Ocean Cargo: The Main Engine of World Trade

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Imagine a giant ship sailing across the vast ocean, carrying thousands of containers stacked as tall as skyscrapers. Inside one of them is a high-value product—from smartphones to laptops to televisions—that will reach consumers in the next few days. This cargo departed from a port in China, traveled thousands of kilometers by sea, before finally docking at an Indonesian port.

This efficiency makes sea transport the most dominant mode of transportation. A single ship can carry thousands of containers simultaneously, far exceeding the capacity of other modes of transport. It’s no surprise that over 90% of global trade still relies on sea routes, not only because of their relatively lower costs but also because of their enormous carrying capacity.

In this article, we will further examine the role of the sea as the backbone of global trade, Indonesia’s strategic position in the international distribution network, and the challenges and opportunities facing the maritime cargo industry in the modern era.

The Sea as the King of Global Distribution

In the international trade industry, the sea is the main and irreplaceable distribution route. According toInternational Chamber of ShippingAround 90% of global trade still passes through the sea. Mining raw materials, energy, food, and even everyday consumer goods depend on stable maritime distribution.

Modern cargo ships have incredible capacities. For example,Ultra Large Container Ship (ULCS)capable of transporting more than 20,000 containers in one voyage.Ever AceIt even has a capacity of up to 23,992 TEU (Twenty-foot Equivalent Units). If these containers were stacked on land, they could form a “wall” as tall as a skyscraper.

Besides efficiency, sea routes also offer high flexibility. Ships are capable of crossing continents and navigating strategic routes that serve as the lifeblood of global trade. Some of these include:

• Suez Canal (Egypt)→ a vital link between Europe and Asia. IncidentEver GivenIn 2021, it paralyzed global trade, with losses estimated at USD 9 billion per day.
• Strait of Malacca (Indonesia–Malaysia–Singapore)→ one of the world’s busiest shipping lanes with more than 100,000 ships passing through each year, carrying oil, gas and consumer goods.
• Panama Canal (Central America)→ strategic route connecting the Pacific and Atlantic Oceans, very important for trade in the Americas.

If one of these routes is disrupted, the impact can be global: oil prices soar, distribution of goods is hampered, and inflation increases.

For Indonesia, its geographical location is a strategic advantage, as it sits at the center of international trade routes, particularly the Strait of Malacca. This makes the sea not only a domestic logistics route but also a vital gateway for global trade flows.

Historical Traces of Sea Cargo in Indonesia

The long history of maritime trade in Indonesia shows that maritime routes have been an integral part of national life for centuries. Long before the termlogistics or supply chainIt is widely known that the people of the archipelago have practiced inter-island trade by sea.

The spice route from Maluku became a crucial episode. Ships carried nutmeg, cloves, and pepper to Java, where they were then passed on to global markets via Arab, Indian, and European traders. Port cities such as Ternate, Tidore, Malacca, and Banten became distribution centers. Indonesian spices were even nicknamed “yellow gold,” fueling major European expeditions.

During the colonial period, VOC (Dutch East India Company)Founded in 1602, the VOC became the greatest trading and maritime power of its time. It possessed a powerful navy, controlled shipping lanes, and built ports to support its trade monopoly. It could be said that the VOC represented an early form of an integrated logistics system, although it benefited the colonialists more than the local population.

Post-independence, the face of national shipping changed.Pelni (Indonesian National Shipping)was established to connect thousands of islands from Sabang to Merauke. Meanwhile,Pertamina Shippingplay an important role in energy distribution.

In the modern era, large ports such as Tanjung Priok, Tanjung Perak, and Belawan develop into part of an international logistics network. The Sea Toll Program launched by the government aims to cut logistics costs and reduce price disparities between regions.

While technology and regulations have advanced rapidly, the basic principle remains the same: the ocean is the primary link between producers and consumers, both domestically and globally.

Modern Challenges of Ocean Cargo

Although the sea remains a major trade route, a number of major challenges still loom over the industry:

1. High Logistics Costs
   Indonesia’s logistics costs reach 23–24% of GDP, far above the global average of around 13%. Factors such as loading and unloading costs, limited infrastructure, and complex bureaucracy contribute to high distribution costs.
2. Punctuality
   Sea freight takes longer than air freight, which presents a challenge in the e-commerce era, when consumers demand fast delivery.
3. Extreme Weather and Climate Change
   Maritime risks include high waves, storms, and the El Niño/La Niña phenomenon, which can disrupt shipping schedules. Global climate change is also making weather predictions increasingly difficult.
4. Trade Route Security
   Piracy, geopolitical conflicts such as in the South China Sea, and major incidents such as the grounding of the Ever Given in the Suez Canal highlight the vulnerability of sea lanes to disruption.
5. Inter-Regional Disparities
   Distribution in Java is relatively smooth, while eastern Indonesia faces limited port infrastructure, which results in high distribution costs.

To address this challenge, industry players need to continue innovating, from implementing digital technology for tracking and port automation to utilizing environmentally friendly LNG-fueled vessels.

The Future of Ocean Cargo: Digitalization and Green Shipping

The global shipping industry is now focused on two main agendas:digitalization And green shipping.

1. Digitalization
   Digital transformation is transforming previously manual processes into more efficient ones. Blockchain technology for shipping documents, e-billing systems, and IoT sensors in containers enable real-time tracking. Large companies like Maersk have developed a digital platform that allows full transparency in the delivery process.
   
   In Indonesia, major ports such as Tanjung Priok started implementing the systemsingle submission to speed up the administrative process. In the future, the concept of smart port with full automation is predicted to become the new standard. 
2. Green Shipping
   International Maritime Organization (IMO) targeting a 50% reduction in carbon emissions in the shipping industry by 2050. Innovations towards environmental friendliness include the use of LNG, biofuel, hydrogen, electric ships for short routes, aerodynamic ship designs, and the use of renewable energy.
   
   Several global companies have even begun testing ammonia- and methanol-fueled vessels. While costs remain high, the industry is clearly moving towards greener and more sustainable maritime logistics. 
3. Implications for Indonesia
   As an archipelagic nation with over 17,000 islands, Indonesia cannot ignore this trend. Digitization and the adoption of environmentally friendly vessels will help reduce logistics costs, accelerate distribution, and create price parity across the region. 

Conclusion

From the ancient spice routes to today’s digital age, the sea remains the backbone of global trade. Despite the challenges of high costs, extreme weather, and sustainability, it’s precisely where opportunities for innovation arise.

Digitalization brings transparency and efficiency, while the trendgreen shipping making the industry more environmentally friendly. The future of maritime cargo isn’t just about transporting more goods, but also about shipping them faster, safer, and more sustainably.

However, despite these opportunities, risks remain real. Damage, loss, and delays can result in significant losses for businesses. Cargo insurance protection has become an integral part of the risk management strategy.

As an experienced insurance broker, L&G Insurance Broker is ready to assist your company in protecting every shipment. Contact us via WhatsApp at 08118507773 or email to halo@lngrisk.co.id for free consultation.

In today’s challenging world of global trade, the right protection will ensure your business remains secure, competitive, and able to move into the future with more confidence.