UNCTAD REVIEW OF MARITIME TRANSPORT (2021)

TABLE OF CONTENTS

Acknowledgements

iii

Abbreviations

Note

xii

Overview

xiv

International maritime trade and port traffic

Volumes of international maritime trade and port traffic

Outlook and longer-term trends

Policy considerations and action areas

Maritime transport and infrastructure

The world fleet

Shipping companies and operations: adapting maritime transport supply

in an uncertain environment

Port services and infrastructure supply

The Impact of COVID-19 on ports: lessons from the UNCTAD TrainForTrade Port

Management Programme

Summary and policy considerations

Freight rates, maritime transport costs and their impact on prices

Record-breaking container freight rates

Dry bulk freight rates also reach highs

Tanker freight rates dip to the lowest levels ever

Economic impact of high container freight rates, particularly in smaller countries

Structural determinants of maritime transport costs

Summary and policy considerations

Technical Notes

Key performance indicators for ports and the shipping fleet

Port calls and turnaround times

Liner shipping connectivity

Port cargo handling performance

Greenhouse gas emissions by the world fleet

105

Summary and policy considerations

106

The COVID-19 seafarer crisis

109

Seafarers crisis - recent developments

111

Seafarer crisis - implementation of the ILO Maritime Labour Convention, 2006,

as amended (MLC 2006)

115

Crew changes and key worker status - other relevant international legal instruments

117

The way forward

119

Legal and regulatory developments and the facilitation

of maritime trade

125

Technological developments in the maritime industry

127

Regulatory developments relating to international shipping, climate change

and other environmental issues

128

Legal and regulatory implications of the COVID-19 pandemic

133

Other legal and regulatory developments affecting transportation

133

Maritime transport within the WTO Trade Facilitation Agreement

135

FAL Convention

139

ASYCUDA ASYHUB case studies

141

Summary and policy considerations

142

Tables

World fleet by principal vessel type, 2020-2021

xvi

Five largest seafarer-supplying countries 2021 supplying countries 2021

1.1

International maritime trade, 1970-2020

1.2

International maritime trade 2019-2020, by type of cargo, country group and region

1.3

World economic growth, 2019-2021

1.4

Growth in the volume of world merchandise trade, 2019-2021

1.5

Tanker trade, 2019-2020

1.6

Dry bulk trade 2019-2020

1.7

Major dry bulk and steel: producers, users, exporters, and importers, 2020

1.8

Containerized trade on East-West trade routes, 2016-2020

1.9

Containerized trade on major East-West trade routes, 2014-2021

1.10

World container port throughput by region, 2019-2020

1.11

International maritime trade developments forecasts, 2021-2026

2.1

World fleet by principal vessel type, 2020-2021

2.2

Age distribution of world merchant fleet by vessel type, 2021

and average age 2020-2021

2.3

Top 25 ship-owning economies, as of 1 January 2021

2.4

Ownership of the world fleet, ranked by carrying capacity in dead-weight tons, 2021

2.5

Leading flags of registration by dead-weight tonnage, 2021

2.6

Leading flags of registration, ranked by value of total tonnage, 2021 (million US dollars)

and principal vessel types

2.7

Deliveries of newbuildings by major vessel types and countries of construction, 2020

2.8

Reported tonnage sold for ship recycling by major vessel type

and country of ship recycling, 2020

2.9

Status of uptake of selected technologies in global shipping, as of 14 June 2021

2.10

Some proposed IMO measures to reduce greenhouse gas emissions

2.11

World fleet by fuel type as of 1 January 2021

2.12

Industrial port projects capitalizing on green opportunities to generate

new revenue streams

2.13

Factors affecting the development of smart green ports

2.14

Port Performance Scorecard indicators, 2016-2020

3.1

Contract freight rates, inter-regional, 2018-2020, $ per 40-foot container

4.1

Time in port, age, and vessel sizes, by vessel type, 2020, world total

4.2

Port calls and median time spent in port, container ships, 2020, top 25 countries

4.3

Top 25 ports under the World Bank IHS Markit Container Port Performance Index 2020

4.4

Minutes per container move, by range of call size, top 25 countries by port calls

101

4.5

Cargo and vessel handling performance for dry bulk carriers. Top 30 economies

by vessel arrivals, average values for 2018 to first half of 2021

103

4.6

Cargo and vessel handling performance for tankers. Top 30 countries

by vessel arrivals, average values for 2018 to first half of 2021

104

5.1

Neptune Declaration Crew Change Indicator, July 2021

113

5.2

Five largest seafarer-supply countries, 2021

115

6.1

Key performance indicators of the Kenya Trade Information Portal

138

Figures

International maritime trade, world gross domestic product (GDP)

and maritime trade-to-GDP ratio, 2006 to 2021

xii

Simulated impact of current container freight rate surge on import

and consumer price levels

Median time in port, number of port calls, and maximum vessel sizes,

by country, container ships, 2020

xvii

1.1

International maritime trade, world gross domestic product (GDP)

and maritime trade-to-GDP ratio, 2006 to 2021

1.2

Participation of developing countries in international maritime trade, selected years

1.3

International maritime trade, by region, 2020

1.4

International maritime trade by cargo type, selected years

1.5

International maritime trade in cargo ton-miles, 2001-2021

1.6

World capesize dry bulk trade by exporting region in tons and ton-miles, 2019-2020

1.7

World ultra-large tanker trade by exporting region in ton and ton-miles , 2018-2020

1.8

Global containerized trade, 1996-2021

1.9

Global containerized trade by route, 2020

1.10

World container port throughput by region, 2019-2020

1.11

Leading 20 global container ports, 2019-2020

2.1

Annual growth rate of world fleet, dead-weight tonnage, 2000-2020

2.2

Age distribution of the global fleet, share of the global carrying capacity, 2012-2021

2.3

Age distribution of the fleet, as at beginning of 2021, per development status groups

2.4

Share of mega-vessels in the global container ship fleet carrying capacity

by TEU, 2011-2021

2.5

Number of mega-containerships

2.6

Mega-vessel distinct journeys through the Panama and Suez canals,

daily averages, from 2012 until 4 June 2021

2.7

Live and on-order global fleet by ship type

2.8

Growth of world fleet orderbook, 2012-2021, percentage change

in dead-weight tonnage

2.9

World tonnage on order, selected ship types, 2000-2021

2.10

Percentage change in cost intensity by ship segment, average size

and median distance travelled

2.11

Cargo and revenue, 2016-2020

2.12

Average revenue mix of ports, 2016-2020

3.1

Growth of demand and supply in container shipping, 2007-2021, percentage

3.2

CCFI composite index, 2011-2021 (quarterly)

3.3

Shanghai Containerized Freight Index weekly spot rates, 1 July 2011 to 30 July 2021,

selected routes

3.4

New ConTex index, July 2011-July 2021

3.5

Baltic Exchange Dry Index, January 2010-July 2021

3.6

Average weighted earnings all bulkers ($/day), July 2001-July 2021

3.7

Average earnings, all tankers, July 2011-July 2021

3.8

Simulated impact of current container freight rate surge on import

and consumer price levels

3.9

Simulated impacts of the container freight rate surge on consumer price levels,

by country and by product

3.10

Simulated impacts of container freight rate surges on prices for importers,

consumers and firms, global average

3.11

Simulated impact of container freight rate surges on production costs,

by country and size of economy

3.12

Simulated dynamic impacts of container freight rate increase on industrial production

3.13

Transport costs for importing goods by transport mode, world, LDCs,

and LLDCs, 2016, percentage of FOB value

3.14

Transport costs heatmap for importing goods, all modes of transport, 2016,

percentage of FOB value

3.15

Maritime transport costs for importing goods and distances from trading partners

3.16

Maritime transport costs for importing goods, by country and size of economy

3.17

Impact of structural determinants on maritime transport costs for importing goods

3.18

Maritime transport costs by direction of the trade imbalance

3.19

Impacts of trade imbalance and trade volume on maritime transport costs

4.1

Port calls per half year, world total, 2018-2020

4.2

Port calls per half year, regional totals, 2018-2020

4.3

Container ship port calls and time in port, 2020

4.4

Container ship port calls and maximum ship sizes, 2020

4.5

Container ship port calls in Africa and time in port, 2020

4.6

Container ship port calls in Africa and maximum ship sizes, 2020

4.7

Median time in port, number of port calls, and maximum vessel sizes, per country,

container ships, 2020

4.8

Liner shipping connectivity index, top 10 countries, first quarter 2006

to second quarter 2021

4.9

Port Liner Shipping Connectivity Index, top 10 ports as of second quarter 2021,

first quarter 2006 to second quarter 2021

4.10

Liner Shipping Connectivity Index, country and port level, 2020

4.11

Trends in global container ship deployment, first quarter 2006 to second quarter 2021

4.12

Trends in vessel sizes and number of companies providing services,

selected countries, first quarter 2006 to second quarter 2021

4.13

Relationship between maximum vessel sizes, deployed capacity, and the number

of companies, second quarter 2021

4.14

Liner Shipping Bilateral Connectivity Index (LSBCI) and its components,

first quarter 2006 to second quarter 2021

4.15

Minutes per container move for container ships, by range of port call size

100

4.16

Time in port (hours) for container ships, by range of port call size

100

4.17

Correlation between time in port (hours) and minutes per container move, all call sizes

101

4.18

Correlation between time in port (hours) and minutes per container move,

only calls with 1001 to 1500 containers per call

101

4.19

Carbon dioxide emissions by vessel type, monthly, million tons, 2011-2021

105

4.20

Carbon dioxide emissions by flag state, annual, 2011-2020, million tons

106

vii

ABBREVIATIONS

AfCFTA

African Continental Free Trade Area

AGTC

European Agreement on Important International Combined Transport Lines

APEC

Asia-Pacific Economic Cooperation

ASYCUDA

Automated System for Customs Data

ASYHUB

ASYCUDA data integration system

B2B

business to business

B2G

business to government

BIMCO

Baltic and International Maritime Council

CAPEX

capital expenditure

CCFI

China Containerized Freight Index

CIF

cost, insurance and freight

CII

Carbon Intensity Indicator

CO₂

carbon dioxide

CPPI

Container Port Performance Index

DGMT

Digitizing Global Maritime Trade

dwt

deadweight tonnage

EBITDA

earnings before interest, taxes, depreciation and amortization

ECA

Economic Commission for Africa

ECE

United Nations Economic Commission for Europe

ECLAC

United Nations Economic Commission for Latin America and the Caribbean

EEDI

Energy Efficiency Design Index

EEXI

Energy Efficiency Existing Ship Index

ESCAP

United Nations Economic Commission for Asia and the Pacific

ESCWA

United Nations Economic and Social Commission for Western Asia

eSW

electronic single window

eTIR

electronic International Road Transport system

European Union

FAL Convention

Convention Facilitation of International Maritime Traffic

FIATA

International Federation of Freight Forwarders Associations

FOB

free on board

G2B

government to business

GAD

gender and development

GDP

Gross domestic product

Gigaton

GTCDIT

Global Transport Costs Dataset for International Trade

GVC

global value chain

HFO

heavy fuel oil

ICAO

International Civil Aviation Organization

ICS

Institute Of Chartered Shipbrokers

IFO

intermediate fuel oil

ILO

International Labour Organization

IMF

International Monetary Fund

IMO

International Maritime Organisation

IOM

International Organization for Migration

IOPC FUNDS

International Oil Pollution Compensation Funds

IRU

International Road Transport Union

ISM

International Safety Management

ISO

International Standards Organization

ISPS

International Ship and Port Facility Security

ITF

International Transport Workers' Federation

ITS

intelligent transport systems

kilowatt

LDC

least developed country

LLDC

landlocked developing country

LNG

liquified natural gas

LPG

liquified petroleum gas

MARPOL

International Convention for the Prevention of Pollution from Ships

Convention

MASS

maritime autonomous surface ship

MDH

Maritime Declaration of Health

MDO

marine diesel oil

MEPC

IMO Marine Environment Protection Committee

MGO

marine gasoil

MLC

Maritime Labour Convention

MMT-RDM

Multi-Modal Transport Reference Data Model

MNSW

maritime national single window

MSC

IMO Maritime Safety Committee

MSW

maritime single window

NTFC

National Trade Facilitation Committee

OECD

Organisation for Economic Co-operation and Development

OPEC

Organization of the Petroleum Exporting Countries

PCS

port community system

PHEIC

public health emergency of international concern

PIANC

World Association for Waterborne Transport Infrastructure

PPA

Philippine Ports Authority

PPPs

public-private partnerships

PPS

Port Performance Scorecard

R&D

research and development

SCFI

Shanghai Containerized Freight Index

SID

Seafarers’ Identity Document

SIDS

small island developing states

STCW

Standards of Training, Certification and Watchkeeping for Seafarers

TEU

twenty-foot-equivalent unit

TIP

Trade Information Portal

UN/CEFACT

The United Nations Centre for Trade Facilitation and Electronic Business

UNCITRAL

United Nations Commission on International Trade Law

UNCTAD

United Nations Conference on Trade and Development

UNDESA

UN Department of Economic and Social Affairs

UNFCCC

United Nations Framework Convention on Climate Change

United Nations Office of the High Representative for the Least Developed

UNOHRLLS

Countries, Landlocked Developing Countries and Small Island

Developing States

VLSFO

very low sulphur fuel oil

WCO

World Customs Organization

WHO

World Health Organization

WIOD

World Input-Output Database

WTO

World Trade Organization

NOTE

The Review of Maritime Transport is a recurrent publication prepared by the UNCTAD secretariat

since 1968 with the aim of fostering the transparency of maritime markets and analysing relevant

developments. Any factual or editorial corrections that may prove necessary, based on comments made

by Governments, will be reflected in a corrigendum to be issued subsequently.

