World seaborne trade makes record high of 8.7 billion tons in shipping, port services

World seaborne trade, a measure of demand for shipping, port and logistics services, rose by 4% in 2011, reaching a record high of 8.7 billion tons, the UN Conference on Trade and Development (UNCTAD) said December 4, 2012 in its Review of Maritime Transport 2012 report.

But the report indicated that over the same year, world ship supply capacity expanded much faster, at a rate of 10%, reaching for the first time a total of 1.5 billion deadweight tons.

“This supply and demand mismatch is bad news for the industry and for market profitability, especially in view of the continued growth in ship supply capacity, and the current fragile and uncertain economic outlook which threatens prospects for a robust growth in demand,” the report said.

The report noted that in tandem with world seaborne trade, global port throughput expanded in 2011, at a rate of 5.9%.

It observed that a total of 60% of world seaborne trade by volume was loaded, and 57% unloaded, in developing-country ports adding “that is a remarkable shift away from previous patterns, in which developing economies served mainly as loading areas for raw materials and natural resources.”

UNCTAD’s Review of Maritime Transport report warned that supply and demand imbalances are squeezing freight markets and tightening the finances of many shipping companies, given that such a situation tends to lower freight rates, compress earnings, and erode profit gains.

Maritime transport is the backbone of international trade and the global economy. According to UNCTAD, around 80% of global trade by volume and over 70% of global trade by value are carried by sea and are handled by ports worldwide.

By Ekow Quandzie