Abstract
The role played by seagoing commerce in human history has been explored by many and Lincoln Paine’s, The Sea & Civilization (2015) is a good starting point for those seeking a deep dive into the subject. In addition to goods, international trade led to the exchange of ideas, technologies, and religious beliefs that made port cities dynamic hubs of social and cultural interaction. Unfortunately, it also enabled the rapid spread of pandemic diseases such as the Black Death (bubonic plague) that killed tens of millions in Europe and Asia during the Middle Ages.
With overland travel slow and arduous and air travel unimagined, trading beyond local markets necessitated going to sea. In addition to something to trade, this required ships, ports, sailors, and all the physical and institutional infrastructure that we would now characterize as a supply chain. Nations large and small rose and fell in prominence as the quality of their ships, knowledge of navigation, location of their ports, and strength of their navies waxed and waned. The pursuit of commodities unavailable at home ultimately led to the colonization and exploitation of “undiscovered” lands in the Americas, Africa, and Asia by those nations with the means to access and hold them. Many of the wars and classic sea battles that consumed Europe, both prior to and after the “Age of Discovery,” were, more often than not, squabbles over trade routes, access to markets, and colonial control. Beyond a reduction in outright conflict, little has changed in this regard, except, of course, the actors and the contended locales.
In Sinews of War and Trade: Shipping and Capitalism in the Arabian Peninsula, Laleh Khalili, a Professor of International Politics at Queen Mary University, London, provides a valuable update on the state of global maritime trade in the 21st century. Although her focus is on the Middle East, the factors underlying and driving global trade remain remarkably consistent. However, in a world is challenged by the COVID-19 pandemic, unraveling supply chains, and rattling sabers in many locations, a key takeaway from the book is that we appear to have learned very little about how to sustain the physical networks on which global trade and prosperity depend.
Professor Khalili traveled the Mediterranean, the Red Sea, and Indian Ocean aboard merchant ships and reports on the critical role played by the infrastructure of global commerce on geopolitics, international finance, and basic human rights. Commercial shipping is about money, certainly, but also about so much more. As Admiral Mahan noted more than 100 years ago, remote basing was critical to the maintenance of global naval preeminence. Great Britain, a relatively small, island nation, effectively ruled the seas for almost 200 years with the world’s largest navy, supported by a network of overseas bases, coaling stations, colonial holdings, and quasi-national commercial ventures (e.g., The East India Company).
The global shipping industry is a literal spider’s web of corporate and government entities involved in the sea and land transport of raw and finished goods from extraction to final consumption. It is supported by an interdependent network of physical, institutional, and human infrastructures that involves extractive industries, ship owners and shipping companies, port management, major engineering and construction firms, finance and insurance entities, labor (unionized and not), governmental officials, and security and military resources. How these disparate parts come together to form functional supply chains is a fascinating story of national and corporate imperialism, commercial foresight and risk taking, technological change, greed and corruption, and geopolitical maneuver and military posturing. Ultimately, everyone and everything in the global shipping industry either adapts to change or falls by the wayside.
Although the focus of the book is on the Middle East, and specifically the Arabian Peninsula, it is an excellent window into global shipping and how it has evolved from a transporter of spices and silks to petroleum and PlayStations. It first describes the rationale of historic sea routes, that despite an evolution in power from sail to coal to diesel, have proved remarkably durable. It turns out that where ships need to stop or transit really limits the options for how they get there but “where to stop” is continually changing based on a myriad number of factors such as what is being on- and off-loaded, the ever-increasing size of ships, freight and insurance rates, who controls the freight terminals, local labor conditions, and geopolitical and security issues.
This dynamism has been a boon for global engineering and construction firms who have done quite well by meeting the demand for new and expanded port facilities and the landside infrastructure to support them. That massive dredging and land reclamation projects have wreaked havoc on the natural ecosystems of the Red Sea and Persian Gulf has been of less concern than the global demand for petroleum and other natural resources as well as cheap manufactured goods. Such massive change does not occur in a vacuum and must be supported by legal, financial, and administrative infrastructures that complement the physical systems. Professor Khalili does an excellent job of explaining how current laws evolved from colonial-era edicts that were aimed at protecting the economic interests of foreign (mostly North American and European) investors and the struggles of post-colonial nations to reclaim dominion over their natural resources. Crony capitalism is alive and thriving in the Middle East and family and tribal connections play a major role in securing lucrative contracts for transport, construction, and warehousing as well as the financing to make it all possible. Historically and through the present day, foreign experts in technology, finance, and administration have supported the end-to-end extraction, sale, processing, and transport of petroleum and are fully enmeshed in keeping everything moving and profits flowing. This capsule summary of global shipping would be reason enough for an interested reader to pick up the book but there is still more that demands attention.
