To the uninitiated (which included me at one stage), these industries are same or similar and it might come across that there is no difference between Maritime, Shipping, Freight, Logistics, Supply Chain and Trade. But once you are involved in the business or know about these businesses, you will very soon understand that these are very different industries with different workings, assets, architecture, requiring very different sets of qualifications, experience, expertise, knowledge and attitudes. In this article I unpack the difference between Maritime, Shipping, Freight, Logistics and Supply Chain and how it is all connected, starting with some simple definitions of these terms
Maritime Industry
Anything related to the ocean, sea, ships, navigation of ships from point A to point B, seafarers, ship owning and other related activities.
Shipping Business
The act of carriage of cargo from point A to point using the ships which falls under the Maritime industry.
Freight
The cargo that is carried using the shipping services offered by the shipping lines using the ships which falls under the Maritime industry.
Logistics
The processes involved in getting the cargo from the manufacturers warehouse to the receiver’s warehouse including arranging for shipping services offered by the shipping lines using the ships which falls under the Maritime industry..
Supply Chain
The whole granddaddy process comprising of all aspects in a product cycle, for example from picking of the fruit at a farm in Point A to delivering the fruit to the shelf at a store in Point B using all of the above-mentioned industries, businesses and services
Trade
It is the basic economic concept involving buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties.. Trade is the reason all above businesses from 1-5 exist..
Maritime Industry
It is fair to say that Maritime Transportation has been and still remains the backbone of global trade and has been so since the Egyptians, Greeks, Romans, Arabs, Indians, Chinese, Europeans all started sailing and improvising the sailing methods from sailboats, dhows, long boats, dragon boats, steamships to the current ULCVs, VLOCs, VLCCs etc.
Maritime transportation is a derived demand whose main purpose is to support trade, business and commerce – whether global or domestic, whether cargo or people. An estimated 89.5% of global trade is carried by sea.. As per UNCTAD figures, in 2017, world seaborne trade reached a volume of 10.7 billion tons with a predicted expansion of 3.2% between 2017 and 2022.
Source : UNCTAD
The growth, numbers and the volume involved makes the maritime industry one of the most globalised industries in the world in terms of ownership and operations. Not just in terms of ownership, the Maritime industry also provides employment for an estimated 1.65 million seafarers working in the global merchant fleet across the world. Here are a few stats for you to think of, about the Maritime Industry (all stats shared from UNCTAD):
Which country owns the most number of ships?
China
Which country owns the most number of ships by Deadweight Capacity?
Greece
Top 5 Countries supplying seafarers (Officer Rank)
China, Philippines, India, Indonesia, Russian Federation
Top 5 Countries supplying seafarers (Crew – also known as Ratings)
Philippines, China, Indonesia, Russian Federation, Ukraine.
Shipping
As briefly defined above, Shipping is the act of carriage of cargo from point A to point using the ships which falls under the Maritime industry. Cargoes are carried by various types of ships all around the world.
- Oil Tankers
- Dry Bulk Carriers
- General Cargo Carriers
- Container Carriers
- Gas Carriers
- Chemical Tankers
- Off Shore Vessels
- Ro-Ro ships
- Ferries/Passenger Ships
- Others
All these ships are operated by shipping lines for commercial gain.. A lot of these ships are owned by the shipping lines operating them and a lot of them are chartered by the shipping lines from the ship owners.