This edition of the Review covers data and events from January 2020 until June 2021. Where possible,

every effort has been made to reflect more recent developments.

All references to dollars ($) are to United States dollars, unless otherwise stated.

“Ton” means metric ton (1,000 kg) and “mile” means nautical mile, unless otherwise stated.

Because of rounding, details and percentages presented in tables do not necessarily add up to the

totals.

Two dots (..) in a statistical table indicate that data are not available or are not reported separately.

All websites were accessed in September 2021.

The terms “countries” and “economies” refer to countries, territories or areas.

Since 2014, the Review of Maritime Transport does not include printed statistical annexes. UNCTAD

maritime statistics are accessible via the following links:

All datasets: http://stats.unctad.org/maritime

Merchant fleet by flag of registration: http://stats.unctad.org/fleet

Share of the world merchant fleet value by flag of registration: http://stats.unctad.org/vesselvalue_

registration

Merchant fleet by country of ownership: http://stats.unctad.org/fleetownership

Share of the world merchant fleet value by country of beneficial ownership: http://stats.unctad.org/

vesselvalue_ownership

Ship recycling by country: http://stats.unctad.org/shiprecycling

Shipbuilding by country in which built: http://stats.unctad.org/shipbuilding

Seafarer supply: http://stats.unctad.org/seafarersupply

Liner shipping connectivity index: http://stats.unctad.org/lsci

Liner shipping bilateral connectivity index: http://stats.unctad.org/lsbci

Container port throughput: http://stats.unctad.org/teu

Port liner shipping connectivity index: http://stats.unctad.org/plsci

Port call performance (Time spent in ports, vessel age and size), annual: http://stats.unctad.org/

portcalls_detail_a

Port call performance (Time spent in ports, vessel age & size), semi-annual: http://stats.unctad.org/

portcalls_detail_sa

Number of port calls, annual: http://stats.unctad.org/portcalls_number_a

Number of port calls, semi-annual: http://stats.unctad.org/portcalls_number_sa

Seaborne trade: http://stats.unctad.org/seabornetrade

National maritime country profiles: http://unctadstat.unctad.org/CountryProfile/en-GB/index.html

xii

Vessel groupings used in the Review of Maritime Transport

Group

Constituent ship types

Oil tankers

Bulk carriers

Bulk carriers, combination carriers

General cargo ships

Multi-purpose and project vessels, roll-on roll-off cargo ships,

general cargo ships

Container ships

Fully cellular container ships

Other ships

Liquefied petroleum gas carriers, liquefied natural gas carriers,

parcel (chemical) tankers, specialized tankers, refrigerated container

ships, offshore supply vessels, tugboats, dredgers, cruise, ferries,

other non-cargo ships

Total all ships

Includes all the above-mentioned vessel types

Approximate vessel-size groups according to commonly used shipping terminology

Crude oil tankers

Ultralarge crude carrier

320,000 dead-weight tons (dwt) and above

Very large crude carrier

200,000-319,999 dwt

Suezmax crude tanker

125,000-199,999 dwt

Aframax/longe-range 2

crude tanker

85,000-124,999 dwt

Panamax/long-range 1

crude tanker

55,000-84,999 dwt

Medium-range tankers

40,000-54,999 dwt

Short-range/Handy

tankers

25,000-39,000 dwt

Dry bulk and ore carriers

Capesize bulk carrier

100,000 dwt and above

Panamax bulk carrier

65,000-99,999 dwt

Handymax bulk carrier

40,000-64,999 dwt

Handysize bulk carrier

10,000-39,999 dwt

Container ships

Neo-Panamax

Container ships that can transit the expanded locks of the Panama

Canal with up to a maximum 49 m beam and 366 m length overall;

fleets with a capacity of 12,000-14,999 20-foot equivalent units (TEUs)

include some ships that are too large to transit the expanded locks of

the Panama Canal based on current dimension restrictions.

Panamax

Container ships above 3,000 TEUs with a beam below 33.2 m, i.e., the

largest size vessels that can transit the old locks of the Panama Canal.

Post Panamax

Fleets with a capacity greater than 15,000 TEUs include some ships

that are able to transit the expanded locks.

Source: Clarksons Research.

Note: Unless otherwise indicated, the ships mentioned in the Review of Maritime Transport include all propelled seagoing

merchant vessels of 100 gross tons and above, excluding inland waterway vessels, fishing vessels, military vessels, yachts,

and fixed and mobile offshore platforms and barges (with the exception of floating production storage, offloading units and

drillships).

xiii

OVERVIEW

Maritime transport defied the COVID-19 disruption. In 2020, volumes fell less

dramatically than expected and by the end of the year had rebounded, laying

the foundations for a transformation in global supply chains and new maritime

trade patterns

The COVID-19 pandemic disrupted maritime transport, though the outcome was less damaging than

initially feared. The shock in the first half of 2020 caused maritime trade to contract by 3.8 per cent in the

year 2020. But in the second half of the year there was a nascent, if asymmetric, recovery, and by the third

quarter, volumes had returned, for both containerized trade and dry bulk commodities. However, there

has yet to be a full recovery for tanker shipping.

Maritime trade has performed better than expected partly because the COVID-19 pandemic unfolded in

phases and at different speeds, with diverging paths across regions and markets. The rebound in trade

flows was also the result of large stimulus packages, and increased consumer spending on goods, with

a growth in e-commerce, especially in the United States. Later, there was more general optimism in

advanced regions from the rollout of vaccines. But it was also partly due to unlocking pent-up demand for

cars, for example, and to restocking and inventory-building. The rebound was fairly swift because, unlike

the global financial crisis of 2009, the downturn was not synchronized across the world.

In 2021, in tandem with the recovery in merchandise trade and world output, maritime trade is projected

to increase by 4.3 per cent (figure 1).The medium-term outlook also remains positive, though subject to

mounting risks and uncertainties, and moderated in line with projected lower growth in the world economy.

Over the past two decades, compound annual growth in maritime trade has been 2.9 per cent, but over

the period 2022-2026, UNCTAD expects that rate to slow to 2.4 per cent.

Figure 1

International maritime trade, world gross domestic product (GDP)

and maritime trade-to-GDP ratio, 2006 to 2021

(percentage annual change and ratio)

Average ratio 2006-2014

Average ratio 2015-2021

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

-1

-2

-3

-4

-5

-6

GDP

Maritime trade

Maritime trade-to-GDP ratio

Average ratio

Source: UNCTAD calculations, based on the Review of Maritime Transport, various issues, data from UNCTADstat and

table 1.1 of the UNCTAD Trade and Development Report 2021. From recovery to resilience: The development dimension.

Maritime transport navigated through the pandemic, but there was an

unprecedented humanitarian crisis for seafarers

While carriers generally managed to mitigate the shock and disruption, port and landside operations

found it more difficult to adjust, and seafarers were in a precarious situation as the pandemic triggered

an unprecedented global crew-change crisis. The health risks and related travel restrictions meant that

hundreds of thousands of seafarers could not return home, while an equivalent number were unable to

join their ships and to provide for their families.

xiv

Hardest hit has been tanker shipping, but the impact has been less for

containerized trade, gas shipments, and dry bulk commodities

Lockdowns, travel restrictions and production cuts have compressed the demand for fuel. In 2020,

shipments of crude oil, refined petroleum products, and gas together fell by 7.7 per cent. The impact

was less, however, for dry bulk commodity trade: supported by strong demand from China for iron ore

and grain, total dry bulk trade fell by only 1.5 per cent. Containerized trade also resisted, falling by only

1.1 per cent. Global container port throughput fell at a roughly similar rate - and in 2020 totalled 815.6

million twenty-foot equivalent units (TEU).

Logistical bottlenecks, and soaring costs, along with an asymmetric

recovery, have heightened uncertainty

Maritime trade weathered the storm in 2020 and the short-term outlook remains positive. However, the

emerging multi-paced recovery is inherently fragile as many countries and regions continue to lag. In

addition to new pandemic risks and the dangers of a two-track vaccination pattern where developing

countries continue to fall behind, other risks are casting a shadow on the recovery. While not all countries

have been able to deploy large stimuli packages and support measures, an untimely ending of the existing

support measures in advanced economies could potentially stifle growth and hinder the nascent recovery.

The pandemic’s impacts and legacies are likely to linger and the future shape and contours of the next

normal for the world economy remain uncertain.

The nascent recovery has also been hindered by supply-chain bottlenecks. The rebound in trade,

combined with pandemic-induced restrictions in logistics operations has led to shortages in equipment

and containers, along with less reliable services, congested ports and longer delays and dwell times.

For shipping, on the other hand, soaring freight rates, surcharges and fees have bolstered profitability.

Freight rates increased further following the March 2021 closure of the Suez Canal. The grounding of

the 20,150-TEU container ship Ever Given blocked the canal, delaying ships heading for Europe, and

increasing the constraints on ship and port capacity. Some voyages had to be re-routed around the Cape,

adding up to 7,000 miles to the distance.

Whether the recovery lasts will depend critically on the path of the pandemic. Fresh waves of infection,

combined with low vaccination rates, especially in developing countries, have led to new lockdowns

and border closures. A broad-based recovery hinges to a large extent on a worldwide vaccine rollout.

The International Monetary Fund estimates that $50 billion are required to end the pandemic and roll out

vaccines across developing countries. This would bring not just health but also economic benefits since

it would be tantamount to a large scale economic stimulus package that could accelerate economic

recovery and by 2025 generate some $9 trillion in additional global output.

Seafarers are increasingly being recognized as “key workers” who are keeping shipping and trade moving,

while also being at the front line of the health crisis. Since seafarers come predominantly from developing

regions, industry and government should move quickly to implement vaccine procurement and distribution

plans.

The longer-term outlook is being reshaped by structural megatrends

that transcend the pandemic and its immediate impact

Eventually, the logistical hurdles caused by large swings in demand could dissipate as global trade

patterns normalize. However, the pandemic has also accelerated megatrends that in the longer-term

could transform the maritime transport landscape.

By exposing the vulnerabilities of existing supply chains, the COVID-19 disruption has sharpened the need

to build resilience. COVID-19 emphasized the importance of ensuring continuity in supply chains and the

need for them to become more resilient, responsive, and agile.

Discussions over the future of globalization have ushered calls to take a fresher look at the configuration of

the extended supply chains to reduce heavy reliance on distant suppliers. Some are arguing that reshoring

and nearshoring will accelerate, resulting in deep reconfiguration of supply chains. While the structural

trends that had emerged over a decade ago and accelerated during recent trade tensions are likely to

result in changes to globalization patterns and features, an outright end to globalization per se is unlikely.

It may be fairly straightforward to reshore labour-intensive and low-value production, but it is more complex

to move production and switch suppliers for mid-and high-value-added manufacturing. Instead, enterprises

are likely to blend local and global sourcing, modifying their strategies according to product and geography

- with a blend of reshoring, diversification, replication, and regionalization. Nevertheless, for the near future

China is likely to remain a leading manufacturing site. Automation could make reshoring and nearshoring

more economically viable in the longer term. Hybrid operating models involving just-in-time (i.e., material

moved just before its use in the manufacturing process) and just-in-case (i.e., where companies keep

large inventories to minimize stocks being sold out) supply chain models are likely to emerge. Combined,

these trends will change distances and routes, increasing the need for more flexible shipping services.

They also entail implications for vessel types and sizes, ports of call, and distance travelled.

The pandemic has accelerated pre-existing digitalisation and environmental sustainability trends.

Technological advances have enabled shipping and ports to continue operations while minimizing

interaction and physical contact. New technologies have also stimulated the rise of online commerce

which has transformed consumer shopping habits and spending patterns. The growth in online trade

has increased the demand for distribution facilities and warehousing that are digitally enabled and offer

value-added services. All these developments are expected to generate new business opportunities for

shipping and ports as well as for other players in the maritime supply chain.

Technology will also be critical for advancing environmental sustainability. While designing their stimulus

packages and post-pandemic plans, many governments aim to harness the synergies between technology,

environmental protection, efficiency, and resilience. Businesses and governments recognize that adapting

to the post-pandemic world and building back better requires adding economic, social and environmental

value and creating new business opportunities, not least for maritime transport.

Supply not keeping pace with demand

2020, the global commercial shipping fleet grew by

3 per cent, reaching

99,800 ships

100 gross tons and above. By January

2021, capacity was equivalent to

2,13 billion

dead weight tons

(dwt)

(table

1). During

2020, delivery of ships declined by

12 per cent,

partly due to lockdown-induced labour

shortages that disrupted marine-industrial activity.

