Maritime transport saw an increase in demand in 2010, in particular in the dry bulk and container trade segments. Total seaborne trade reached an estimated 8.4 billion tons.
On the supply side, 2010 saw record deliveries of new tonnage, 28 per cent higher than in 2009, resulting in an 8.6 per cent growth in the world merchant fleet. The fleet reached almost 1.4 billion deadweight tons (DWT), in January of 2011, an increase of 120 million of DWT over 2010. New deliveries stood at 150 million DWT, against demolitions and other withdrawals from a market of approximately 30 million DWT.
Developing countries have made remarkable progress in international seaborne transport -- as documented for more than 40 years by UNCTAD´s annual Review of Maritime Transport (RMT). Developing countries´ shipping no longer consists solely of raw materials exports to the developed world. Indeed the last decades have seen their increased participation in global supply chains, which led to a surge in imports of primary and intermediary products.
Between 1970 and 2010, developing countries´ share in the volume of seaborne imports rose from just 18 per cent to 56 per cent of the world´s total. The world´s busiest container ports are Shanghai, Hong Kong (China) and Singapore, and Asian developing countries have the highest indicators of maritime transport connectivity, as captured by UNCTAD´s Liner Shipping Connectivity Index (LSCI).
But while the consolidation of the services provided by the container shipping industry achieved improved operational efficiency, it may also have entailed a loss in negotiating power for some players and resulted in less overall market efficiency for smaller trading nations. In July 2011, UNCTAD found that 35 coastal countries were served by three or fewer liner companies, compared to 25 countries just five years earlier.
The Report also highlights the entry into force, in September of 2011, of the International Convention on Arrest of Ships which was developed under the auspices of UNCTAD, during the United Nations International Maritime Organisation (IMO) high-level conference in 1999.
In the past decades, developing countries have substantially expanded their fields of expertise to maritime sectors of greater business sophistication and technical complexity. They first became major market players in the provision of seafarers and vessel registration, and are now expanding into practically all major maritime sectors.
As highlighted in this year´s special chapter of the UNCTAD Review of Maritime Transport, developing countries are not only users of shipping services but increasingly participants in the provision of these services, through the operation of seaports, the construction of ships, containers, and in the transport of equipment.
In shipbuilding (China and the Republic of Korea), scrapping (Bangladesh), and the provision of seafarers (Philippines), developing countries now account for more than three quarters of the world´s supply. Companies from Dubai, Hong Kong (China), and Singapore operate container terminals in many ports of the world, both in developing and in developed countries.
However, many least developed countries (LDCs) still do not have the ability to participate fully in the maritime businesses, which increasingly requires advanced technological capacities and the existence of industrial or service clusters. These countries are confronted with the double challenge of having to upgrade seaport facilities to accommodate larger ships while seeing competition being reduced with fewer regular shipping services calling at their ports.
Shipping companies from developed and developing countries alike increasingly rely on goods and services from developing countries to remain competitive. Already in the 1970s, ship-owners made use of open registries, enabling them to hire crews from countries with lower labour costs. In more recent decades, shipping companies also started purchasing their vessels in shipyards from developing countries, as vessels constructed in European or United States shipyards would often be too expensive.
Executive Summary
Developments in international seaborne trade
The world economic situation has brightened in 2010. However, multiple risks threaten to undermine the prospects of a sustained recovery and a stable world economy – including sovereign debt problems in many developed regions, and fiscal austerity. These risks are further magnified by the extraordinary shocks that have occurred in 2011, which have included natural disasters and political unrest, as well as rising and volatile energy and commodity prices.
Given that for shipping, all stands and falls with worldwide macroeconomic conditions, the developments in world seaborne trade mirrored the performance of the wider economy. After contracting in 2009, international shipping experienced an upswing in demand in 2010, and recorded a positive turnaround in seaborne trade volumes especially in the dry bulk and container trade segments. However, the outlook remains fragile, as seaborne trade is subject to the same uncertainties and shocks that face the world economy.
