Consequently, there is a rapid expansion of import trade, matched by a corresponding
export trade in primary produce or simple manufactures to pay for the imports. Whilst
the early stages favour the bulk shipping business, when the economy reaches maturity,
the liner business gains from the almost unlimited potential for shipping components
and finished goods between developed markets.
The trade development cycle summarizes this dynamic relationship between the sea
trade and economic growth. Each country has its own unique cycle which depends on
its factors of production as well as cultural and commercial considerations. At the
earliest stages of development, imports of manufactures are paid for by cash crop
exports. As industry expands, raw materials generate demand for sea transport. The
imports of countries with few natural resources slow down, but in countries which
were initially resource-rich the depletion of domestic supplies may lead to growing
imports of some commodities. Imports and exports of manufactures continue to grow
as domestic import and export markets widen. Thus the trade development cycle has
different implications for the bulk and liner businesses.
Finally, we explored some of the economics of shipping logistics that will enter into
the discussion of the bulk, specialized and liner trades in the following chapters.