The ships delivered were mostly bulk carriers, followed by oil tankers and container ships. As owners and

operators tried to cope with tight vessel supply, they were also buying more second-hand ships with a

resulting increase in prices. Recycling rates also increased in 2020, although compared to previous years,

the levels remain low.

During 2020, orders for new ships had declined by 16 per cent, continuing a downward trend observed in

previous years. In early 2021, however, shipping companies reacted to the capacity constraints with a surge

of new orders, especially for container ships for which orders were the highest for the last two decades.

There were also more orders for LNG carriers.

Table 1

World fleet by principal vessel type, 2020-2021

(thousand dead-weight tons and percentage)

Principal types

2020

2021

Percentage change

2021 over 2020

Bulk carriers

879 725

913 032

42.47%

42.77%

3.79%

Oil tankers

601 342

619 148

29.03%

29.00%

2.96%

Container ships

274 973

281 784

13.27%

13.20%

2.48%

Other types of ships:

238 705

243 922

11.52%

11.43%

2.19%

Offshore supply

84 049

84 094

4.06%

3.94%

0.05%

Gas carriers

73 685

77 455

3.56%

3.63%

5.12%

Chemical tankers

47 480

48 858

2.29%

2.90%

Other/not available

25 500

25 407

1.23%

1.19%

-0.36%

Ferries and passenger ships

7 992

8 109

0.39%

0.38%

1.46%

General cargo ships

76 893

76 754

3.71%

3.60%

-0.18%

World total

2 071 638

2 134 640

3.04%

Source: UNCTAD calculations, based on data from Clarksons Research.

Note: Propelled seagoing merchant vessels of 100 tons and above; beginning-of-year figures.

xvi

During the second half of 2020, and into 2021, world trade gradually recovered but supply was less

elastic and constrained by COVID-19 related delays and congestion - leading to a significant increase in

container freight rates.

The future demand/supply balance will also be impacted by regulatory requirements to align shipping

operations with decarbonization targets. Introduced under the auspices of the International Maritime

Organization (IMO), these new regulations will require replacing some of the existing fleet so will entail

significant costs. As well as creating a degree of uncertainty, this could reduce the capital available to

expand the fleet to cater for trade growth.

Cost pressure and soaring rates and surcharges would weigh on smaller

players and prices

Since the second half of 2020 there has been an increase in freight rates. While demand for containerized

goods has been higher than expected, shipping capacity has been constrained by logistical hurdles and

bottlenecks and shortages in container shipping equipment. Unreliable schedules, and port congestion

have also led to a surge in surcharges and fees, including demurrage and detention fees.

These soaring costs are a challenge for all traders and supply chain managers, but especially for smaller

shippers who, compared with the larger players, may be less able to absorb the additional expense and

are at a disadvantage when negotiating rates and booking space on ships. Smaller shippers and low-value

paying cargo may thus find it difficult to secure service contracts and could see their margins eroded.

Freight rates are expected to remain high. Demand is strong and there is growing uncertainty on the supply

side, with concerns about the efficiency of transport systems and port operations. In the face of these cost

pressures and lasting market disruption, it is increasingly important to monitor market behaviour and ensure

transparency when it comes to setting rates, fees, and surcharges. There have been calls for governments to

intervene, and for regulators to apply closer oversight and address unfair market practices.

If sustained, the current surge in container freight rates, will significantly increase both import and consumer

prices. UNCTAD’s simulation model suggests that global import price levels will increase on average by

11 per cent as a result of the freight rate increases (figure 2). Hardest hit will be the small island developing

states (SIDS) who depend for their merchandise imports primarily on maritime transport and who are simulated

to face a cumulative increase of 24 per cent with a time lag of about a year.

Higher container freight rates will also have a sizeable impact on consumer prices. If container freight

rates remain at their current high levels, then in 2023 global consumer prices are projected to be 1.5 per

cent higher than they would have been without the freight rate surge. The impact is expected to be more

significant for smaller economies that depend heavily on imported goods for much of their consumption

needs. In SIDS, the cumulative increase in consumer prices is expected to be 7.5 per cent and in the

Least Developed Countries (LDCs) 2.2 per cent.

Figure 2

Simulated impact of current container freight rate surge on import and consumer

price levels

Import price increases

Consumer price increases

(%)

7.5

24.2

10.6

8.7

2.2

1.5

3.2

0.6

LDC

LLDC

SIDS

World

LDC

LLDC

SIDS

World

Sources: Based on data provided by Clarksons Research, Shipping Intelligence Network, the International Monetary Fund,

International Financial Statistics and Direction of Trade Statistics, UNCTADstat, and the World Bank, World Integrated Trade

Solution and Commodity Price Data (The Pink Sheet).

Note: The impact of container freight rate surges on prices is assessed based on a 243 per cent increase in the China

Containerized Freight Composite Index between August 2020 and August 2021. The simulation model assumes that freight

rates in August 2021 will be sustained over the remaining simulation period (September 2021 to December 2023) and all other

factors are held constant over the entire simulation period (August 2020 to December 2023).

xvii

Some goods will be affected more than others by the surge in container freight rates. Most exposed are

goods manufactured through integrated supply chains. Globalized production processes entail a greater

use of shipping, with intermediate goods often crossing borders multiple times within and between

regions. This is the case, for example, for East Asian goods destined for major markets in North America

and Europe. For computers, and electronic and optical products, for example, the consumer price uplift

induced by the current freight rate surge could be 11 per cent.

Higher shipping costs will also affect some low-value-added products: for furniture, for example, and

textiles, garments and leather products, the consumer price uplifts could be ten per cent. These increases

could erode the competitive advantages of smaller economies that produce many of these goods. At the

same time, these countries will find it more difficult to import the high-technology machinery and industrial

materials they need to move up the value chain, diversify their economies and achieve the Sustainable

Development Goals (SDGs).

Even in major economies, lingering high container freight rates and disruption in maritime transport in the

short- to medium-term threaten to undermine recovery. UNCTAD’s analysis concludes that in the United

States and the euro area, for example, a 10 per cent increase in container freight rates could lead to a

cumulative contraction in industrial production of around 1 per cent.

Structural factors keep maritime transport costs higher in developing

regions

The current historical highs in freight rates are largely driven by pandemic-induced shocks and unexpected

upward swings in shipping demand. But in the longer term, shipping and port prices are driven by structural

factors such as port infrastructure, economies of scale, trade imbalances, trade facilitation, and shipping

connectivity - all of which have lasting impacts on maritime transport costs and trade competitiveness. An

analysis based on a new UNCTAD-World Bank transport costs dataset, shows that significant structural

improvements could reduce maritime transport costs by around four per cent. Interventions and policies

that address the structural determinants of maritime transport costs can thus help mitigate the impacts

from cyclical factors and disruptions.

Other structural issues that will increase prices include the new regulations on decarbonizing shipping.

The recently adopted IMO short-term measure on greenhouse gas reduction is expected to reduce

average shipping speeds and increase maritime transport costs, especially for developing countries, and

in particular the SIDS.

COVID-19 slows operations for ships and ports

In the first half of 2020, reflecting the slump in shipping demand, cargo-carrying ships made fewer port

calls. The number of calls subsequently increased, particularly in Europe, East Asia, and South-Eastern

Asia, albeit not yet to pre-pandemic levels.

In 2020, terminal operators, authorities, and intermodal transport providers took measures to contain

COVID-19 and, as a result, ships had to spend more time in ports that were operating more slowly. The

greatest delays were for dry break bulk carriers for which cargo operations tend to be less automated and

more labour-intensive so were slowed by measures to reduce social contact.

Turnaround times can differ significantly between countries (figure 3). One group of countries with faster

turnarounds comprises those with fewer arrivals and only small ships and with only few containers loaded

and unloaded during each port call. These include Dominica, Saint Kitts and Nevis, and Saint Vincent

and the Grenadines. Another group with fast turnarounds comprises those that have the latest port

technologies and infrastructure and can accommodate the largest container vessels; they benefit from

economies of scale and thus tend to attract the highest number of port calls. These include Japan, Hong

Kong China, and Taiwan Province of China. Efficient ports initiate a positive feed-back loop: high efficiency

makes their ports attractive as ports of call, further boosting the number of arrivals. Countries in the middle

of the distribution report a wide range of median port waiting times, reflecting differences in efficiency and

other variables such as vessel age and cargo throughput.

Shipping and port performance is generally lower in developing countries. They have higher transport

costs and lower connectivity because they are often further away from their overseas markets and are

hampered by diseconomies of scale and lower levels of digitalization.

xviii

Figure 3

Median time in port, number of port calls, and maximum vessel sizes, by country,

container ships, 2020

8 days

Maximum vessel

size (TEU)

4 days

1 000

5 000

10 000

2 days

15 000

20 000

1 day

0.50 day

100

1 000

10 000

100 000

Port calls

Source: UNCTAD, based on data provided by MarineTraffic. Both axes in logarithmic scale.

Note: Ships of 1,000 GT and above. For the complete table of countries, see http://stats.unctad.org/maritime.

Positive trends in port governance and gender participation

Each year, UNCTAD uses data from its TrainForTrade Port Management Programme to benchmark

countries against each other using the Port Performance Scorecard (PPS). Many other port performance

projects focus on service provision such as cargo handling, but the PPS, which uses data for 26 indicators,

enables comparisons between entire port entities, providing data that is valuable for strategic planning

within ports and for evidence-based policy analysis at regional and state levels.

Member ports’ annual throughput in 2020 ranged from 1.5 million to 80.9 million tonnes. Around half of

were in the smallest category, less than 5 million tonnes, and the medium category, 5 million to 10 million

tonnes, a range of volumes that was similar across all regions.

Since 2015, one of the six main categories in the PPS scorecard has been the rate of female participation

in the port workforce. In 2019 and 2020, this remained low, at around 18 per cent. The rate was

significantly higher in Europe at 25 per cent, though even here roles are not equally distributed between

men and women. Women tend to be better represented in management and administrative roles, for

which between 2019 and 2020 the proportion of women increased from 38 to 42 per cent. In this case,

Asian members were above average at 52 per cent compared with those in Europe at 39 per cent.

Women are far less likely to be working in cargo handling port operations. These results highlight the need

for strategic policy interventions to deliver on Sustainable Development Goal 5 to “Achieve gender equality

and empower all women and girls.”

Port and shipping performance depend on trade and transport

facilitation

Efficient maritime transport depends on effective trade and transport facilitation that reduces the time and

cost of customs and other trade procedures and integrate new technologies for administrative formalities.

Boosts the performance of the entire supply chain with positive effects on maritime transport.

The need for cross-border trade facilitation was highlighted by the COVID-19 pandemic, particularly for

trade in medical equipment, drugs and emergency goods such as vaccines and personal protection

equipment (PPE) - which could be held up at ports by red tape or by slow clearance procedures to

comply with regulatory requirements.

In recent years, the introduction of new technology in administrative processes has boosted efficiency

along the logistics supply chain. This has involved digitalization and automation of customs processes,

xix

paperless formalities, and the introduction of single-window services - the impetus for which was boosted

during the COVID-19 pandemic.

An example of the use of ICT, is UNCTAD’s Automated System for Customs Data (ASYCUDA) which

involves automation and digitalization in supply chains. A recent development, the ASYHUB solution,

smooths data transfer between ports of departure and arrival - using risk management concepts to help

speed up clearance procedures and avoid goods being stuck in ports unnecessarily.

Another ICT innovation based on UNCTAD technology is the Trade Information Portal (TIP) - a website

in each country that provides traders with easy access to information about trade regulations and

procedures. The UNCTAD TIP offers importers and exporters online, step-by-step guides to trade-related

procedures and also helps the country fulfil its obligations arising from the World Trade Organization Trade

Facilitation Agreement. Today, 29 TIPs, based on UNCTAD technology, are being implemented globally

by UNCTAD and the International Trade Centre. Results have been very positive. TIPs are most advanced

in East Africa, where in Kenya, for example, greater transparency and simplification of a total of 52 trade

procedures so far have reduced the time spent waiting in the queue, at the counter and in between steps

by 110 hours, and the administrative fees for these 52 procedures by $482, i.e., about $11 per trade

procedure on average.

Digitalization allows a paperless environment whereby trade procedures are all carried out online. For the

traders this reduces time and cost and increases transparency and market access, while also reducing

physical contact and the risks of contagion. In addition, smart digital solutions improve public administration

of trade and boost efficiency in export, import and transit operations. Moreover, by minimizing the use of

paper, trade facilitation can also help mitigate climate change.

Reforms in trade facilitation have been promoted by the multilateral trading system, particularly through

the WTO Facilitation Agreement and the IMO Convention on Facilitation of International Maritime Traffic.

