Shipping — some political and economic consequences of changes in technology and ownership

Abstract

Abstract Changes in technology and ownership in international shipping are generating economic and political consequences which need consideration by policymakers. These changes are part cause and part consequence of the dramatic growth in world trade until the early 1970s. Introduction of container technology in the 1960s, based on standardization reducing cargo handling time and enabling multimodal services, has been the major change in liner shipping this century. Realization of the gains from scale economies requires cooperation between shipping lines; anti‐monopoly policy should allow for this, not impose blanket regulations. In the bulker and tanker markets, too, new technology and optimistic cargo projections meant heavy investment from the mid‐1960s. The collapse of both markets after the 1973 oil shock brought State support for shipyards, encouraging more containership orders and extending oversupply to containerships. Weak freight rates encouraged Western shipowners to reduce crew costs, often b...