Review of maritime transport 2019
Global maritime trade grew at a slower pace in 2018 compared to previous years, attributed to global economic uncertainty, ongoing tariff tensions between the US and China and stricter climate change regulations
The report Review of Maritime Transport 2019, published by the UN Conference on Trade and Development (UNCTAD), outlines key developments and prospects in the maritime marked On the global scale, factors such as trade politics and protectionism, Brexit, economic transition in China, geopolitical turmoil and supply-side disruptions occurring in the oil sector contributed to the slow down. Country specific developments such as regional weakness in the industrial sector, and weaker import demands, also hindered growth.
2018 slowdown: key numbers
Trade volumes expanded at 2.7% in 2018 in comparison to 4.1% in 2017. Global port traffic also saw a slowing of 4.7% as compared to 6.7% in 2017. Maritime cargo segments experienced a similar slowdown. Additionally, container trade weakened by 3,4% from the previous year. An estimated 2% of world maritime trade volume was affected by tariff hikes between the US and China. The trade war has caused ripple effects especially for developing countries.
Despite the setbacks, 2018 reached a milestone with total volumes amounting to 11 billion tons.
A new normal: climate change, trade politics and persisting uncertainty
The report outlines a “new normal” for the global shipping industry effecting all aspects of the industry. Changed structures for demand and supply, regulations affecting ports, and tariff uncertainties causing unstable markets. Key trends affecting maritime trade can be summarized as:
Moderate growth in global economy and trade
Upsurge of more regionalized trade flows
A continued rebalancing of the Chinese economy
A larger role of technology and services in value chains and logistics
Higher frequency of natural disasters and climate related disruptions
Climate-risk assessments, adaption and resilience building for seaports particularly and general transport infrastructure is identified as an increasingly urgent priority. These risks have led to an accelerated environmental sustainability agenda, and the imperative need for a transition towards cleaner fuel sources.
While posing new challenges, regulation of a 0,50% limit on sulphur in shipping fuels is expected to bring significant benefits in terms of both human health and environment.
Connectivity divides are growing
The reports states that investments risks are especially high for the most vulnerable economies. An increasing difference between the most- and least connected countries is highlighted. Lower shipping connectivity persist in small island developing states, as low trade volumes discourage investments in maritime transport. In turn this leads to even less connectivity as trade becomes costly and uncompetitive.
Growth on the horizon, despite higher risks
UNCTAD projected a 2.6% growth in 2019, and an annual average growth rate of 3.4% for the period 2019-2024, particularly driven by growth in containerized, dry bulk and gas cargoes. The report also outlines potential positive impacts of the Belt and Road initiative of China, new bilateral trade agreements, and gas trade stemming from global energy transitions.
UNCTAD encourages improved planning, adequate response measures and more flexible transport policies. These are meant to respond to political and economic instability across the world. Additionally, the role of technological developments to help companies move away from fossil fuels are outlined. Tool such as digitalization, artificial intelligence, the internet of things and blockchain holds immense potential for increasing connectivity between port and shipping companies around the world.
Read the full report here