These agreements provide common standards and regulations that have proved especially valuable

during the COVID-19 pandemic. By providing governments with guidance and incentives for reforming

trade facilitation, they have paved the way for further digitalization and enhanced transparency, and

for rationalizing administrative formalities. These developments also promote robust public-private

partnerships (PPPs), such as the National Trade Facilitation Committees and Port Community Systems

that involve the business community in port operations. Efficient maritime trade and transport will depend

on aligning and streamlining the mandates and work of the various PPPs.

A continuing crisis for seafarers stranded at sea

Globally there around 1.9 million seafarers working to facilitate the way we live. The BIMCO/ICS Seafarer

Workforce Report 2021 estimated the global supply of seafarers at 1,892,720, up from 1,647,494 in 2015. Of

these, 857,540 were officers, and 1,035,180 were ratings - the skilled seafarers who carry out support work.

The five largest seafarer-supplying countries were the Philippines, the Russian Federation, Indonesia, China,

and India, representing 44 per cent of the global workforce (table 2).

Table 2

Five largest seafarer-supplying countries 2021 supplying countries 2021

All Seafarers

Officers

Ratings

Philippines

Russian Federation

Indonesia

China

Indonesia

China

India

China

India

Indonesia

India

Source: ISF and BIMCO, Seafarer Workforce Report 2021, London, 2021.

For the supplying countries seafarers are important sources of income. In 2019, the Philippines, for

example, earned $30.1 billion from its overseas workers - 9.3 per cent of GDP and 7.3 per cent of gross

national income (GNI) - of which $6.5 billion came from its seafarers. In 2020 total remittances fell 0.8 per

cent to $29.9 billion, with those from seafarers falling 2.8 per cent to $6.4 billion.

During the COVID-19 pandemic, seafarers continued to demonstrate great professionalism and dedication,

supporting the delivery of food, medical supplies, fuel, and other essential goods, and helping keep supply

chains active and global commerce running.

However, hundreds of thousands of seafarers remain stranded at sea. Each month, crews need to be

changed over - to prevent fatigue and comply with international maritime regulations for safety, health

and welfare. Responding to COVID-19, governments closed many borders and imposed lockdowns and

prohibited people from disembarking thus temporarily suspending crew changes. As a consequence,

large numbers of seafarers have been unable to be replaced or repatriated after long tours of duty and had

to extend their service on board. Even over a year into the pandemic, due to these restrictions, and the

shortage of international flights, according to latest estimates by the International Chamber of Shipping,

around 250,000 seafarers remain stranded, far beyond the expiration of their contracts. Yet, there is still

no global consensus on uniform measures to allow for efficient crew changes and transfer.

During the pandemic, stakeholders, including international bodies, governments, and industry, have

issued recommendations and guidance - aiming to ensure that seafarers are healthy and protected

from COVID-19, have access to medical care, and are recognized as key workers and are vaccinated

as a matter of priority, and also that ships and port facilities meet international sanitary requirements.

Nevertheless, as the pandemic continues for a second year, seafarers remain very vulnerable.

With some notable exceptions, only a small proportion of the world’s seafarers have been vaccinated.

Belgium has demonstrated best practice, and July 2021 started a vaccination campaign for all seafarers

arriving in a Belgian port, regardless of nationality.

To address seafarers’ issues there has been a continuous level of cooperation among international

organizations and industry bodies, including IMO, ILO, WHO, UNCTAD, ICS, and ITF, which have repeatedly

expressed concern about the humanitarian crisis in the maritime shipping sector and urged Member

States to designate seafarers and other marine personnel as key workers, accept seafarers’ identity

documents as evidence of their key worker status, and allow flexibility for ship owners and managers to

divert ships to ports where crew change is possible without imposing penalties.

On 1 December 2020, the UN General Assembly unanimously adopted a resolution: International

cooperation to address challenges faced by seafarers as a result of the COVID-19 pandemic to support

global supply chains

(A/RES/75/17). This urges Member States to designate seafarers and other

marine personnel as key workers and encourages governments and other stakeholders to implement

the “Industry Recommended Framework of Protocols for ensuring safe ship crew changes and travel

during the Coronavirus (COVID-19) pandemic”. It also calls upon governments to facilitate maritime crew

changes - for example, by enabling them to embark and disembark, expediting travel and repatriation

efforts, and ensuring access to medical care. The resolution also requests IMO, ILO and UNCTAD to

inform the General Assembly at its 76^th session on issues related to the resolution.

This follows earlier resolutions from other bodies. On 21 September 2020 the IMO’s Maritime Safety

Committee recommended action to facilitate ship crew change, access to medical care, and seafarer

travel during the COVID-19 pandemic. According to IMO, as of the end of June 2021, 60 Member

States and two Associate Members had signed on to designate seafarers as key workers. Similarly, on

8 December 2020 the Governing Body of the ILO, adopted the “Resolution concerning maritime labour

issues and the COVID-19 pandemic”.

In January 2021, the shipping industry issued the Neptune Declaration on Seafarer Wellbeing and Crew

Change, which by June 2021 had been signed by more than 600 companies and organizations. They

have also produced a Neptune Declaration Crew Change indicator which aggregates data from 10

leading ship managers which collectively have about 90,000 seafarers currently on board. This reported

that between June and July 2021 the situation appeared to be worsening, with more seafarers on

vessels beyond the expiry of their contract and more who had been on board for over 11 months - the

maximum length of time envisaged in the 2006 Maritime Labour Convention (MLC). Since the launch of

the indicator in May 2021, the proportion of seafarers on vessels beyond the expiry of their contract had

risen from 5.8 to 8.8 per cent while the proportion on board for over 11 months had increased from 0.4 to

1.0 per cent.

Advances in international law and technology

The COVID-19 pandemic has interfered with international trade, creating inefficiencies, delays and

supply-chain disruptions on an unprecedented scale - which also have legal consequences if contractual

performance is disrupted, delayed, or becomes impossible. For shipping this can lead to litigation that

raises complex international jurisdictional issues. Government and industry will need to work together

to address the related contractual rights and obligations, and arrive at standard contractual clauses for

commercial risk-allocation.

xxi

Many of the problems are associated with delays in documentation - which should encourage more

commercial parties to adopt secure electronic solutions. Updated industry guidelines adopted recently,

offer useful guidance to shipowners and operators on procedures and actions to maintain the security

of IT systems in their companies and onboard ships, adopting a cyber-risk management approach, and

taking account of the IMO requirements, and other relevant guidelines.

Technological innovation is also raising the prospect of automated crewless vessels. The industry is

conducting trials on “maritime autonomous surface ships” (MASS). The aim is to ensure safe, secure and

environmentally sustainable shipping with the relevant legal framework. In May 2021, the IMO Maritime

Safety Committee completed a regulatory scoping exercise for the use of MASS which highlighted some

priority issues. The outcome could be a MASS instrument/code, with goals, functional requirements and

corresponding regulations, suitable for different degrees of autonomy.

On the path to a 3°C temperature rise

The shipping industry has an important part to play in combatting climate change. The Paris Agreement

aimed to reduce global warming to well below 2°C and pursue 1.5°C. But, despite a brief dip in carbon

dioxide emissions caused by the COVID-19 pandemic, the world is still heading for a temperature rise in

excess of 3°C this century. Urgent action is needed on both mitigation and adaptation.

At the regulatory level, the shipping industry is addressing climate issues through the

1973/1978

International Convention for the Prevention of Pollution from Ships (MARPOL). In June 2021, the IMO

adopted amendments to Annex VI of the Convention, which introduced new mandatory regulations to

further reduce greenhouse gas emissions from shipping, and require owners to set energy efficiency targets.

There were also initial discussions on the mid- and long-term action needed, including market-based

measures, along with an industry-led proposal for an International Maritime Research and Development

Board a non-governmental body which would be financed by a levy on marine fuel and would support

research, development, and the deployment of zero-carbon technologies.

Climate change, with the prospect of accelerating sea-level rise and more extreme weather events,

will also have major implications for the world’s seaports. Securing global maritime transport and trade

will therefore mean investing in adaptation and building resilience- for seaports and other key transport

infrastructure, especially in developing countries.

Broad-based global recovery will depend on smart, resilient and

sustainable maritime transport

The COVID-19 pandemic triggered a succession of shocks and waves, each setting off their own spinoff

events. The extent and impact of disruption varied considerably, however, between regions, economic

sectors, and segments of the shipping market. The recovery is similarly proving uneven, with differences

in the levels and scale of policy support and unequal access to vaccines.

Although the initial impact on maritime transport was less dramatic than predicted, the outlook is shadier.

The timescale for a lasting recovery will depend on the progress of the pandemic, the extent and timing of

world vaccination plans, and the duration of policy support measures. At present the nascent recovery is

being threatened by supply-chain breaks and logistical bottlenecks that are disrupting shipping markets

and pushing cost levels to historic highs.

The COVID-19 disruption has also accelerated pre-existing megatrends - geopolitical, technological, and

environmental. These trends have been unfolding slowly over the past decade but have accelerated

during the pandemic and continue to transform maritime transport and trade:

Geopolitics - The COVID-19 health crisis underscored the extent to which nations are economically and socially

interdependent - integrated through global supply chains and their underlying extended maritime transport networks.

In the face of heightened geopolitical risks and rising trade tensions, many countries and enterprises are shifting their

mindsets and now perceive global interdependency partly as a vulnerability. To mitigate risks and build resilience -

they are therefore aiming to reduce their reliance on distant foreign suppliers.

Resilience - The COVID-19 disruption has tested supply chains and their underlying business models, and put

transport and logistics networks under strain. Enterprises and governments are aiming to make supply chains more

robust and resilient, including by looking to diversify their business partners and suppliers. This will involve a new

balance between local, regional and global production. They are also reconsidering inventory and stock management

strategies and the trade-offs between just-in-time and just-in-case supply chain models.

xxii

Technology - Customs officials, port workers, and transport operators increasingly recognize the value of new

technologies and digitalization, not just as a way of boosting efficiency but also for maintaining business continuity

at times of disruption. Technological innovations include advanced analytics, on-board sensors, communications

technology, port-call optimization, blockchains, big data, and autonomous ships and vehicles. During the pandemic,

these technologies have helped reduce physical contact, and keep ships moving, ports open and cross-border trade

flowing. Technological advances have also stimulated consumer spending online and a growth in e-commerce. These

trends will continue to redefine production and consumption patterns and the ways in which ships, ports and their

hinterland connections deliver cargo and services.

Shipping market dynamics - In anticipation of future disruptions, carriers, shippers, ports, and inland transport

operators will be rethinking their business and operating models to respond more flexibly to changing market

conditions. Having seen the way in which the trade rebound stumbled against logistical bottlenecks and constrained

capacity following the COVID-19 shock, they are likely to reconsider their levels of investment in shipping and ports as

well as their planning operations. They can also anticipate potential greater regulation of shipping markets as national

competition authorities step up their monitoring of freight rates and market behaviour and scrutinize rapid movements

in shipping prices.

Decarbonization and the energy transition - Maritime transport is facing growing pressure to decarbonize and

operate in a more sustainable way - issues that have also come to the fore as part of the post-pandemic recovery.

With ongoing IMO work on greenhouse gas emission reduction in shipping providing further momentum, shipping

is expected to change its fuel mix and use new technology and ship designs, alternative fuels and operational

adjustments to cut its carbon and environmental footprint. For energy, shipping is not just a large-scale user but also

a major carrier, so the industry will have to respond to lower demand for oil tankers and coal carriers and more for

ships transporting hydrogen, ammonia and other alternative fuels.

Climate adaptation and resilience - Maritime transport infrastructure and services came under severe stress

as a result of the pandemic and the closure of the Suez Canal. This was in addition to the ongoing dangers of

climate change: over recent years extreme weather events, including floods, hurricanes and cyclones, have been

causing frequent and intense disruptions for both coastal infrastructure and hinterland connections. With current

climate projections pointing to a global warming trajectory exceeding the agreed targets under the Paris Agreement,

the maritime industry and governments need to invest in adaptation and in climate-proofing maritime transport

infrastructure and services, as well as accelerate the development of related legal, policy and technical measures,

and capacity-building.

xxiii

Priorities for action

1.   Vaccinate the world - To complete broad-based global vaccination, developing countries should

have fair access to vaccines. Investing in global vaccination, with the support of dedicated funds, will

not just accelerate the end of the pandemic but also stimulate the recovery and add trillions to global

economic output.

2.   Revitalize the multilateral trade system - Decades of trade liberalization and multilateral action

have brought economic and social benefits that are now under threat from increasing trade restrictions

and protectionism. To retain these hard-won gains countries will need to defend and consolidate the

multilateral trade system and minimize trade restrictiveness.

3.   End the crew-change crisis - This requires urgent attention from flag, port and labour-supplying

states, in collaboration with relevant international organizations. All states should be parties to the relevant

international legal instruments, including the MLC 2006, ILO Conventions Nos. 108 and 185 on Seafarers’

Identity Documents, and the IMO FAL Convention. To advance the objectives of SDG 8, and to ensure

decent work for seafarers, states also need to redouble their efforts to ensure that these conventions and

labour standards are fully implemented.

4.   Vaccinate seafarers - Concerted collaborative efforts by industry, governments and international

organizations should ensure that seafarers are designated as key workers and are vaccinated as a matter

of priority.

