Maritime Trade

What is Maritime Trade?

Maritime trade is the transport of goods overseas between two countries. It is a low-cost, efficient method of transporting items manufactured, grown, or mined from one country to another and is an essential ingredient in the growth of the world’s economy and in developing nations. 

In today’s economy, 80 percent of international trade travels via sea. Nations heavily rely on one another for natural resources, goods, technology, and medicines, making maritime trade the backbone of the global economy. However, because of its integral role in commerce, maritime trade is also a target for terrorism, smuggling, and piracy. 

Which Roles are Involved in Maritime Trade? 

From shippers to regulators, there are a number of different roles involved in maritime trade:

  • Shippers – organizations that need to transport merchandise or equipment from one location to another
  • Carriers the individuals or ships that are involved in transporting merchandise between locations
  • Sourcing Agents individuals that help shippers find a carrier to transport their goods
  • Freight forwarders a company or individual who prepares the documentation and coordinates movement 
  • Government agencies regulatory bodies that oversee shipping and ensure that international and national laws are followed

What is Ship Monitoring?

Maritime trade law has been shaped by a millennia of international commerce. Increased globalization over the last half century, coupled with growth in illegal trafficking activities, have pushed the United Nations to develop a legal framework for global shippers. The International Maritime Organization (IMO) is a specialized agency within the U.N. that works to prevent shipping crime, while supporting the UN’s overall sustainable development goals. 

Ship monitoring takes different forms, but its overall goal is to prevent criminal activity from occuring during shipping. These crimes include, but are not limited to:

  • Human trafficking
  • Weapons dealing
  • Drug trafficking
  • Smuggling

In addition, financial institutions monitor ships to prevent money laundering.

Why is it Important to Monitor Ships?

Different organizations have different motivations to monitor ships and prevent criminal activity from occurring:

  • Governments – to protect citizens, prevent crime, and capture tax revenue
  • Goods shippers – to protect merchandise from being seized and ensure that it can be safely offloaded when it arrives at its destination
  • Financial institutions – to protect against participation in trade-based, money laundering operations that could lead to hefty fines

What Do Organizations Look at to Monitor Ships?

Organizations look for red flags and behavioral anomalies within a ship’s behavior that indicates involvement in illicit activity. More advanced systems, like those developed by Windward, use artificial intelligence (AI) to capture multiple pieces of data and offer a risk score for businesses to base their shipping decisions on. 

Monitoring begins with due diligence and investigating whether a ship is safe to use. 

A ship’s registry is a good starting point. Ships that are registered in open registries, in countries like Panama or Liberia, may be considered suspicious. However, there are a number of legitimate reasons for a ship flying a flag of convenience. On its own, a ship’s registry is simply one marker that bears looking into. 

The ship’s route and ports provide additional insight into the activities taking place onboard the ship. Ships that port in sanctioned countries – such as Iran, North Korea, or Syria – are highly suspicious. While there may be legitimate reasons for a ship to dock in these ports, stopping there can lead to a ship being detained, delaying the shipment of goods for an indeterminable amount of time. 

The ship’s manifest is another place to look. Financial institutions and governments looking to prevent smuggling and money laundering use this data to get a better sense of the goods on board. 

Each of these items provides data that should indicate to interested parties whether a ship is safe to use. Ships that seem to pose a high risk should be avoided. 

What Tools Do Organizations Use to Monitor Ships in Maritime Trading?

Advanced technology has changed the way interested parties monitor ships. What was once a manual process is now highly automated, providing shippers with real-time information that they need to make risk-based decisions. 

Automatic Identification Systems (AIS) – which transmits a ship’s position, identification number, and other ship data – can be used to track a ship and see whether it ever entered a sanctioned port. Windward offers ship risk assessments and a risk score. 

AI technology can consider a host of factors, from ship owner and registry data, to locations and manifest items, while assessing. It provides userswith a list of low-risk, medium-risk, and high-risk vessels, enabling them to make an informed shipping decision. 

Protect Shippers and Importers through Ship Monitoring

Maritime trade is critical to sustaining the world’s economy. It enables the cost-effective transfer of goods and merchandise from manufacturing plants in Asia and Africa, to North American and European consumers. It is essential to the growth of developing countries, as it enables them to import equipment and raw materials that are naturally lacking. 

Unfortunately, the dark side of trade is illicit trade. Hidden among the 226 million containers shipped each year are contraband, fake goods, drugs, and weapons. 

Identifying ships engaging in illegal activities through effective monitoring techniques offers a win-win for importers and exporters, allowing them to avoid risky ships, while making it more difficult for illegal activities to succeed.