Annual UN maritime trade review predicts choppy waters ahead

6 November 2018

Trade wars and protectionism are threatening to reverse a recovery in global shipping operations, a United Nations report has warned…

Worldwide seaborne trade increased by 4% in 2017 – the fastest growth in five years – and is likely to rise at a similar rate over the next few years. That's the headline prediction from the latest annual review of maritime trade produced by the UN Conference on Trade & Development (UNCTAD).

Tariff war

But the study says this trend could be derailed by developments such as the 'tariff war' between the US and China. 'While the prospects for seaborne trade are positive these are threatened by the outbreak of trade wars and increased inward-looking policies,' UNCTAD secretary-general Mukhisa Kituyi said.

'Escalating protectionism and tit-for-tat tariff battles will potentially disrupt the global trading system which underpins demand for maritime transport.'


The report says the global shipping industry has picked up from the downturn which began a decade ago and increased freight volumes have resulted in a better relationship between supply and demand.

Global seaborne trade hit a record total of 10.7bn tonnes in 2017, up from 10.3bn tonnes in 2016. Last year also saw the first growth of the world fleet for five years, the report adds, with 42m gt added to global tonnage – equivalent to a modest 3.3% growth rate.

Freight rate levels 'improved significantly' in all sectors apart from the tanker market in 2017, the report notes, and are projected to continue rising. While freight volumes are projected to grow, the increases are likely to be most pronounced in the containerised and dry bulk commodity sectors, with tanker volumes showing much more restrained expansion.

Escalating protectionism and tit-for-tat tariff battles will potentially disrupt the global trading system which underpins demand for maritime transport.

Danger warning

But the report warns against the danger of 'overly optimistic carriers' ordering excessive new capacity on the back of improved trading and therefore upsetting the supply and demand balance.

UNCTAD says there is now an estimated total of 1,647,500 seafarers in the world. China, the Philippines, Indonesia, the Russian Federation and Ukraine are the five biggest labour-supply nations.

The report expresses concern about the increased number of cases of abandonment of seafarers – from an average of 12 to 19 cases a year between 2011 and 2016 to 55 cases in 2017. It also highlights the potentially negative effects of technological advances on the jobs of seafarers and says that 'the diminishing role of seafarers and ensuing job loss are a particular concern.'


UNCTAD also cautions about the impact of the rapid consolidation of the liner shipping sector over the last few years, noting that the top 10 shipping companies now control almost 70% of world fleet capacity, and three liner shipping alliances account for 93% of capacity deployed on the three major east-west container routes.

'The implication for competition levels, the potential for market power abuse by large shipping lines and the related impact on smaller players remain a concern,' the report says.

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