5.   Facilitate crew changes - Governments and industry should continue to work together, including

through the Neptune Declaration initiative, and in collaboration with relevant international organizations,

to facilitate crew changes, in accordance with international standards and in line with public health

considerations. They should also ensure the availability and access to related seafarer data.

6.   Ensure reliable and efficient maritime transport - Stakeholders in the maritime supply chain,

including carriers, ports, inland transport providers and shippers, should work together to ensure that

maritime transport remains a reliable, predictable and efficient mode of transport. This will require investing

in shipping and ports and their hinterland connections while devising and implementing sustainable freight

transport solutions. It will also require proper implementation of trade facilitation measures and digital tools

and technologies.

7.   Mainstream supply chain resilience, risk assessment and preparedness - This can be achieved

through a portfolio of measures, including dual sourcing, redundancy across suppliers, and backing up

production sites, inventory, and stocks, along with better risk management, and end-to-end transparency.

Typically, this will involve assessing and managing risks, enhancing preparedness and adopting hybrid

solutions that are flexible and agile, and arrive at balanced trade-offs, for example, between nearshoring

and reshoring and combining hybrid supply chain models, along with measures to reduce vulnerabilities

to cyberattacks.

8.   Control costs - Freight costs can be contained by expanding capacity to match demand, making

ports more efficient, improving planning, forecasting and visibility, and implementing trade facilitation

measures. The maritime transport market should also be transparent, fair and competitive. National

competition authorities therefore need the capacity to monitor trends in freight rates, fees and charges.

Stakeholders along the maritime supply chain including carriers, ports, inland transport providers,

customs, and shippers should work together to share information and make maritime transport more

efficient.

9.   Decarbonize - The shipping industry, in cooperation with governments, will need to explore

alternative fuels, invest in landside infrastructure and replace older vessels with larger and more

fuel-efficient ships. This will require a predictable environment at the global level but in addition,

structurally weak developing countries will need help to mitigate transition costs and the lower

connectivity that could result from decarbonizing maritime transport. Developing countries will also

need to gain a better understanding of how new regulations will affect the maritime transport services.

Integrated post-pandemic recovery planning and stimulus packages should earmark resources for

environmental sustainability, aiming for green, low-carbon maritime transport.

10.   Climate-proof maritime transport - Countries should anticipate, prepare for and adapt to

climate change by fully understanding the risks, exposure, and vulnerabilities, and by building adaptive

capacity across the maritime supply chain. For developing countries, including the most vulnerable

groups of countries, building back better after the pandemic will mean scaling up investment and

building national capacities in climate-proofing.

xxiv

In 2020, international maritime trade and global supply

chains were hit by the impact of the COVID-19 pandemic.

Overall however, maritime transport managed to navigate

through the crisis, and for some parts of the supply chain

the impact was not as dramatic as initially feared. Carriers

were able to mitigate the early shock and manage lower

levels of demand. Port and landside operations, however,

struggled to adjust, and the world’s seafarers faced

a precarious situation as they became caught up in an

unprecedented global crew-change crisis.

In 2020, global economic output fell by 3.5 per cent and

merchandise trade by

5.4 per cent, while international

maritime shipments fell by 3.8 per cent, to 10.65 billion tons.

However, UNCTAD expects world maritime trade to recover by

4.3 per cent in 2021, and growth is projected to continue over

the 2022-2026 period, albeit at rates that will be moderated

by the easing in world economic output. Although the

short-term outlook is positive, the medium- and longer-term

prospects remain uncertain: the upturn will be directed by the

future path of the pandemic and the associated lockdowns

and restrictions. A lasting recovery also hinges on keeping

trade flowing, by creating supportive macroeconomic and

fiscal conditions while minimizing trade protectionism.

Throughout 2021, much of the global economic revival will

be driven by government spending in major economies, so

the patterns and geography of the recovery will be shaped

by the ways in which their governments wind up these

support measures - in terms of scale, focus, and timing.

Progress could, however, still be derailed by further outbreaks

of the pandemic, by slow vaccine deployment and in many

economies by the limited scope for policy support. It has

become clear that broad-based recovery will require an end

to the health crisis and an equitable distribution of vaccines

across all regions, developed and developing.

International maritime

Starting in late 2020, a swift rebound in containerized trade

stumbled against supply-side constraints - which increased

trade and port traffic

costs, dented reliability of service, and undermined the operation

of value chains. As global demand patterns normalize, these

problems are likely to dissipate, but the longer- term outlook

will continue to be shaped by wide-ranging and longer-term

structural factors, including patterns of globalization, changes

in consumption habits, digitalization and the growth of

ecommerce, as well as by the global energy transition and the

imperative of environmental sustainability.

The impact of COVID-19 has also highlighted the need for

better risk management, and greater preparedness, and

resilience. The disruption was amplified by other events

that created transport bottlenecks - in some countries by

flooding, for example, and especially by the blocking of the

Suez Canal, which exposed risks and vulnerabilities in supply

chains. Building future resilience will entail reforming business

models and global supply chains, and reorganizing maritime

transport networks.

This chapter considers developments in maritime transport

and trade during 2020 until mid-2021. Section A reviews the

situation of international maritime trade and container port

traffic. Section B sets out the outlook for global recovery and

its sustainability. Section C puts forward some key policy

considerations and action areas.

Maritime trade

and port cargo

traf c

INTERNATIONAL SEABORNE TRADE

WORLD CONTAINER PORT TRAFFIC

IN 2020

Growth slipped by

Total volumes reached

Down by

Volumes estimated at

-3.8%

10.7 billion tons

-1.2%

815.6 million TEUs

following on a weak

pre-pandemic growth

of 0.5% in 2019

2020 and 2021 exposed

Developing countries continue to account for the lion's

ports' vulnerability to

share of world maritime trade by volume

disruptions and risks

70%

60%

World container port traf c by region, 2019-2020

(percentage annual change)

World maritime trade, percentage share per region

Africa

Latin America

Asia

Africa

and the Caribbean

Oceania

Asia

-0.4

0.0

-1.8

Europe

North America

Oceania

Americas

-4.2

-1.9

-0.8

OUTLOOK

Short-term outlook for maritime trade is positive,

UNCTAD expects world

however, risks are manifold and uncertainty remains

maritime trade to recover

+4.3% in 2021

Growth in maritime trade

Covid-19

Uncertainty

Congestion

volumes expected to

pandemic

in ports

moderate and expand at an

annual rate of

+2.4%

Supply chain

Transport

disruption

Change in

costs

between 2022 and 2026

globalization patterns

1. International maritime trade and port traffic

A. VOLUMES OF INTERNATIONAL MARITIME TRADE AND PORT TRAFFIC

The demand for maritime transport services and infrastructure can be assessed through key

indicators on trade and port cargo handling. Over the review period, these followed a rollercoaster

ride: in early

2020 demand tanked as a result of the pandemic but then bounced back in the

second half.

1. International maritime trade fell in 2020 as the pandemic sequentially

disrupted supply, demand, and logistics

In 2020, the pandemic disrupted the world economy, cutting manufacturing activity and consumption

- with impacts on supply, demand and logistics. International maritime trade growth had already been

weak in 2019 at 0.5 per cent, but in 2020 it

declined by 3.8 per cent. Total volume dropped

Table 1.1

International maritime trade,

by 422 million to 10.65 billion tons (table 1.1 and

1970-2020

table 1.2).

(millions of tons loaded)

Tanker

Main

Other dry

Total (all

Nevertheless, the impact was not as dramatic

Year

trader^a

bulk^b

cargo^c

cargoes)

as initially feared and the maritime transport

1970

1 440

448

717

2 605

sector managed to navigate through the crisis

1980

1 871

608

1 225

3 704

(figure 1.1). In 2020, maritime trade increased as

a proportion of global GDP, with an increase in

1990

1 755

988

1 265

4 008

the maritime trade-to-GDP ratio as the pandemic

2000

2 163

1 186

2 635

5 984

induced a shift in consumer demand from

2005

2 422

1 579

3 108

7 109

services to traded goods. However, this is likely

2006

2 698

1 676

3 328

7 702

to be short lived as demand patterns normalize

2007

2 747

1 811

3 478

8 036

and spending continues to rebalance back

towards services. In 2021, the narrative is still

2008

2 742

1 911

3 578

8 231

being driven by the pandemic and related risks,

2009

2 641

1 998

3 218

7 857

but attention is now moving toward the vaccine

2010

2 752

2 232

3 423

8 408

rollout, the recovery in growth, and the supply and

2011

2 785

2 364

3 626

8 775

demand pressures that are currently disrupting

2012

2 840

2 564

3 791

9 195

trade logistics. At the same time, the industry

2013

2 828

2 734

3 951

9 513

must consider the longer-term sustainability and

resilience of shipping, ports and their hinterland

2014

2 825

2 964

4 054

9 842

connections.

2015

2 932

2 930

4 161

10 023

2016

3 058

3 009

4 228

10 295

Around two-thirds of global trade in goods

takes place in developing countries (figure 1.2).

2017

3 146

3 151

4 419

10 716

As indicated in table 1.2, in 2020, developing

2018

3 201

3 215

4 603

11 019

countries, including the transition economies

2019

3 163

3 218

4 690

11 071

of Asia, accounted for 60 per cent of global

2020

2 918

3 181

4 549

10 648

goods loaded (exports) and

70 per cent of

goods discharged

(imports). Much of this

Sources: Compiled by the UNCTAD secretariat based on

growth has been in East Asia, especially China,

data supplied by reporting countries and as published on

the relevant government and port industry websites, and by

and there has also been a surge in volumes

specialist sources. Dry cargo data for 2006 onwards has been

on the Transpacific containerized trade route

revised and updated to reflect improved reporting, including

linking East Asia to North America. A smaller

more recent figures and a better breakdown by cargo type.

Since 2006, the breakdown of dry cargo into “Main bulk” and

proportion of trade was in developed countries,

“Other dry cargo” is based on various issues of the Shipping

which generated 40 per cent of global maritime

Review and Outlook and Seaborne Trade Monitor, produced

exports

(goods loaded) and

31 per cent of

by Clarksons Research. Total maritime trade figures for 2020

imports (goods discharged).

are estimated based on preliminary data or on the last year

for which data were available.

Asia’s predominance was further strengthened

a Tanker trade includes crude oil, refined petroleum products,

2020 as it maintained its

41 per cent

gas, and chemicals.

contribution to total goods loaded and increased

^b Main bulk includes iron ore, grain, coal, bauxite/alumina,

and phosphate. Starting in 2006, “Main bulk” includes iron

its contribution to total goods discharged

ore, grain, and coal only. Data relating to bauxite/alumina and

(table

1.2 and figure 1.3). Developing America

phosphate are included under “Other dry cargo”.

and Africa maintained their existing, smaller

^c Includes minor bulk commodities, containerized trade, and

shares.

residual general cargo.

Table 1.2

International maritime trade 2019-2020, by type of cargo, country group and region

Goods loaded

Goods discharged

Other

tanker

Year

Total

Crude oil

trade^a

Dry cargo

Total

Crude oil

trade^a

Dry cargo

Millions of tons

2019

11 070.5

1 860.3

1 302.6

7 907.6

11 055.1

2 022.8

1 320.5

7 711.8

World

2020

10 648.3

1 716.0

1 202.3

7 730.0

10 631.1

1 863.6

1 222.0

7 545.5

2019

4 503.2

453.6

477.1

3 572.6

3 778.3

902.0

463.3

2 412.9

Developed

economies

2020

4 317.4

425.9

430.3

3 461.2

3 245.2

732.5

370.2

2 142.5

2019

6 567.3

1 406.7

825.5

4 335.1

7 276.8

1 120.7

857.2

5 298.9

Developing

economies

2020

6 330.9

1 290.1

772.0

4 268.8

7 385.9

1 131.2

851.7

5 403.0

2019

814.1

302.8

91.6

419.6

533.7

35.3

113.4

385.0

Africa

2020

735.5

236.1

83.4

415.9

510.1

30.6

107.9

371.5

Latin America

2019

1 406.6

221.9

81.3

1 103.3

621.4

45.0

143.7

432.6

and the

2020

1 369.2

200.5

75.6

1 093.1

590.1

39.6

130.0

420.5

Caribbean

2019

4 331.4

880.1

644.6

2 806.6

6 108.0

1 039.6

595.6

4 472.7

Asia

2020

4 212.2

851.8

605.8

2 754.5

6 272.4

1 060.2

609.6

4 602.6

2019

14.5

1.7

7.8

5.0

14.9

0.8

5.4

8.6

Oceania

2020

14.6

1.8

7.8

5.1

15.4

0.7

5.5

9.1

Goods loaded

Goods discharged

Other

tanker

Year

Total

Crude oil

trade^a

Dry cargo

Total

Crude oil

trade^a

Dry cargo

Percentage share

2019

100.0

16.8

11.8

71.4

100.0

18.3

11.9

69.8

World

2020

100.0

16.1

11.3

72.6

100.0

17.5

11.5

71.0

2019

40.7

24.4

36.6

45.2

34.2

44.6

35.1

31.3

Developed

economies

2020

40.5

24.8

35.8

44.8

30.5

39.3

30.3

28.4

2019

59.3

75.6

63.4

54.8

65.8

55.4

64.9

68.7

Developing

economies

2020

59.5

75.2

64.2

55.2

69.5

60.7

69.7

71.6

2019

12.4

21.5

11.1

9.7

7.3

3.2

13.2

7.3

Africa

2020

11.6

18.3

10.8

9.7

6.9

2.7

12.7

6.9

Latin America

2019

21.4

15.8

9.8

25.5

8.5

4.0

16.8

8.2

and the

Caribbean

2020

21.6

15.5

9.8

25.6

8.0

3.5

15.3

7.8

2019

66.0

62.6

78.1

64.7

83.9

92.8

69.5

84.4

Asia

2020

66.5

66.0

78.5

64.5

84.9

93.7

71.6

85.2

2019

0.2

0.1

1.0

0.1

0.2

0.1

0.5

0.2

Oceania

2020

0.2

0.1

0.9

0.1

0.2

0.1

0.5

0.2

Source: Compiled by the UNCTAD secretariat based on data supplied by reporting countries and as published on the relevant

government and port industry websites, and by specialist sources. Dry cargo data for 2006 onwards has been revised and

updated to reflect improved reporting, including more recent figures and a better breakdown by cargo type. Total maritime

trade figures for 2020 are estimated based on preliminary data or on the last year for which data were available.

