UNCTAD cites uncertainty, rising shipping costs as threats to developing nations

Urges Nigerian, other ports to go green, digital

The United Nations Conference on Trade and Development (UNCTAD) has raised the alarm over the mounting pressures facing the global maritime industry, warning that fragile growth, rising costs and mounting geopolitical tensions threaten to disrupt trade and hit developing economies hard in the closing months of 2025.

In its Review of Maritime Transport 2025, released yesterday, UNCTAD noted that shipping, which carries over 80 per cent of the world’s merchandise trade, is entering a period of heightened uncertainty.

The report said that after a year of solid performance in 2024, global seaborne trade is forecast to stall in 2025, with volumes expected to grow by just 0.5 per cent.

According to the review, last year’s long-distance rerouting, driven by geopolitical tensions, pushed tonne-miles up by nearly six per cent, keeping ships busier but at higher costs.

The report highlighted that recent policy measures in the United States and other key trading partners, including new tariffs, port fees and targeted restrictions on port calls by foreign-built or foreign-operated vessels, could further disrupt shipping routes and drive up costs.

The developments, the agency warned, mean more rerouting, skipped port calls and longer journeys, all of which raise freight rates and threaten the supply chain.

Developing economies, particularly small island developing states (SIDS), least developed countries (LDCs) and African economies such as Nigeria, are expected to bear the brunt of persistent high transport costs, which could affect trade flows and consumer prices, according to UNCTAD.

UNCTAD urged targeted measures to mitigate cost increases, strengthen port performance, and improve trade facilitation.

While digital systems such as maritime single windows and port community systems are helping some nations cut costs and delays, UNCTAD stated that many developing countries, including Nigeria, lag behind as cybersecurity has also emerged as a critical concern as digitalisation advances.

UNCTAD stated that ports worldwide are under increasing strain, facing congestion, longer waiting times, and urgent pressure to invest in cleaner, more efficient, and smarter operations.

UNCTAD urged governments to implement trade facilitation commitments, promote automation, and expand public–private partnerships to improve port performance.

The report further highlighted that environmental compliance costs, including emissions pricing, are also redefining shipping economics, creating further burdens for developing nations.

According to UNCTAD’s report, shipping greenhouse gas emissions rose by five per cent in 2024, yet only eight per cent of the world fleet’s tonnage is equipped to use alternative fuels.

Secretary-General of UNCTAD, Rebeca Grynspan, cautioned that the transitions ahead to zero-carbon, digital systems and new trade routes must be just transitions.

“They must empower, not exclude. They must build resilience, not deepen vulnerability,” she stated.
The agency stated that decarbonisation will demand costly fleet renewal, port adaptation, and alternative fuel infrastructure.

The report also stated that ship recycling remains low despite the Hong Kong Convention on safe and environmentally sound recycling entering into force in June 2025, now covering 90 per cent of the global recycling market.

UNCTAD called for an acceleration of sustainable recycling practices to meet climate targets.

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