Answer to Question #56824 in Economics for George

Question

“Shipping is perhaps the most international of all the world’s great industries – and one of the most dangerous. It has always been recognised that the best way of improving safety at sea is by developing international regulations that are followed by all shipping nations.” (IMO 2014)
Examine the case for strong regulation in the freight market.

Answer 1

Regulations concerning shipping are developed at the global level. It is vital that shipping is subject to uniform regulations on matters such as construction standards, navigational rules and standards of crew competence, according to the international importance of shipping at all. Conflicting national regulations can result in commercial distortion and administrative confusion which would compromise the efficiency of world trade. Transport costs, especially port efficiency, have increased their relative importance as a barrier to trade. Significant improvements in shipping at all can be made after the technical efficiency of ports is increased. That's why the international regulation should be introduced to improve shipment and make it more efficient.