Note: Since March 2021, the category “transition economies” is no longer used by UNCTAD. Economies formerly classified

as “transition economies” and located in Europe, are reassigned to the “developed regions” grouping, and the economies

formerly classified as “transition economies” and found in Asia, are reassigned to the “developing regions” grouping. For more

extended time series and data before 2020 see UNCTADstat Data Center at https://unctadstat.unctad.org/wds/TableViewer/

tableView.aspx?ReportId=32363. Annual world totals of goods loaded and discharged are not necessarily the same, given

among other factors, bilateral asymmetries in international merchandise trade statistics and the fact that volumes loaded in

one calendar year may reach their port of destination in the next calendar year.

a Include crude oil, refined petroleum products, gas, and chemicals.

1. International maritime trade and port traffic

Figure 1.1

International maritime trade, world gross domestic product (GDP)

and maritime trade-to-GDP ratio, 2006 to 2021

(percentage annual change and ratio)

Average ratio 2006-2014

Average ratio 2015-2021

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

-1

-2

-3

-4

-5

GDP

Maritime trade

Maritime trade-to-GDP ratio

Average ratio

Source: UNCTAD calculations, based on the Review of Maritime Transport, various issues, data from UNCTADstat and

table 1.1 of the UNCTAD Trade and Development Report 2021. From Recovery to Resilience: The Development Dimension.

Figure 1.2

Participation of developing countries in international maritime trade, selected years

(percentage share in total tonnage)

1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2020

Loaded

Discharged

Source: UNCTAD secretariat based on the Review of Maritime Transport, various issues, and table 1.2 of this report.

Figure 1.3

International maritime trade, by region, 2020

(percentage share in total tonnage)

Asia

Americas

Europe

Oceania

Africa

Loaded

Discharged

Source: Compiled by the UNCTAD secretariat based on data supplied by reporting countries and as published on the relevant

government and port industry websites and by specialist sources.

2. Disruption of global economy and trade followed by signs

of a multi-paced recovery

In 2020, global GDP declined by 3.5 per cent (table 1.3) - the largest downturn for 70 years. The greatest impact

was in the services sector - in particular in tourism, travel and hospitality. For maritime trade, however, the plunge

in flows was mitigated by the boost in demand from government stimulus packages. Estimated in March 2021

at around $16 trillion, and concentrated mainly in the United States, Europe and Japan, these packages helped

soften the landing. Demand has further revived with the lifting of some COVID-19-related restrictions.

By the third quarter of 2020, there were signs of recovery, driven by positive trends in East Asia and the

United States and the rollout of COVID-19 vaccines in many developed economies. While the manufacturing

sector was down, consumer demand rose, notably in the United States with end-year retail sales 3.4 per

cent higher than 2019 (Sand, 2021a). Unlike the downturn in the first half of 2020, however, which was

globally synchronized, the nascent recovery is proceeding along diverging tracks, as many other economies,

especially in developing regions continue to fall behind.

In 2020 the drop in GDP in developing economies, at 1.8 per cent (table 1.3), was less than the global

average of 2.9 per cent for the 2009-2021 period. This was largely due to the performance of China which

was the only country to have seen some economic growth in 2020 (2.3 per cent). China's efforts to contain

the pandemic, along with a stimulus package, provided support to industry and exports.

In 2020, output in developed economies contracted by 4.7 per cent. The drop was lower in the United States

at 3.5 per cent, as fiscal measures helped minimize the economic downturn, and steeper in the EU at 6.2 per

cent, reflecting renewed pandemic outbreaks. In the United Kingdom, the drop was steeper still at 9.9 per cent,

as a result not just of the pandemic restrictions

Table 1.3

World economic growth,

but also of Brexit which disrupted supply chains

2019-2021

as traders adjusted to new rules and procedures.

(annual percentage change)

Elsewhere, Japan's economy fell by 4.7 per cent

while India's dipped by 7.0 per cent. There was also

Region or country

2019

2020

2021^a

a severe impact on GDP in Latin America and the

World

2.5

-3.5

5.3

Caribbean, down by 7.1 per cent, in Africa by 3.4

Developed countries

1.7

-4.7

4.7

per cent, in Western Asia by 2.9 per cent, and the

of which:

Russian Federation by 3.0 per cent.

United States

2.2

-3.5

5.7

For 2021, current projections for global GDP are

European Union (27)

1.6

-6.2

4.0

pointing to growth of 5.3 per cent. Progress is again

United Kingdom

1.4

-9.9

6.7

expected to be uneven, with Asia and the United

Japan

0.3

-4.7

2.4

States forging ahead. The speed and geography

Australia

1.8

-2.5

3.2

of the recovery will depend to large extent on the

Russian Federation

1.3

-3.0

3.8

vaccine rollout and on the structure, scale, and

duration of government support, as for example, in:

Developing countries

3.7

-1.8

6.2

of which:

• India - The announced support measures

Africa

2.9

-3.4

3.2

focus on road infrastructure and are

expected to boost dry bulk shipping by

East Asia

4.3

0.3

6.7

increasing demand for raw materials.

of which:

China

6.1

2.3

8.3

• Japan - The $3-trillion stimulus package,

including the funds announced at the end

South Asia

3.1

-5.6

5.8

of 2020 and focusing on green and digital

of which:

innovation, could boost container volume in

India

4.6

-7.0

7.2

intra-Asian trade.

South-East Asia

4.4

-3.9

3.5

• United States - Additional fiscal stimulus

Western Asia

1.3

-2.9

3.5

measures, including large infrastructure

Latin American and the Caribbean

-0.1

-7.1

5.5

plans will lift demand for some commodities.

of which:

• European Union - Spending from the Next

Brazil

1.4

-4.1

4.9

Generation recovery fund is due to begin

Source: UNCTAD secretariat, based table 1.1 of UNCTAD

in 2021.

Trade and Development Report 2021. From Recovery to

Resilience: The Development Dimension.

• Least developed countries

- Stimulus

Note: Calculations for country aggregates are based on

packages average only 2.1 per cent of their

world GDP at constant 2015 dollars.

GDP, i.e., one-ninth of the global average

^a Forecast.

(UNDESA, 2021).

1. International maritime trade and port traffic

Table 1.4

Growth in the volume of world merchandise trade, 2019-2021

(annual percentage change)

Volume of exports

Volume of imports

(percentage change)

2019

2020

2021^a

2019

2020

2021^a

World

-0.3

-5.3

14.3

-0.3

-5.5

13.3

Developed countries

-0.2

-6.7

12.5

-0.2

-5.6

12.2

of which:

Euro area

-0.1

-8.7

13.4

0.0

-8.2

11.3

United States

-0.5

-11.0

11.0

-0.4

-4.0

16.0

United Kingdom

-3.1

-14.4

-2.5

3.9

-13.5

7.7

Japan

-1.6

-7.8

17.3

0.8

-6.2

3.7

Other developed countries

2.0

-5.1

12.3

0.0

-4.5

15.3

Developing countries

-0.4

-2.3

17.5

-0.6

-5.2

15.9

of which:

China

0.4

1.3

34.3

0.0

1.7

17.1

Latin America

0.6

-4.2

9.9

-1.5

-11.2

21.0

Africa and the Middle East

-4.0

-6.8

-2.7

-0.3

-2.8

3.1

Asia (not including China)

-1.3

-3.6

19.6

-2.4

-11.6

20.2

Eastern Europe and Commonwealth of Independent States

2.0

-2.2

0.6

5.0

-5.4

8.8

Source: UNCTAD Secretariat calculations, based on CPB World Trade Monitor, July 2021. Data source and methodology are

aligned with UNCTAD, Trade and Development Report 2021.

Note: Country coverage and classification in the aggregated country groupings is not comprehensive and relies on

Ebregt (2020).

^a For 2021, figures reflect percentage change between the average for the period January to May 2021 and January to

May 2020.

In 2020 taken together, world merchandise imports and exports fell by 5.4 per cent (table 1.4), This

decline was far lower than more pessimistic forecasts at the height of the pandemic (UNCTAD, 2020a).

In April 2020, the World Trade Organization (WTO) had expected world merchandise trade to drop by

between 13 and 32 per cent in 2020 (WTO, 2020). There was indeed a slump in the second quarter

of 2020 but trade volumes bounced back in the third quarter, responding to the easing of restrictions

and lockdowns and announcements of new vaccines. Along with vaccine rollout in major developed

regions, the rapid return in volumes reflected the resilience of East Asian trade and the boost in consumer

demand from fiscal spending in the United States. Trade in services however remained subdued across

all economies. Tourism and cruise shipping were hit hard, though there was a growth in cross-border

services that were increasingly enabled by digital technologies.

Exports and imports fell in almost all regions - though to different extents. As shown in table 1.4, between 2019

and 2020 developed country regions saw a drop in exports of 6.7 per cent and in imports of 5.6 per cent.

The United Kingdom recorded a double-digit drop in exports, as did the United States though here the

implementation of the Phase One trade agreement boosted some exports to China (Sand, 2020a). Trade

also declined in the euro area and Japan albeit at relatively lower rates while trade involving other developed

regions fared relatively better with exports falling by only 5.1 per cent and imports by 4.5 per cent.

Developing regions also recorded a drop in merchandise trade volumes although at more moderate rates:

exports fell by 2.3 per cent while imports dropped by 5.2 per cent. The one exception was China where,

despite the disruption, exports rose by 1.3 per cent and imports by 1.7 per cent. For Asia, excluding

China, however, exports declined by 3.6 per cent while imports dropped by 11.6 per cent. In Latin America

imports dropped by 11.2 per cent and exports by 4.2 per cent. In Africa and the Middle East exports

fell by 6.8 per cent and imports by 2.8 per cent. In Eastern Europe and Commonwealth of Independent

States, the decline in imports was less at 2.2 per cent, though imports fell by 5.4 per cent.

2021 saw a revival in world merchandise trade. During the first five months of the year exports

were 14.3 per cent higher than in the corresponding period in the previous year, while imports rose

by 13.3 per cent (table 1.4). But the recovery was uneven with exports from Africa and the Middle

East as well as from the United Kingdom continuing their decline. In the United States imports jumped

by 16.0 per cent, reflecting inventory building and the lasting benefits of fiscal support measures. During

the same period, imports increased into the euro area by 11.3 per cent, the United Kingdom by 7.7 per

cent and Japan by 3.7 per cent. Imports into developing countries increased by 15.9 per cent and into

Eastern Europe and Commonwealth of Independent States by 8.8 per cent.

Much of global import demand in the first half of 2021 was met from Asia, in particular from China whose

exports expanded by 34.3 per cent. There was also stronger import growth in Latin America, of 21.0 per

cent. Recovery in Africa and the Middle East was more moderate for both exports and imports. For the

full year 2021, the WTO expects world merchandise trade volume to grow by 8.0 per cent though the

recovery will be uneven (WTO, 2021).

This bounce-back in merchandise trade in almost all major economies has been faster than in previous

recessions - in 2009 and 2015 - though it has been from a low base and has been more robust in

goods than services (UNCTAD, 2021). The rebound was evident across a wide range of sectors including

pharmaceuticals, communications and office equipment, as well as minerals and agri-food. Much of this

has been due to the release of pent-up demand for durable goods such as cars, as well as strong demand

for products that support working from home. In contrast, recovery in the energy sector remains hesitant.

3. Maritime trade fell in 2020 but fared better than initially feared

The sudden dip and subsequent recovery in merchandise trade was reflected in the patterns of maritime

trade. In 2020, the outcome was better than initially feared. Volumes dipped by around 12 per cent in

May 2020 compared with May 2019, but only by around 2.0 per cent in the fourth quarter compared with

the same quarter in 2019 (Clarksons Research, 2021b). For 2020, following a contraction of 3.8 cent,

UNCTAD estimates shipping volumes to have lost 422 million tons.

