financial loss due to bioinvasion is estimated to be $120 billion per year in the United States aloneA significant factor in the opening of the inland waterway system (and the resultant world trade superiority of the United States) was the advances in ship technology and the application of steam power to ships that traveled the extensive water network. Larger and faster ships emerged from the advances in ship and engine design and improvements in construction materials.Methods of cargo handling evolved to keep pace with the larger vessel sizes. The introduction of palletization and roll-on/roll-off cargoes enabled vessels to be loaded and unloaded in less time. The emergence of containerization in the late 1950s dramatically affected the shipping industry and port infrastructure. The increasing size of containerized cargo vessels became a driving force in the demand for expanded ports and improved facilitiesthe United States was the world's leading trader in 1998, accounting for about one billion tons of ocean-bound trade (about 20 percent of the world's total ocean-bound trade) out of about 2.4 billion tons of total foreign trade. In 2000, according to the U.S. Department of Transportation, approximately $736 billion of goods (about 40 percent of the total U.S. foreign trade by dollar amount) were shipped via ocean vessels and passed through U.S. ports. By 2020, international trade is estimated to more than double (by weight) within the United States, with the majority of this trade projected to move via ocean shipping.Since World War II, approximately 95 percent of all military equipment and material sent to combat and crisis areas was ship cargo transported by ocean vessels. For example, during the Persian Gulf War (1990–1991), nearly all domestic supplies intended for U.S. military forces traveled by ship.Cargo Network -- Nearly 90 percent of worldwide trade is made possible because products and goods are transported over the ocean on ships source:Port of Long Beach: Life of Ocean Container - Learn international shipping & Export Documentation – YouTubeStopping Terrorism - Container Port Security - VOA Story - YouTube