UNCTAD sees rebound in international trade and maritime industry

By Franklin Castrellón

Recovery and sustained average growth in volume of 3.2% for international trade is seen over the next few years, until 2025, reveals the study “Review of Maritime Transport 2017” published by the United Nations Conference on Trade and Development (UNCTAD) on October 25.

This growth is a notable improvement compared to the 2.8% projected in 2017.

In UNCTAD’s opinion, this growth will encompass all segments of the industry, but especially those of containerized cargo and dry bulk cargo.

The boost will come from the Economic Cooperation Agreement signed in July 2017 by Japan and the European Union and the Comprehensive Economic and Trade Agreement signed by the European Union and Canada, which will come into force between 2017-2021.

Container movement per region.

Container movement per region.

Risk factors include the adjustment in China’s economy focused on demand, uncertainty in US trade policy and the decision of the United Kingdom and Northern Ireland to leave the European Union.

The announced recovery represents a relief for the maritime industry after three years with the lowest growth rates since the beginning of the century, excluding 2009, when the greatest effects of the global economic crisis were felt with rigor. This slump had its climax in 2016, when the shipping industry recorded a collective loss estimated at $3,500 million, according to the document.

Stimulated by the start of operations of the expanded Canal in June 2016, the growing trend towards the use of large container ships will continue, both on the main and secondary routes, putting additional pressure on the ports that will be forced to improve their ability to compete for cargo, particularly in the vital business of transshipment.

“Due to the increasing pressure on the competitive capacity of the ports, it is essential to improve their performance levels beyond the optimization of their operations, cost reduction, efficiency in time and commercial promotion objectives,” the study emphasizes. “Increasingly, ports are expected to meet other performance criteria, guaranteeing greater service reliability and standards related to quality, safety, financial sustainability and social inclusion, many of them linked to key objectives of the Sustainable Development Goals.”

The study estimates that from 2000 to 2016 the private port industry has invested some $68,800 million distributed in 292 port projects, including infrastructures, super structures, terminals and navigation channels for container terminals, bulk dry cargo and multipurpose.

Competition and connectivity

One aspect that the studio considers vital to attract cargo is that of competition. “Promoting competition between ports is important to ensure that port operators maximize efficiency and transfer it to their customers.” And it emphasizes: “The competition between ports should not be limited to national ports, but to the ports of neighboring countries.”

Another key factor identified by the study is connectivity. “The national, regional and intercontinental shipping services of fixed itinerary should be interconnected as much as possible,” it says. And in obvious reference to the United States and other countries, warns that cabotage services should not be limited to the shipping of national flag cargo.

It also warns that connectivity should not be limited to the international sphere; it depends on the effective access of the production and consumption centers of a country to the ports (air and sea) that connect it with the international market.

It also addressed an aspect that has been aired for a couple of years in the Logistics Cabinet: “Customs and other border agencies must constantly modernize and be facilitators of trade and transport,” it stresses. In this regard, it notes that UNCTAD offers technical assistance to countries interested in automating and integrating processes related to import, export and re-export.

Noting that maritime transport will continue to be the main means of transporting cargo in the foreseeable future, the United Nations agency points out that “the ministries of transport and planning must understand the factors that determine the connectivity of maritime transport, as well as the opportunities and related risks”, to ensure adequate policies and actions towards optimal national and global connectivity.

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