Obstacles for ocean shipping in developing countries

Quite apart from the effects of shipping upon trade and industry, developing countries have grounds for concern about the level of freight rates, because they bear the freight costs of both their imports and their exports. As freight levels rise they have to pay more for their imports, and at the same time their producers receive less for the goods they sold overseas. High freight levels have an adverse effect upon their balance of payments by causing a reduction in receipts and an increase in payments, and these adverse effects are accentuated if a developing country relies heavily upon the use of foreign vessels. Land-locked countries must add the difficulties and increasing costs of shipping to the costs and difficulties they face in regard to overland transport. The fact that developing countries own less than 10% of tonnage, yet are the major export shippers by volume (over 50%), cannot mean an equitable situation. Yet another obstacle is the ultimate ownership of the exports. Much of it is controlled by transnational corporations who exploit resources but contribute disproportionately small returns to their host countries. Traditional maritime countries with protectionist activities, shipping line conferences and TNCs, make formidable external adversaries; but developing countries also lack capital, infrastructure and a history of mutual cooperation to apply to their ocean transport needs.

The developing countries that gained political independence from the late 1940s onwards found that the system which they had inherited in shipping was traditionally structured on the colonial concepts of keeping them as passive suppliers of raw materials without affording their indigenous interests reasonable opportunities to participate in downstream activities such as transport. As some of these countries established infant manufacturing industries for the purpose of processing their own and imported raw materials into manufactured or semi-manufactured exports, and of taking advantage of relatively low labour rates, costs and difficulties of transport were found to outweigh the labour savings.