Seven major trends
Unctad has not espied an end to maritime shipping growth by 2023. Risks arising from protectionism, environmental regulations and oligopolies will remain though.
Some good news on the recently increasingly cloudy maritime shipping skies have caught the industry’s attention. The Review of Maritime Transport 2018, published a few days ago by Geneva-based Unctad, the United Nations Conference on Trade and Development, is full of optimism.
In 2017 global maritime trade, carried forward by surging national economies worldwide, grew by an impressive 4% – which is the strongest growth of the last five years, from a statistical point of view. Total volumes came to 10.7 billion t, with global container traffic increasing by 6.4%. Unctad estimated that overall, after two rather weak years, throughput in ports the world over stood at 752 million teu in 2017, which represented a 5.6% improvement, that is to say a 42 million teu rise.
Unctad’s projections are more significant, though. It foresees volume growth of 4% in 2018, with annual increments of 3.8% in the half a decade to 2023. The volume of containers and dry bulk goods are expected to increase fastest.
Trends concern trade, regulations, industry flexibility
Naturally enough the team of analysts led by Jan Hoffmann, the head of Unctad’s trade logistics branch, has not overlooked the latest developments either. At the top of the seven trends that they believe will determine the near future, there is conflict between the USA and China, amongst other things.
The seven trends can be categorised as trade policy, regulatory and industry specific clusters. On top of geopolitical risks there will be ever more trade policy risks, as well as a “rising protectionist sentiment” in many countries that could be very detrimental to trade. The second trend cited concerns the effects of ongoing digitalisation, growing e-commerce and the new Silk Road.
Make the best of technological advances
Of two further key trends that Unctad believes will change the face of shipping, one is based on the IMO’s regulations to protect the environment (reduce annual greenhouse gas emissions from ships by 2050 by 50% compared with 2008, a 0.5% limit on sulphur in ships’ fuel from 2020 on), whilst the other one concerns the industry’s ability to make the best of technological advances.
Unctad has ascertained the most direct risk from the lines themselves, however. “Overly-optimistic carriers”, the report states, could “order excessive new capacities”, with two thirds of the containership orderbook concerning vessels with capacities of more than 14,000 teu. The impact on supply and demand and on freight rates and transport costs are predictable. Shipping line consolidation represents a big challenge for the regulatory and cartel authorities, for both smaller as well as regional players and ports and terminals have to be protected from a few corporations gaining too much market dominance.
The conclusion is that, despite all the uncertainties arising from the major trade policy mood, the shipping industry is the master of its own fate when it comes to creating a profitable and environmentally-acceptable future. The question is whether pressure from shippers and the bonfire of the vanities will allow it?