The Review of Maritime Transport is a recurrent publication prepared by the UNCTAD secretariat since 1968 with the aim of fostering the transparency of maritime markets and analysing relevant developments. This edition of the Review covers data and events from January 2017 until June 2018.
The full report is available here:
Excerpts from the executive summary:
“According to the 2018 Review, global seaborne trade is doing well, supported by the 2017 upswing in the world economy. Expanding at 4 per cent, the fastest growth in five years, global maritime trade gathered momentum and raised sentiment in the shipping industry.”
“Global containerized trade increased by 6.4 per cent, following the historical lows of the two previous years. Dry bulk cargo increased by 4.0 per cent, up from 1.7 per cent in 2016, while growth in crude oil shipments decelerated to 2.4 per cent.”
“Prospects for seaborne trade are positive; UNCTAD projects volume increases of 4 per cent in 2018, a rate equivalent to that of 2017. Contingent on continued favourable trends in the global economy, UNCTAD is forecasting a 3.8 per cent compound annual growth rate between 2018 and 2023. Volumes across all segments are set to grow, with containerized and dry bulk commodities expected to record the fastest growth at the expense of tanker volumes.”
“While the prospects for seaborne trade are bright, downside risks such as increased inward-looking policies and the rise of trade protectionism are, nevertheless, weighing on the outlook.“
“Escalating trade frictions may lead to a trade war that could derail recovery, reshape global maritime trade patterns and dampen the outlook. Further, there are other factors driving uncertainty. Among others, these include the ongoing global energy transition, structural shifts in economies such as China, and shifts in global value chain development patterns.”
Seven key trends
“The Review has identified seven key trends that are currently redefining the maritime transport landscape and shaping the sector’s outlook. They entail the following challenges and opportunities, which require continued monitoring and assessment for sound and effective policymaking:
- First, on the demand side, the uncertainty arising from wide-ranging geopolitical, economic, and trade policy risks, as well as some structural shifts, have a negative impact on maritime trade. Of immediate concern are inward-looking policies and rising protectionist sentiment that could undermine global economic growth, restrict trade flows and shift their patterns.
- Second, the continued unfolding of digitalization and e-commerce and the implementation of the Belt and Road Initiative. These bear major implications for shipping and maritime trade.
- Third, from the supply-side perspective, overly optimistic carriers competing for market share may order excessive new capacity, thereby leading to worsened shipping market conditions. This, in turn, will upset the supply and demand balance and have repercussions on freight-rate levels and volatility, transport costs and earnings.
- Fourth, liner shipping consolidation through mergers and alliances has been on the rise in recent years in response to lower demand levels and oversupplied shipping capacity dominated by mega container ships. The implication for competition levels, the potential for market power abuse by large shipping lines and the related impact on smaller players remain a concern. Competition authorities and regulators, as well as other relevant entities such as UNCTAD, need to remain vigilant.
- Fifth, alliance restructuring and larger vessel deployment are also redefining the relationship between ports and container shipping lines. Competition authorities and maritime transport regulators should also analyse the impact of market concentration and alliance deployment on the relationship between ports and carriers.
- Sixth, the value of shipping can no longer be determined by scale alone. The ability of the sector to leverage relevant technological advances is becoming increasingly important.
- Finally, efforts to curb the carbon footprint and improve the environmental performance of international shipping remain high on the international agenda. In April 2018, IMO adopted an initial strategy to reduce annual greenhouse gas emissions from ships by at least 50 per cent by 2050 compared with 2008 – a particularly important development. With regard to air pollution, the global limit of 0.5 per cent on sulphur in fuel oil used on board ships will come into effect on 1 January 2020. To ensure consistent implementation of the global cap on sulphur, it will be important for shipowners and operators to continue to consider and adopt various strategies, including installing scrubbers and switching to liquefied natural gas and other low sulphur fuels."