The UN Conference on Trade and Development expects international maritime trade to expand at an average annual growth rate of 3.4% over the 2019–2024 period, driven in particular by growth in containerized, dry bulk and gas cargoes.
Volumes in the global maritime trade grew by only 2.7% last year, below the historical averages of 3% and 4.1% recorded in 2017, according to UNCTAD’s Review of Maritime Transport 2019. Uncertainty remains an overriding theme in the current maritime transport environment, with risks tilted to the downside.
World maritime trade lost momentum in 2018 as heightened uncertainty, escalating tariff tensions between the US and China and mounting concerns over other trade policy and political crosscurrents, notably a no-deal Brexit, sent waves through global markets.
“The dip in maritime trade growth is a result of several trends including a weakening multilateral trading system and growing protectionism,” said UNCTAD Secretary-General Mukhisa Kituyi. “It is a warning that national policies can have a negative impact on the maritime trade and development aspirations of all.”
Buffeted by a global economic slowdown, in 2018, seaborne trade also navigated other difficult headwinds such as geopolitical tensions, while preparing for an expected surge in ship fuel costs arising from a new regulation requiring ships to cut their sulphur dioxide emissions.
Port traffic edges down
Reflecting slower maritime trade, growth in global port traffic also edged down, with container port traffic increasing by only 4.7% in 2018, from a 6.7% growth rate in 2017. Similarly, container trade growth weakened.
In 2018 volumes only increased by 2.6%, compared with 6% in 2017. This was matched with a sustained delivery of mega container ships, with container fleet supply capacity in 2018 increasing by 6% as compared to 4% in 2017.
In an already overly supplied market, these developments further compressed freight rates in 2018. Despite the setbacks, a milestone was reached, with total seaborne trade volumes amounting to 11 billion tons.
The maritime transport industry also saw a silver lining in an expanding liquefied natural gas (LNG) sector. This came as a result of intensified pressure to promote cleaner energy sources. Bulk carriers, oil tankers and container ships recorded the highest level of ship deliveries, with LNG carriers recording the highest growth rate at 7.25%.
The report warns that while global growth could swing in a positive direction, given some upside factors such as China’s Belt and Road Initiative, and the various trade deals that came into force or are in the pipeline, the balance of risks to the outlook remains poor. The risks are particularly high for the most vulnerable economies.
The report highlights a growing connectivity divide – an increasing difference between the most- and least-connected countries. Several small island developing states are among the countries with the lowest shipping connectivity.
They are often confronted with a vicious cycle wherein low trade volumes discourage investments in better maritime transport connectivity, and faced with low connectivity, merchandize trade becomes costly and uncompetitive.