Maritime trade to fall by 4.1% this year, says UN
The United Nations Conference on Trade and Development (UNCTAD) has projected that volume of international maritime trade would fall by 4.1 per cent in 2020, owing to supply-chain disruptions, demand contractions, and global economic uncertainty caused by the COVID-19 pandemic.
UNCTAD, in its latest “Review of Maritime Transport 2020”, obtained by The Guardian, said the sector was at a pivotal moment facing not only immediate concerns resulting from the pandemic but also longer-term considerations. These range from shifts in supply-chain design and globalization patterns to changes in consumption and spending habits, a growing focus on risk assessment and resilience-building, and heightened global sustainability and low-carbon agenda.
According to UNCTAD, the sector is also dealing with the knock-on effects of growing trade protectionism and inward-looking policies.
It stated that the trends unfolded against the backdrop of an already weaker 2019 that saw international maritime trade lose further momentum, while lingering trade tensions and high policy uncertainty undermined growth in global economic output and merchandise trade.
However, the report stated that maritime trade volumes were expected to rebound by 4.8 per cent in 2021, if economic growth resumes as the pandemic subsides, warning that further waves of the pandemic could lead to a steeper decline in shipping.
The maritime transport review projected that many developing countries would be affected by declining demand and export revenues, remittances, foreign direct investment and official development assistance.
“The least developed countries are hit hard, given their limited resources and exposure to supply-chain disruptions such as in exports of textiles and clothing products (for example, Bangladesh). For the economies of Africa, developing America and Western Asia, and transition economies, an added concern is the sharp fall in commodity prices,” it stated.
Highlighting the priority action areas in preparation for a post-pandemic world, UNCTAD said: “The COVID-19 crisis has revealed the importance of maritime transport as an essential service ensuring the continuity of trade and supply of critical supplies and the global flow of goods during the pandemic. Ensuring the proper functioning of maritime transport services is a precondition for economic recovery.”