TH1 key terms

1 Containerisation

Refers to the use of standardized metal boxes, shipping containers, to transport good by sea, rail and road. Introduced in the late 1950s by American entrepreneur Malcom McLean, it had become one of the most transformative innovations in the history of global trade because it allows for goods to be transfered quickly and efficiently between ships trains and trucks, dramatically reducing the handling time, transport costs and the risk of damage or theft.

It is a key driver of the NIDL because it allows TNCs to become key drivers of the new international division of labor and underpin GVCs by enabling production to be fragmented across multiple countries Transnational corporations can organise complex global supply chains and relocate manufacturing to countries with lower production costs.

A small number of giant shipping companies dominate global container trade. The largest include MSC (Mediterranean Shipping Company, Italian company), Maersk (Denmark) and CMA CGM (France) together controlling over half of global container capacity. These companies operate vast fleets of ultra-large container ships (capable of carrying over 20,000 TEUS - Twenty-foot Equivalent Unit) along fixed global routes.

Large port hubs such as Shanghai, Singapore, Rotterdam and Los Angeles act as nodal points in these networks, redistributing goods to smaller regional ports via feeder services. Their location, infrastructure and connectivity determine which regions are well integrated into global trade and which are not.

Carries significant costs. Environmentally, international shipping accounts for around 2% of global CO2 emissions, while fuel emissions, accidental spills and containers lost at sea damage marine ecosystems and threaten wildlife. At the end of their lifespan, ships are dismantled in ship-breaking yards in South Asia under dangerous working conditions, releasing logon to toxic materials that pollute beaches and coastal waters.

2 EEZs

An Exclusive Economic Zone (EEZ) is a maritime zone established under the United Nations Convention on the Law of the Sea (UNCLOS), adopted in 1982 and now ratified by over 160 states. It extends up to 200 nautical miles (approximately 370 km) from a coastal state's baseline (the low-water line along the coast).

Within its EEZ, a coastal state does not exercise full sovereignty the waters remain international but it holds sovereign rights to explore, exploit, conserve and manage all natural resources found in the water column, on the seabed and beneath the seabed. Other states retain the right to navigate freely, fly over the zone and lay submarine cables and pipelines.

EEZs matter enormously for economic development because they grant exclusive access to a range of valuable resources (energy and mineral, fishery and biomass). Today, EEZs collectively cover around one-third of the world's oceans and generate an estimated $3 trillion in economic activity annually. Their importance is only growing as demand for marine resources intensifies.

EEZs are essential to economic development, granting states exclusive access to marine resources that are increasingly strategic in the context of the energy transition. Yet their value also makes them flashpoints for geopolitical rivalry

4 Globalisation

5 maritime choke points

A maritime chokepoint is a narrow sea passage through which a disproportionately large share of global maritime trade must pass, Because viable alternative routes are few or non-existent, these passages carry enormous economic and strategic weight. Any disruption - whether caused by conflict, accident, piracy or political crisis can delay international trade, raise transport costs and threaten global energy supplies.

The world's five principal chokepoints are:

• The Suez Canal (Egypt): Opened in 1869, it links the Mediterranean Sea to the Red Sea, providing the shortest sea route between Europe and Asia. Around 12-15% of global trade passes through it annually, including significant volumes of oil, LNG and containerised goods.

• The Panama Canal (Panama): Connects the Atlantic and Pacific Oceans, enabling ships to avoid the long and hazardous journey around Cape Horn at the southern tip of South America. Expanded in 2016 to accommodate larger vessels (Neo-Panamax ships), it handles around 5% of global trade.

• The Strait of Malacca (between Malaysia, Indonesia and Singapore): One of the world's busiest shipping lanes, connecting the Indian Ocean to the South China Sea and Pacific Ocean. Around 25% of global trade passes through it, including a significant share of the oil and goods bound for China, Japan and South Korea.

• The Strait of Hormuz (between Oman and Iran): The world's most critical oil chokepoint, through which approximately one-fifth of global oil consumption and around 20-25% of LNG passes daily. Its closure, even briefly, would trigger an immediate global energycrisis.

• Bab el-Mandeb (between Yemen, Djibouti and Eritrea): Links the Red Sea to the Gulf of Aden, providing the southern approach to the Suez Canal. It is a vital transit point for Europe-Asia trade and an increasingly contested geopolitical flashpoint.

Together, these five passages form the structural skeleton of global maritime trade. Their geographic concentration means that disruption to any one of them can send shockwaves through the entire global economy.

6 maritime zone