Trade war threatens outlook for global shipping, U.N warns
The United Nations Conference on Trade and Development (UNCTAD) has raised concerns over the impending implications of the trade war between United States and China, on the shipping industry.
According to the Review of Maritime Transport 2018 reports, UNCTAD said the tariff battles will potentially disrupt the global trading system and may drastically affect the shipping industry.
UNCTAD Secretary-General MukhisaKituyi, said: “While the prospects for seaborne trade are positive, these are threatened by the outbreak of trade wars and increased inward-looking policies.
“Escalating protectionism and tit-for-tat tariff battles will potentially disrupt the global trading system which underpins demand for maritime transport,” he added.
The warning comes against a background of an improved balance between demand and supply that has lifted shipping rates to boost earnings and profits.
Freight-rate levels improved significantly in 2017 (except in the tanker market), supported by stronger global demand, more manageable fleet capacity growth and overall healthier market conditions.
It stated that seaborne trade expanded by four per cent in 2017, the fastest growth in five years; even as it forecasts similar growth this year.
“Volumes across all segments are set to grow in 2018, with containerized and dry bulk commodities expected to record the fastest growth at the expense of tanker volumes,” it stated.
UNCTAD projects an average annual growth rate in total volumes of 3.8% up to 2023.
On the supply side, after five years of decelerating growth, 2017 saw a small pick-up in world fleet expansion.
During the year, a total of 42 million gross tons were added to global tonnage, equivalent to a modest 3.3 per cent growth rate.
Looking at the shipping value chain, Germany remained the largest containership-owning country with a market share of 20 per cent at the beginning of 2018, although it lost some ground in 2017. In contrast, owners from Greece, China and Canada expanded their containership-owning market shares.
The report showed that Africa relies heavily on ships and ports to service its intercontinental trade. While it accounts for approximately 2.7 per cent of global trade by value, the continent contributes higher shares to global seaborne trade – 7 per cent and 5 per cent of maritime exports and imports by volume, respectively.
While one-third of African countries are landlocked, maritime transport remains the main gateway to the global marketplace.
“Maritime trade in Africa is shaped by the continent’s trade concentration and limited diversification. Accordingly, 40 per cent of goods exported by sea in 2017 comprised of crude oil, while over two-thirds of imports were accounted for by dry cargoes (dry bulks and containerized goods) and close to 20 per cent of imports were made up of petroleum products and gas.
“The European Union remains Africa’s major trading partner although its share of trade has declined from about half in 1995 to one-third in 2017,” it stated.
UNCTAD said Africa’s ports account for 4 per cent of global containerized trade volume, much of which comprises imports of manufactured goods.