“ On course for a better world” – Kickoff seminar Danish Shipowners’ Association 9 February 2012, Copenhagen Maritime transport, sustainable development and climate change: some issues for consideration Dr. Regina Asariotis United Nations Conference on Trade and Development
Shipping is the lifeblood of world trade 2 Source: Simon Bennett, ICS, presentation at UNCTAD Ad Hoc Expert Meeting 2011
Maritime Transport: an engine for development • Over 80% of the volume of world merchandise trade (and 70% by value) is carried by sea Developing countries traditional exports: often low value/high volume raw products; increasingly also manufactured goods (Asia). • Maritime transport provides access to global markets: crucial for all countries - developed and developing - including those that are landlocked Key factors for developing countries: connectivity, transport costs • Shipping and ports are key-nodes in global supply-chains and therefore vital for global trade • Seaborne trade is a derived demand – reflecting developments in global economy and merchandise trade • Maritime transport faces various emerging challenges ... including those related to energy and climate change 3
I. Economic growth and merchandise trade - shipping and seaborne trade: some recent trends II. Emerging challenges and some issues to monitor III. Climate change: implications for maritime transport IV. Relevant recent work by UNCTAD 4
World GDP Growth 2007-2013 (Quarter over Quarter, annualised) World Advanced economies Emerging and developing economies 15 10 5 0 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 -5 -10 Source : IMF, World Economic Outlook Update, January 2012
Commodity Prices: Continued Volatility ( 2007-2011) Food Industrial Materials Energy 300 250 200 150 100 50 0 2007M01 2007M04 2007M07 2007M10 2008M01 2008M04 2008M07 2008M10 2009M01 2009M04 2009M07 2009M10 2010M01 2010M04 2010M07 2010M10 2011M01 2011M04 2011M07 2011M10 Source: IMF, World Economic Outlook Update, January 2012
World export volumes of goods , Jan 2006-Aug 2011 Source : UN/DESA World Economic Situation and Prospects, 2012. Based on CBP Netherlands Bureau for Economic Policy • Note the collapse in world merchandise export volumes in 2009 and the recovery in 2010 • Emerging economies (green line) are driving the world recovery in trade (grey line); developed countries (red line) are lagging behind, recovering at a much slower rate
Economic growth and merchandise trade: Key Points Rapid and strong recovery in world economic output and trade (both merchandise and services) in 2010. However, recovery is fragile and its sustainability threatened Data indicate that world economy is on the brink of another major downturn: growth in output and merchandise trade has already slowed considerably during 2011 and is expected to slow down further in 2012 and 2013 Economic woes in many developed economies a major factor in the global slowdown. Failure of policymakers to address jobs crisis and prevent escalation of sovereign debt distress and financial sector fragility would send global economy into another recession. Developing countries and economies in transition expected to continue to stoke engine of world economy, but growth in 2012-2013 expected well below 2010 and 2011. Growth in China and India expected to remain robust. Commodity prices have increased. They remain highly volatile.
Growth in container, tanker and major dry bulks volumes, 1990-2011 (indices, 1990=100) 700 600 Container 500 400 300 Major dry bulks 200 Tanker 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Review of Maritime Transport 2011. Based on Review of Maritime Transport, various issues; and on Clarkson Research Services, Shipping Review and Outlook, Spring 2011.