Structure, ownership and registration of the worldfleet
The year 2010 saw record deliveries of new tonnage, 28 per cent higher than in 2009, resulting in an 8.6 per cent growth in the world fleet. Deliveries amounted to 11.7 per cent of the existing fleet; the previous peak had been in 1974, when deliveries amounted to approximately 11 per cent of the existing fleet. The world merchant fleet reached almost 1.4 billion deadweight tons in January 2011, an increase of 120 million dwt over 2010. New deliveries stood at 150 million dwt, against demolitions and other withdrawals from the market of approximately 30 million dwt. Since 2005, the dry bulk fleet has almost doubled, and the containership fleet has nearly tripled. The share of foreign-flagged tonnage reached an estimated 68 per cent in January 201
The surge in vessel supply is the result of orders placed before the economic crisis. This, combined with lowerthan- expected demand, has led to a situation where there is an excess supply of shipping capacity. In the dry bulk and container sectors especially, analysts forecast an oversupply of tonnage in coming years.In both sectors, recent and upcoming record-sized newbuildings pose a further challenge to owners, who will need to find cargo to fill their ships.
Price of vessels and freight rates
The price of newbuildings was lower for all vessels types in 2010, reflecting market views that the capacity of the world fleet is sufficient to meet world trade in the short-term. In the second-hand market, the results were mixed. The larger oil tankers held their value, while smaller tankers and specialized product tankers declined in value. In the dry bulk sector, the price of medium-sized Panamax vessels decreased, while the price of smaller and larger vessels increased. The price for all sizes of secondhand container ships also rose in value during 2010 as trade volumes recovered.
Freight rates in the tanker sector performed better than the previous year, rising between 30 and 50 percent by the end of 2010. Every month for all vessel types was better than the corresponding month for the previous year. However, tanker freight rates in general still remained depressed, compared with the years immediately preceding the 2008 peak. Freight rates in the dry bulk sector performed well for the first half of the year, but the Baltic Exchange Dry Index (BDI) lost more than half its value from the end of May 2010 to mid-July 2010. A partial rally occurred in August 2010 before the Index continued its downward trajectory. Between May 2010 and May 2011, the BDI declined by about two thirds. Container freight rates in 2010 witnessed a major transformation brought about by a boost in exports and measures introduced by shipowners to limit vessel oversupply. The result can be seen in the New ConTex Index, which tripled in value from early 2010 to mid-2011.
Port and multimodal transport developments
World container port throughput increased by an estimated 13.3 per cent to 531.4 million TEUs in 2010 after stumbling briefly in 2009. Chinese mainland ports continued to increase their share of total world container port throughput to 24.2 per cent. The UNCTAD Liner Shipping Connectivity Index (LSCI) reveals that China continues its lead as the single most connected country, followed by Hong Kong SAR, Singapore and Germany. In 2011, 91 countries increased their LSCI ranking over 2010, 6 saw no change, and 65 recorded a decrease. In 2010, the rail freight sector grew by 7.2 per cent to reach 9,843billion freight ton kilometres (FTKs). The road freight sector grew by 7.8 per cent in 2010 over the previous year with volumes reaching 9,721 billion FTKs.
Developing countries’ participation in Maritime Businesses
Developing countries are expanding their participation in a range of different maritime businesses. Theyalready hold strong positions in ship scrapping, ship registration, and the supply of seafarers, and they have growing market shares in more capital-intensive or technologically advanced maritime sectors such as ship construction and shipowning. China and the Republic of Korea between them built 72.4 per cent of world ship capacity (dwt) in 2010, and 9 of the 20 largest countries in shipowning are developing countries. Ship financing, insurance services and vessel classification are among the few maritime sectors that have so far been dominated by the more advanced economies. However, here, too, developing countries have recently demonstrated their potential to become major market players. India, for instance, joined the International Association of Classification Societies; through this it gains easier access to the global ship classification market. China now has two of the world’s largest banks in ship financing.
The Review of Maritime Transport 2011 (Sales No. E.11.II.D.4, ISBN 978-92-1-055223-3) may be obtained from United Nations Sales Offices at the addresses mentioned below or from United Nations sales agents in many countries.
The Review of Maritime Transport 2011 (Sales No. E.11.II.D.4, ISBN 978-92-1-055223-3) may be obtained from United Nations Sales Offices at the addresses mentioned below or from United Nations sales agents in many countries.
