In a world rife with cascading crises – geoeconomic fragmentation, retreating development, and climate change – maritime trade serves as a stabilizing anchor, holding fast against the turbulent currents of disruption which are reflected in the maritime transport review 2023.
Over four fifths of all trade in the world flows through the high seas. This includes the crucial trade of food, energy, and other essential goods. As recent trade disruptions, and most notably that of Black Sea food exports due to the war in Ukraine have shown, in our interconnected world, billions of people need open ports and steady ships to eat, keep their lights on, and have their hospitals well-stocked.
In a context of rising trade disputes, it is therefore more imperative than ever to correctly gauge the health and prospects of maritime trade. Declining seaborne transport volumes could spell trouble to many developing countries, especially small island developing States which rely almost exclusive on this trade. This, alongside the need to monitor the challenges of the maritime transport industry in its quest for innovation and decarbonization, are the raisons d’être of the UNCTAD Review of Maritime Transport, whose first edition was published 55 years ago.
This 2023 edition of the Review of Maritime Transport paints a complex, mixed picture. On the one hand, we estimate that maritime trade volumes will continue to grow for the foreseeable future – 2.4 per cent in 2023, and 2. 1 per cent over the next five years. While this represents a slowdown from the average annual rate of maritime trade volume growth of around 3 per cent over the past four decades, it does show the limits of the notion of geoeconomic fragmentation – at least in the short- to medium-term, and in terms of volume.
Our Review does however suggest that shipping patterns and trading routes are indeed shifting, perhaps because of growing commercial tensions and a new geography of transport and trade. A clear result of this dynamic is that the average distance travelled for several commodities is increasing. Shipments of oil cargo and grain, for example, travelled longer distances in 2023 than any other year on record. On the other hand, we describe a maritime transport industry at a crossroads, with many forces at play reshaping the sector’s roles and operating landscape. For one, maritime transport needs to decarbonize as soon as possible. In 2023, carbon emissions from international shipping were 20 per cent higher than ten years earlier. As the maritime industry embarks on this complex transformative journey towards decarbonization, it must do so while sustaining economic growth. At the same time, world shipping fleet growth is slowing down, and the average age of the world fleet is increasing. Alternative fuels are not yet available at scale and are more costly, and the ships that can use them are also more costly than traditional ships. Furthermore, developing regions, including small island developing States and least developed countries, may face higher domestic inflationary pressures due to a limited capacity to mitigate the passthrough effects of energy transition costs in shipping and the associated increase in maritime logistics costs.
Another driver of change facing the sector is digitalization. Maritime logistics is increasingly dependent on more efficient ports and digitalized processes. While the COVID-19 pandemic deeply disrupted global supply chains and logistics, it also led to an increase in innovation in the industry, with an important growth in investment for paperless digital solutions. Customs modernization, port reform, trade facilitation, and the promotion of the use of electronic trade documents will all help to achieve faster transactions, lower costs, and reduce delays. All of this will lead to more efficiency, less waste, and better results for countries and the planet.
The International Maritime Organization is discussing economic measures that could generate funds to deal with these complex questions in a holistic manner. Such measures would enable shipping decarbonization and help close the price gap between traditional and alternative fuels, while supporting the scale up of decarbonization efforts and providing support to developing countries. UNCTAD proposes that an important share of generated funds could be channelled to promote port investment in small island developing States and the least developed countries, including investment in climate change adaptation, trade and transport reforms, as well as transport and digital connectivity. Such financial and technical support can pave the way to a just and equitable energy transition in maritime transport, and UNCTAD stands ready to support countries in this mission. These and other pressing matters will be the subject of the upcoming Global Supply Chain Forum, co-hosted between UNCTAD and the Government of Barbados, which will take place between 21 and 24 May of next year in Bridgetown. We hope to see you there.
Report foreword written by Rebeca Grynspan, Secretary-General of UNCTAD
Download the full report: UNCTAD Review 2023