Global Container Trade, 1990-2011 ( TEUs and annual % change ) 180 20% Million TEU (Left) Percentage Change (Right) 160 15% 140 10% 120 5% 100 80 0% 60 -5% 40 -10% 20 0 -15% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Review of Maritime Transport 2011. Based on Drewry Shipping Consultants, Container Market Review and Forecast 2008/09; and Clarkson Research Services, Container Intelligence Monthly, May 2011. In 2010 container trade volumes experienced an unexpected robust recovery fuelled by a surge in demand across nearly all trade lanes. Global container trade volumes bounced back at 12.9 per cent over 2009, among the strongest growth rates in the history of containerization
World fleet by vessel type (million dwt, 1 January 2011) 1 500 1 400 1 300 1 200 1 100 1 000 900 800 700 600 500 400 300 200 100 0 1980 1985 1990 1995 2000 2005 2010 2011 Other 31 45 49 58 75 49 92 96 11 20 26 44 64 98 169 184 Container 116 106 103 104 101 92 108 109 General cargo 186 232 235 262 276 321 457 532 Dry bulk 339 261 246 268 282 336 450 475 Oil tanker Source: UNCTAD Review of Maritime Transport 2011. Compiled by the UNCTAD secretariat on the basis of data supplied by IHS Fairplay. (Seagoing propelled merchant ships of 100 gross tons and above). Note: By end 2010, the world order book for new ships had been reduced by about 28 per cent compared to its pre- 2008 crisis peak. Reduction amounted to 45 % for container ships, 34 % for tankers, and 18 % for dry bulk carriers.
World seaborne trade by country group, 2010 (% share in tonnage) 70 60 50 40 30 20 10 0 Developed economies Developing economies Transition economies 34 60 6 Loaded 43 56 1 Unloaded Source: UNCTAD Review of Maritime Transport 2011. Developing countries continue to account for the main loading and unloading. Dominance of large emerging DC; concentration of resources/raw materials, which make up the bulk of seaborne trade; increasingly also manufactured cargo Asia is by far the most important loading and unloading region (40 % of total goods loaded/ 55% of total goods unloaded)
Involvement of DCs in Supply of Maritime Transport Services Maritime Sector/Activity Number of Market share of developing developing countries in countries in the top 10 the top 10, % Ship building (dwt) 6 76.4 Ship scrapping (dwt) 5 99.0 Insurance services: P&I (dwt) 2 2.4 Ship financing ($) 1 8.7 2 10.6 Ship classification (dwt) 4 26.1 Ship owning (dwt) 6 53.2 Ship registration (dwt) 5 67.4 Port operation: container terminals (TEU) 5 41.5 Ship operation:container ships (TEU) 8 89.5 Ratings (Head count) 6 75.4 Officers (Head count) Source: UNCTAD Review of Maritime Transport 2011. • Developing countries are expanding their participation in a range of different maritime businesses. • Strong positions in ship scrapping , registration , and the supply of seafarers • Growing market shares in capital-intensive/technologically advanced sectors e.g. ship building and owning . • Ship financing , insurance services and vessel classification : some developing countries have recently been demonstrating their potential to become major market players.
II. Emerging challenges and some relevant issues to monitor Uncertainty relating to the world economic and financial situation «Emerging» global challenges which are interconnected e.g. energy, environmental sustainability and climate change Energy: access, security and prices Climate change: mitigation and adaptation “Globalisation, climate change, and escalating energy costs are a strategic nightmare for shipping companies and they all have one thing in common – fossil fuels . ” Martin Stopford, Clarksons Other issues, including Seafaring crisis Piracy Supply chain security Food and water crises Geopolitical developments including political unrest in certain regions of the world …
How are maritime freight rates affected by rising oil prices? • Shipping heavily reliant on fuel oil for propulsion: implications for cc mitigation efforts and transport/trade costs (energy crisis) • Following peak in oil prices in July 2008, UNCTAD conducted an empirical analysis of the relationship between oil prices and maritime freight rates Oil Prices and Maritime Freight Rates: An Empirical Investigation (UNCTAD/DTL/TLB/2009/2) Focus on container transport, but also some dry and wet bulk trades (iron ore, crude oil). Main findings: • rising oil prices drive up maritime freight rates in all three trades examined, with estimated elasticities varying, depending on the market segment and the specification • For container trade, the effect of oil prices on container freight rates is estimated to be larger in periods of sharply rising and more volatile oil prices, compared to periods of low and stable oil prices • Important implications for maritime transport and trade, in view of continued volatility and expected sustained high levels of oil prices
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