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Transport Techniques and Management
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Discuss the main challenges for container shipping companies today. Potential area to discuss includes competition from other modes, competition between shipping lines, capacity, investment, port access etc.
Discuss each challenge in turn and provide actual examples of how shipping companies are overcoming some of these challenges.
Please use some real life example to support the judgement. Reference have to use any company literature, newspaper articles and academic journal…etc can be used.
Transport techniques and management
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Transport techniques and management
Introduction
International business is a sector that has seen tremendous growth within the last few years. This is because of the effect globalization has had in addition to the increased trade between regions. As such the increased use of the shipping industry to move commodities has intensified. The importance of the shipping industry can therefore not be overlooked as it plays a critical role in the facilitation of international trade and the global economic growth (Lun et al, 2013).
Despite the critical role the shipping companies play in the maintenance of international trade and the subsequent movement of goods from one jurisdiction to another, there are various challenges that these companies face that have impeded their ability to carry out their mandate efficiently.
Some of the challenges include the lack of uniform legal platform to conduct the shipping business, the presence of various regulations as well as the international rules that hinder the smooth running of the shipping sector, the unsecure environment the companies are forced to operate in, competition from the other modes of transportation and other shipping industries, capacity building in the shipping sector, the lack of investment in this industry due to its vulnerability and the access to the various major and minor ports across the globe in addition to other challenges.
These challenges have impeded the growth of the shipping industry globally hence reduced the capacity to efficiently transport both goods and people across jurisdictions, this is despite being in operation for approximately 60 years (Meersman, Van de Voorde and Vanelslander, 2014).
Legal challenges
The specification of the terms of the agreement between the players in the shipping industry is normally spelt out in the shipping contracts. In this case then, the legal frameworks are usually spelt out. Specifically in terms of the legal provisions that would be used in case of disputes. Despite this reprieve, the difference in the legal obligations with regards to transportation varies per jurisdiction and hence brings confusion in the performance of the contract (Tan and Thai, 2014).
The discord that the legal regimes bring to the shipping sector is made worse by the provisions of the United Nations Commission on International Trade Law Model Law (1985), which despite being enacted to bridge the gap that was created by the domestic law, is not binding to the parties in addition to the call to the parties in that particular contract to adopt the local laws in the resolution of the dispute in article 1. The said law is additionally applicable only in arbitrations. As the main international legal provision for international trade, the lack of binding authority in the application of the same means and the permit and calls to incorporate the domestic laws bring confusion.
The application of the different laws in the shipping industry has caused the lack of stability (Rodemann, Hendrik and Templar, 2014). These legal challenges pose great inhibitions in the growth of the industry as they affect the shipping routes in addition to creating a discord in the relationship between the parties to the shipping contract as to the applicable legal principles (Huang, Lasserre and Alexeeva, 2015).
The use of the Uniform Customs and Practice 600 to try and regulate the financial institutions with regard to international trade is a welcome move. This although only solves part of the problem as commerce forms part of the contract. The resolution of issues such as the period and the place of delivery are still governed by the domestic laws.
It is therefore advisable that in the formation of shipping contracts, all the legal issues be addressed fully, from the mode of payment, place and time of delivery, the duration of the shipping and the laws that will be applicable in case of a dispute this is in addition to the place of resolution of the dispute. This is to reduce the uncertainty as well as the time that may have been used to traverse the various conflicts of laws issues to make the same determination (Johansson and Donner, 2014).
In covering the legal aspects in the shipping contract the legal issues that would have otherwise caused the severance of relations between the parties to the contract would have been saved. In this case, the parties will have their way in making the decision as to the legal regime that would govern their shipping agreement…..
Transport Techniques and Management
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