Tough times ahead for shipping industry owing to economic crisis, reports UN agency
Around 80 per cent of global trade is transported by sea but challenging times are ahead for the shipping industry, which is faced with a surge in the supply of vessels and tumbling freight rates amid the economic crisis, says a report released today by the United Nations Conference on Trade and Development (UNCTAD).
Around 80 per cent of global trade is transported by sea but challenging times are ahead for the shipping industry, which is faced with a surge in the supply of vessels and tumbling freight rates amid the economic crisis, says a report released today by the United Nations Conference on Trade and Development (UNCTAD).
The agency’s Review of Maritime Transport 2009, known as RMT, notes that international seaborne trade grew by 3.6 per cent in 2008 to a record 8.17 billion tons. However, this growth is lower than the previous year.
“Towards the middle of 2009 a partial recovery was seen, with rates at around 40 per cent of their 2008 peak,” UNCTAD states in a news release. “However, volatility in freight rates remains, suggesting uncertain times ahead for developing economies dependent on trade in commodities.”
It adds that high inventory levels in the supply chain helped prevent a similar decline in containerized trade, but the volume of container trade “collapsed” at the end of 2008.
Exacerbating the situation is the fact that the decline in trade volumes is occurring at the same time as the world merchant fleet has expanded, says the report, which covers the 18-month period from January 2008 through mid-2009.
These challenges are further compounded by other developments, the report adds, including maritime security at sea and the need to address climate change.
Every year, the RMT reviews transport developments in a particular region and this year’s focus is on developments in Africa since 2006, when UNCTAD last reported on the region.
According to the report, despite the global financial crisis, the region still experienced strong growth last year – around 5.1 per cent – with the top performers being the resource-rich countries, such as Angola, Equatorial Guinea, Liberia, Ethiopia and the Republic of Congo.
In addition, Africa’s share of overall world trade remains at 2.7 per cent, with its main trading partners being the European Union and North America.