The performance varied by market segment, with some sectors performing better than others (table 1.1,

table 1.2, figure 1.4). Worst hit was tanker shipping, but there was less impact on containerized trade, gas

shipments, and on dry bulk commodities such as iron ore and grains.

The second half of 2020 saw a nascent recovery - though asymmetric across market segments. There was

a return in volumes for containerized and dry bulk commodities, but tanker shipping awaited a full recovery

in global demand. At the same time, the sudden boost in demand stumbled into shortages - of shipping

capacity, and of containers, and equipment. As result, freight rates surged, with proliferating surcharges.

This may have bolstered shipping profitability but it put supply chains under strain, while adding to port

congestion and increasing delays and dwell times, and leading to a general decline in service reliability.

Figure 1.4

International maritime trade by cargo type, selected years

(millions of tons loaded)

Tanker trade^a

Main bulk

Container

Other dry cargo

Source: UNCTAD Review of Maritime Transport, various issues. For 2006-2020, the breakdown by cargo type is based on

Clarksons Research, Shipping Review and Outlook, Spring 2021 and Seaborne Trade Monitor, various issues.

Note: Given methodological differences, containerized trade data in tons sourced from Clarksons Research are not

comparable with data in TEUs featured in tables 1.8 and 1.9 and figures 1.8 and 1.9 of this report and which are sourced

from MDS Transmodal.

^a Tanker trade includes crude oil, refined petroleum products, gas, and chemicals.

1. International maritime trade and port traffic

Figure 1.5

International maritime trade in cargo ton-miles, 2001-2021

(billions of ton-miles)

70 000

60 000

50 000

40 000

30 000

20 000

10 000

Main bulk^a

Other dry cargo

Container

Oil

Gas

Chemicals

Source: UNCTAD secretariat based on data from Clarksons Research. Shipping Review and Outlook, Spring 2021.

^a Includes iron ore, grain, coal, bauxite/alumina, and phosphate.

^b Estimated.

^c Forecast.

The pandemic has proved to be an asynchronous, multi-wave event, as COVID-19 outbreaks lead to

sequences of lockdowns and various restrictions. In 2020 these disruptions were exacerbated by other

events such as the closure in China of the port of Yantian, which is a critical international container

terminal, and the week-long blockage of the Suez Canal, with further problems in 2021 as a result of

extreme weather events. For some of the major industries in Europe, these bottlenecks are causing

shortages of inputs and delays in delivery, and generally holding up the recovery. Automotive plants, for

example, had to close temporarily due to missing critical components and parts (Ewing and Clark, 2021).

This confluence of factors exposed the vulnerabilities of supply chains and of their underlying maritime

transport systems. They have also amplified the call for nearshoring and reduced the attractiveness of

long-haul trade and extended supply chains.

When adjusted for distance travelled, however, the decline in maritime trade in 2020 was lower - falling

by only 1.7 per cent, to an estimated 58,865 billion cargo ton-miles (figure 1.5). But there were different

outcomes for different types of cargo: oil decreased by 7.0 per cent and containerized trade by 1.5 per

cent, while there was an increase of 1.3 per cent in dry bulk trades (iron ore, coal, and grain) and of 6.7 per

cent in gas shipments, including liquified petroleum gas (LPG) and liquified natural gas (LNG) (Clarksons

Research, 2021a).

International maritime trade flows were sustained in 2020 by the rapid economic rebound in China with a

9 per cent increase in maritime import demand, in particular imports of iron ore and grain. Maritime trade

flows were also supported by China’s exports of containerized goods to the United States. Meanwhile,

lower demand for oil, and cuts by major OPEC+ oil producers and oil production, have continued to keep

a lid on the recovery in tanker shipping.

Most ton-miles and tons generated by bulkers of over 100,000 dwt were contributed by shipments from

Australia, followed by Brazil. In 2020, Australia generated 58 per cent of world iron ore exports and Brazil

23 per cent (figure 1.6). Much of this is destined for China. In 2020, China accounted for 76 per cent of

world iron ore imports and 20 per cent of coal imports. Tonnage on the Australia-China route, however,

declined in 2020, probably as result of the pandemic and the tensions between the two countries. China

is seeking to diversify its sources of supply and is looking more to Africa. Trade in ton-miles generated

by bulkers on the Africa-China route increased in 2020, probably reflecting increased iron ore shipments

from South Africa. Guinea could also be a supplier since it is reported to hold large reserves of untapped

high-quality iron ore. Guinea is expected to start shipping iron ore beginning in 2026, which will boost

demand for dry bulk shipping (Hellenic Shipping News, 2020). The country is already the world’s top

supplier of bauxite, much of which is shipped to China.

Figure 1.6

World capesize dry bulk trade by exporting region in tons

and ton-miles, 2019-2020 (percentage share)

Other

Africa

Europe

North America

Latin America

and the Carribean

(excluding Brazil)

Asia

Brazil

Australia

Ton 2020

Ton 2019

Ton-mile 2020

Ton-mile 2019

Source: UNCTAD based on VesselsValue data 2021.

Note: Based on dry bulk vessels of more than 100,000 dwt.

Crude oil exports continue to be dominated by Western Asia (figure 1.7). Much of the world's import

demand is from Asia, mainly China and India, followed by Japan and the Republic of Korea. Ton-mile

increase generated by North American exports in 2020 reflects the strong import demand in China and

growth in exports from the United States captured under Phase One of the trade deal with China. At the

underlying level, the shale boom is also a key driver of North American oil exports, with the United States

becoming a net seaborne energy exporter.

Figure 1.7

World ultra-large tanker trade by exporting region in ton

and ton-miles , 2018-2020 (percentage share)

Africa

Asia

Europe

Latin America

North America

Unknown

and the Caribbean

Ton-mile 2018

Ton-mile 2019

Ton-mile 2020

Ton 2018

Ton 2019

Ton 2020

Source: UNCTAD based on VesselsValue data, 2021.

Note: Tanker vessels of more than 320,000 dwt.

1. International maritime trade and port traffic

4. Diverging impacts and recoveries for key shipping markets

Oil trade still under pressure and gas trade down

The shipping market hardest hit by the pandemic has been the oil trade. Between 2019 and 2020 UNCTAD

estimates that tanker trade, including crude oil, refined petroleum products, and gas, slipped by 7.7 per

cent, with volumes down from 3.2 billion to 2.9 billion tons (table 1.5).

The steepest drop was for seaborne crude oil at 7.8 per cent, as total volumes fell to 1.7 billion tons.

Crude oil imports declined in most key importing markets including the United States, Europe, India,

Japan, and the Republic of Korea. The only increase was in China, by 8 per cent.

The demand for crude oil in 2020 reflects a reduction in demand for fuel - Jet A for aircraft, gasoline for

automobiles, and diesel for trucks - with volumes declining by over 10 per cent (Clarksons Research, 2021b).

While road travel is expected to increase, long-distance aviation prospects remain uncertain, awaiting a

worldwide rollout of vaccines.

Fuel imports to West Coast Latin America from the United States have fallen, partly because of limited

refinery capacity in the United States, opening up an opportunity for suppliers from Asia. Increased diesel

and gasoline shipments from Asia to West Coast Latin America will benefit ton-mile growth (Connelly, 2021).

The tanker trade has suffered from weak oil demand, high inventories, and cuts in oil supply by OPEC+

members. That said, 2021 should see an improvement as demand gradually recovers and supply increases.

Starting in August 2021, as oil prices hit their highest levels in more than two years, OPEC+ members agreed

to phase out 5.8 million barrels per day of production cuts (OPEC, 2021). Meanwhile, a lifting of the United

States sanctions would increase exports from the Islamic Republic of Iran, which could displace production

from other locations but nevertheless increase the demand for tankers. With an increase in OPEC production

and the expansion of Asian refineries, there is likely to be more demand for very large crude carriers.

India’s recent decision to diversify crude oil imports and reduce its dependency on Western Asia is

also good news for operators of crude-oil tankers and will boost demand in terms of ton-miles (Drewry

Maritime Research, 2021a). Ongoing repositioning of refinery capacity closer to demand is likely to alter

trade patterns, which could boost crude ton-miles but is more likely to reduce product tanker ton-miles.

In the longer term, tanker demand will be affected by the current global energy transition, which implies a

change in the energy mix. Elsewhere, as more refineries in some advanced economies close, changes to

oil trade patterns are likely to intensify (Danish Shipping Finance, 2021). A reduction in the United States

exports due to the low oil price environment may reduce long-haul trades. Suezmaxes may regain some

business due to the potential expansion of Western Asian crude oil production destined for India and South

East Asia (Danish Shipping Finance, 2020). Oil product trade flows could become more regionalised,

lowering seaborne volumes and travel distances (Danish Shipping Finance, 2020). Ongoing repositioning

of refinery capacity closer to demand is likely to alter trade patterns, which could boost crude ton-miles

but would more likely reduce product tanker ton-miles. The pandemic has also weighed, if to a lesser

extent, on the global demand for gas. In 2020, global gas trade increased only marginally, by 0.4 per

cent, while volumes of LNG exports are estimated to have expanded by 1.1 per cent and of LPG to have

declined by 1.0 per cent. Gas projects have been

delayed by weak energy prices, including work

Table 1.5

Tanker^a trade, 2019-2020

on LNG export terminals in the United States and

(million tons and percentage

LNG feedstock projects in Australia (Clarksons

annual change)

Research,

2020). That said, exports from the

Percentage

United States rebounded in 2020, thanks to a

change

2019

2020

2019-2020

boost in consumer demand supported by a cold

winter in Asia. The United States also increased

Crude oil

1 860

1 716

-7.8%

its LPG trade, by 15 per cent.

Other tanker trade

1 303

1 202

-7.7%

of which:

Natural gas offers a lower-carbon source of

energy, so with more demands for sustainability

Gas

478

480

0.4%

and a transition to lower-carbon energy, the

Total tanker trade

3 163

2 918

-7.7%

global gas trade is set to increase. Much of the

Sources: UNCTAD secretariat, derived from UNCTAD data in

growth will be driven by Asia, with an important

table 1.2 of this report.

role for China’s new propane dehydrogenation

Note: Gas trade figures are derived from Clarksons Research,

plants. India’s trade will also expand as a result of

Seaborne Trade Monitor, Volume 8, No.6, June 2021.

subsidized domestic LPG prices.

^a Includes: refined petroleum products, gas, and chemicals.

Natural gas is set to contribute a larger share to the global energy mix in the coming years, with much of

the growth driven by shale-gas production in the United States, as well as by production in Western Asia

and in other regions including the Mediterranean and East Africa (Clarksons Research, 2020).

Dry bulk commodity trade defied pressure in 2020 with China keeping

the trade flowing¹

Total dry bulk trade fell by an estimated 1.5 per cent in 2020, as volumes slipped to 5.2 billion tons

(table 1.6). China's rapid economic recovery has boosted its import demand so it could take up extra

cargo generated by suppressed demand in other regions. Iron ore trade remained unperturbed as

shipments increased by 3.2 per cent to 1.5 billion tons. Grain trade also held firm, increasing volumes by

7.1 per cent. Supporting factors included a record Brazilian harvest, the returning United States-China

trade, and better prospects in pig farming in China following the recovery from the 2018 African swine

fever outbreak. In 2021, seaborne dry bulk trade is projected to expand by 3.7 per cent, with iron ore and

grain trade growing steadily, a rebound in minor bulk volumes and more coal trade.

Coal trade plunged 9.3 per cent in 2020, partly as a result of the pandemic, with reduced electricity

demand across regions overlaid on the ongoing structural shift towards cleaner energy sources. Minor

bulk trade also came under pressure, though only falling by 2.2. per cent. There was also less trade in

forest products, as well as lower nickel ore exports due to Indonesia's export ban. The bauxite trade was

much stronger, expanding by 8.2 per cent, with China accounting for 77 per cent, and Guinea providing

46 per cent of the supply (Clarksons Research, 2021b).

The current major players in the dry bulk trade are featured in table 1.7. These patterns are likely to

change as a result of tensions between China and Australia which are affecting coal and iron ore trade.

To compensate for the ban on Australian cargo China has cut import duties on coal by land from

Mongolia. This would reduce trade by ship, though the impact could be mitigated by increases on the

Indonesia-China route (Drewry Maritime Research, 2021b). Meanwhile, a shift in Australia's exports away

from China to more distant locations such as Saudi Arabia will increase shipping demand and ton-miles

(Drewry Maritime Research, 2021c).

Recovering from the pandemic on the ‘build back better’ principle will require greener and smarter solutions

and a shift towards cleaner and lower-carbon energy sources. In the longer term this will undermine

demand for dry bulk carriers (Danish Shipping Finance, 2020). Equally, as the Chinese economy becomes

less steel intensive, its demand for iron ore will

flatten. The loss of seaborne trade could, however,

Table 1.6

Dry bulk trade 2019-2020

be partially offset by a growth in trade in the non-

(million tons and

ferrous metals that are essential for producing

percentage change)

renewable technologies

- such as nickel ore,

Percentage

copper, lithium, cobalt, and bauxite - though these

change

commodities are mostly traded in smaller volumes

2019

2020

2019-2020

(Danish Shipping Finance, 2021).