In its depiction of landside labor and shipboard work, the book clearly marks out a fundamental failure of the global shipping industry. By attempting to squeeze every dollar possible out of the system to the near total exclusion of other factors, the elites at the top of the shipping food chain have left ordinary workers in the ports and on the ships far behind. Stories of entire ship’s crews being abandoned by owners without wages and often food and water are not apocryphal. The examples Professor Khalili cites in the book are being replayed today as this review is being written (Hinshaw and Parkinson 2021; Parkinson and Hinshaw 2021). Like so much in the industry, laws and regulations are written (or not) to benefit owners and investor to the detriment of workers. Ships with convoluted ownership chains sail under “flags of convenience” which are little more than dodges to avoid troublesome regulations for worker health and safety and other tort liabilities. Increasingly, the industry is turning to automation on both ship and shore to reduce labor costs still further. The social and environmental implications of lightly crewed ships and fully mechanized ports should get more attention.
The final issue addressed by Professor Khalili can be broadly lumped under geopolitical and security concerns. In 1890, Alfred Thayer Mahan (1890), called by some the “the most important American strategist of the nineteenth century,” published The Influence of Sea Power Upon History, 1660-1783. As the world has moved beyond the coal-fired freighters and big gun battleships of Mahan’s era, his underlying premise endures. Namely, that unfettered commercial use of the sea was vital to a nation’s economic health and intricately linked to its ability to project and maintain control of the seas through naval military power.
As noted previously, from the middle of the 18th century until WW II, Great Britain dominated the seas through a virtual monopoly in merchant ships, friendly ports and overseas bases, diplomatic leverage, and the world’s most powerful navy to back it all up. The U.S. assumed much of this role through the years of the Cold War up until the present time, but China and Russia are showing profound interest in becoming regional, if not global, sea powers.
For example, China’s Belt and Road initiative is nominally about linking China’s economy to the global marketplace. This has included Chinese efforts to finance and build the necessary infrastructure to improve overseas ports, freight terminals, and other landside infrastructure in exchange for equity positions and operating concessions and in some cases, military bases. This has recently included the establishment of a logistical base in Equatorial Guinea to replenish Chinese warships in the South Atlantic (Phillips 2021) and the clandestine establishment of a military facility in the United Arab Emirates (Lubold and Strobel 2021). All of this appears remarkably similar to the 19th century British playbook.
In a similar vein, several nations are contending for prominence in the Arctic as global warming has increased the period when the Arctic Ocean is free of sea ice and open for commercial shipping (Grove 2021a). The lack of infrastructure is a major impediment to increased maritime traffic and Russia is leading the race to develop or improve facilities for the export of natural resources and shipping support services (Grove 2021b). Here again, commercial shipping interests in support of geopolitical objectives are creating a sense of déjà vu. A full discussion of the geopolitics of the seas was written by Adm, James Stavridis (USN, ret.), former Supreme Allied Commander for Global Operations at NATO (2017). Given its broad and deep coverage of the topic, Sinews of War and Trade should be of interest to anyone charged with making policy for the provision and operation of global shipping infrastructure and those who depend upon its services.
There is a final issue, not discussed by Professor Khalili, that bears mentioning here. Sinews of War and Trade was written before the outbreak of the COVID-19 pandemic and we are still witnessing its effects on shipping and global supply chains. Major supply chain disruptions have typically been driven by natural disasters such as flooding in Thailand and the tsunami in Japan in 2011 that damaged physical systems. However, of the many lessons learned from the COVID-19 pandemic, perhaps the most transformational is the realization that humans are both a vector of the disease and its victim. The primary transmission mechanism for the virus is human-to-human and until the global outbreak of COVID-19, little attention had been paid to the possibility that a significant number of the critical personnel involved in the global shipping industry could be incapacitated or otherwise unavailable due to a public health emergency. At the same time, perhaps with lurking memories of the Black Death of the Middle Ages, many nations closed their borders to ships and sailors. These factors played a significant role in on-going supply chain disruptions and if we are to be better prepared for the next pandemic, we will first need to learn the lessons of the current one.