Main bulka

3 218.0

3 181.0

-1.1%

Trade tensions between China and the United

of which:

States have affected trade in grain. In 2017, the

Iron ore

1 456.0

1 503.0

3.2%

United States accounted for 34 per cent of China's

Coal

1 284.0

1 165.0

-9.3%

seaborne grain imports. In 2019, this share fell

to 18 per cent, before recovering to 27 per cent

Grain

478.0

512.0

7.1%

2020, on the back of the Phase One trade

Minor bulk

2 030.0

1 986.0

-2.2%

deal commitments. China’s efforts to diversify its

of which:

suppliers have benefited Brazil whose share of the

Chinese market increased from 44 per cent in 2017

Steel products

373.0

354.0

-5.1%

to about 60 per cent in 2018 and 2019, before

Forest products

383.0

365.0

-4.7%

falling back to 48 per cent in 2020 (Zhang, 2021).

Total dry bulk

5 248.0

5 167.0

-1.5%

Other countries have also gained market share,

including Ukraine, France, the Russian Federation,

Source: UNCTAD secretariat calculations, based on

and Argentina. But China’s grain import demand

Clarksons Research,

2019d, Dry Bulk Trade Outlook,

Volume 26, No. 6, June.

also faces ‘downside risks, including a renewed

^a Includes iron ore, coal

(steam and coking) and grains

outbreak of African swine fever and softer crush

(wheat, coarse grain and soybean).

margins that may dampen soybean imports.

Detailed figures on dry bulk commodities are derived from Clarksons Research (2021), Seaborne Trade Monitor. Volume 8.

No. 6. June.

1. International maritime trade and port traffic

Government fiscal spending

Table 1.7

Major dry bulk and steel:

producers, users, exporters,

boosts consumption and helps

and importers, 2020

containerized trade weather the

(percentage share of

storm

world markets)

In 2020, full box trade fell by just 1.1 per cent

Steel producers

Steel users

to 149 million twenty-foot equivalent units (TEU)

China

(figure

1.8). This was a better outcome than

India

initially feared and quite an accomplishment

compared to the 8.4 per cent plunge in 2009

Japan

United States

following the financial crisis. After the shock in

United States

Japan

early 2020, volumes swiftly returned, as consumer

Russian Federation

Republic of Korea

demand was boosted by stimulus packages and

Republic of Korea

Russian Federation

measures to support incomes.

Turkey

Germany

The bounce-back in

2021 reflected easing

Germany

Turkey

economic impacts and the unlocking of pent-up

Brazil

Viet Nam

demand, as well as restocking and building

inventory. But there was also a shift in consumption

Islamic Republic

Other

of Iran

patterns away from services and towards goods,

notably for health products and pharmaceuticals,

Other

as well as home office equipment, along with

Iron ore exporters

Iron ore importers

changes in shopping patterns and the expansion

Australia

China

of ecommerce. The surge in trade was welcome

Brazil

Japan

but on such a scale that shipping services and port

South Africa

Europe

operations were often unable to keep up, resulting

in logistical bottlenecks. By the end of 2020 and

Canada

Republic of Korea

until the first half of

2021, the whole industry,

India

Other

including shipping, ports, shippers, and inland

Sweden

carriers struggled with shortages in containers,

Other

equipment and shipping capacity. This has added

to port congestion and reduced service levels and

Coal exporters

Coal importers

reliability, while also increasing freight rates and

Indonesia

China

surcharges (see chapter 3).

Australia

India

Reflecting the rebound in volumes on the

Russian Federation

Japan

eastbound leg of the East Asia-United States trade,

United States

Republic of Korea

the combined share of the East-West trade routes,

South Africa

European Union

including the Asia-Europe, the Transpacific, and

Colombia

Taiwan Province of

the Europe-North America (Transatlantic) increased

China

marginally in 2020. Together, intra-regional trade,

Canada

Malaysia

essentially reflecting Intra-Asian flows and South-

Other

South trade, accounted for over 39.5 per cent of

the total. Non-mainlane East-West trade routes

Grain exporters

Grain importers

(e.g., Eastern Asia-South Asia-Western Asia) and

United States

East and South Asia

North-South routes represented

12.9 per cent

Brazil

Africa

and 8.0 per cent of the market, respectively.

Argentina

South and Central

Performance varied across regions and trade

America

lanes (table 1.8). In 2020, total volumes on the

Ukraine

Western Asia

mainlane routes decreased by only 0.3 per cent,

European Union

as the declines of 2.6 per cent on the Asia-Europe

Russian Federation

North America

trade lane and of 3.2 per cent on the Transatlantic

Canada

Other

lane were partially offset by growth of 2.8 per cent

on the Transpacific route (table 1.9). Non-mainlane

Australia

trade fell by 1.6 per cent, reflecting the disruption

Other

in India which reduced the East-West trade by 3.3

Sources: UNCTAD secretariat, based on data from the World

per cent. North-South trade fell by 1.8 per cent,

Steel Association (2021), Clarksons Research Seaborne Trade

while South-South trade contracted by 2.4 per

Monitor, Volume 8, No. 6, June 2021; Dry Bulk Trade Outlook,

cent. By early summer of 2020 the rapid recovery

Volume 27, No.6, June 2021.

Figure 1.8

Global containerized trade, 1996-2021

(million TEU and percentage annual change)

180

160

140

120

100

-5

-10

Million TEU (left axis)

Percentage annual growth

Source: UNCTAD secretariat calculations, based on MDS Transmodal, World Cargo Database, June 2021.

Note: Projected figure for 2021 based on table 1.11 of this report.

in Asia had helped the intra-Asian trade rebound, and for the full year the decline was only 0.4 per cent

for intra-regional trade.

2020 saw an increase of 2.8 per cent on the Transpacific route, boosted by a surge in flows from East

Asia to the United States (table 1.9). Between the fourth quarter of 2019 and the first quarter of 2020,

containerized trade from Asia to North America had dropped by 13 per cent, but in the third quarter

of 2020 it jumped by 36 per cent. While container shipping imports to the United States had been rising,

exports from that country had fallen considerably. At the port of Los Angeles, for example, loaded imports

were four times greater than loaded exports - so the return legs often had empty containers, which

created shortages for exporters.

Faced with congestion and long waiting times at ports, stakeholders have looked for alternatives. In

some cases, they have accepted more costly air freight and in others have diverted ships away from the

busiest ports. In the short term, these problems are unlikely to diminish. The latest United States $1.9-trillion

stimulus package should boost consumer spending which, combined with low inventory levels, is expected

to increase imports (Sand, 2021b). In the second quarter of 2021, containerized shipments from East Asia

to North America were 35 per cent higher than in equivalent quarter in 2020 (MDS Transmodal, 2021).

Figure 1.9

Global containerized trade by route, 2020

(market shares, percentage of world total TEU)

Main East-West

39.7

Intra-regional

27.1

Non-mainlane East-West

12.9

South-South

12.4

North-South

8.0

Source: UNCTAD secretariat calculations, based on data from MDS Transmodal, World Cargo Database, June 2021.

Note: Non-mainlane East West: Trade involving Western Asia and the Indian Sub-continent, Europe, North America, and

East Asia.

North-South: Trade involving Oceania, Sub-Saharan Africa, Latin America, Europe, and North America.

South-South: Trade involving Oceania, Western Asia, East Asia, Sub-Saharan Africa and Latin America.

Intra-regional: Trade within Europe, Africa, Asia, North America, Latin America and Oceania.

1. International maritime trade and port traffic

Table 1.8

Containerized trade on East-West trade routes, 2016-2020

(million TEU, percentage annual change)

2016

2017

2018

2019

2020

Main East-West routes

54 480 143

57 520 472

60 323 619

59 317 350

59 168 679

Other routes

80 879 086

86 095 802

88 844 890

91 538 274

90 046 704

of which

Non-mainlane East-West

18 005 252

19 056 910

19 049 879

19 960 498

19 299 089

North-South

11 120 656

11 745 000

12 086 773

2 099 662

11 882 623

South-South

15 533 787

16 920 644

18 175 418

18 892 469

18 430 527

Intra-regional

36 219 391

38 373 249

39 532 821

40 585 645

40 434 465

World total

135 359 229

143 616 274

149 168 510

150 855 623

149 215 384

Percentage change

Main East-West routes

4.03

5.6

4.9

-1.7

-0.3

Other routes (Non-mainlane)

1.40

6.5

3.2

3.0

-1.6

of which

Non-mainlane East-West

2.57

5.8

0.0

4.8

-3.3

North-South

-0.37

5.6

2.9

0.1

-1.8

South-South

-1.68

8.9

7.4

3.9

-2.4

Intra-regional

2.75

5.9

3.0

2.7

-0.4

Source: UNCTAD secretariat calculations, based on data from MDS Transmodal, World Cargo Database, June 2021.

Note: Non-mainlane East West: Trade involving Western Asia and the Indian Sub-continent, Europe, North America, and

East Asia.

North-South: Trade involving Oceania, Sub-Saharan Africa, Latin America, Europe, and North America.

South-South: Trade involving Oceania, Western Asia, East Asia, Sub-Saharan Africa and Latin America.

Intra-regional: Trade within Europe, Africa, Asia, North America, Latin America and Oceania.

Table 1.9

Containerized trade on major East-West trade routes, 2014-2021

(million TEU and percentage annual change)

Eastbound

Westbound

Eastbound

Westbound

Eastbound

Westbound

Northern

East Asia

North America

Europe and

East

North

Europe and

to Northern

Mediterranean

Asia-North

America-East

Total

Mediterranean

Europe and

Total

Europe and

to North

America

Asia

Trans-Pacific

to East Asia

Mediterranean

Asia-Europe

Mediterranean

America

Transatlantic

2014

16.1

7.0

23.2

6.3

15.5

21.8

2.8

3.9

6.7

2015

17.4

6.9

24.2

6.4

15.0

21.3

2.7

4.1

6.8

2016

18.1

7.3

25.4

6.8

15.3

22.1

2.7

4.2

6.9

2017

19.3

7.3

26.6

7.1

16.4

23.4

2.9

4.6

7.5

2018

20.7

7.4

28.0

7.0

17.3

24.3

3.1

4.9

8.0

2019

19.9

6.8

26.7

7.2

17.5

24.8

2.9

4.9

7.8

2020

20.6

6.9

27.5

7.2

16.9

24.1

2.8

4.8

7.6

2021

24.1

7.1

31.2

7.8

18.5

26.3

2.8

5.2

8.0

Percentage annual change

2014-2015

7.5

-2.2

4.6

0.9

-3.2

-2.0

-3.1

5.1

1.7

2015-2016

4.3

6.6

5.0

6.3

2.4

3.6

0.2

3.2

2.0

2016-2017

6.6

-0.4

4.6

4.2

6.8

6.0

7.3

8.0

7.7

2017-2018

7.1

1.0

5.4

-0.9

5.7

3.7

5.3

7.6

6.7

2018-2019

-3.6

-7.4

-4.6

2.9

1.4

1.8

-4.7

-0.2

-1.9

2019-2020

3.2

1.6

2.8

-0.1

-3.7

-2.6

-4.6

-2.4

-3.2

2020-2021

17.1

2.7

13.5

8.0

9.5

9.0

1.4

9.0

6.2

Source: UNCTAD, based on MDS Transmodal, World Cargo Database, June 2021.

On other routes, the Asia-Europe trade declined by 2.6 per cent, reflecting reduced demand in

Europe - despite frontloading and inventory building in the United Kingdom ahead of Brexit in 2020.

And transatlantic trade fell by 3.2 per cent, depressed by reduced import demand from Europe,

although solid import demand from North America moderated to 2.4 per cent the fall on the backhaul

journey.

The crunch in container shipping in

2021 revealed many logistical problems, inefficiencies and

vulnerabilities that are threatening the sustainability of the recovery and the competitiveness of supply

chains. In May 2020, global schedule reliability had been 75 per cent, but in May 2021 it was only 39 per

cent and in that month the average delay for late vessels was six days - down from the February peak of

seven days, but still higher than that for most of 2020 (Metroshipping, 2021). At the same time, however,

freight rates and surcharges, and fees, including demurrage and detention fees, had soared, though the

latter rates were inconsistent across ports and carriers (Waters, 2021a).

These problems have been exacerbated by shipping network disruptions. In May 2021, the month-long

closure of the port of Yantian in China increased cargo bottlenecks leading to a backlog affecting the

region’s manufacturing sector and increasing the number of blank sailings causing headaches for shippers

(Port Technology International, 2021a; Waters, 2021b). Although less disruptive, the March 2021 grounding

of the 20,150-TEU containership Ever Given in the Suez Canal blocked the canal, increasing delays for

ships heading for Europe and added to a logistical disruption and port congestion. Some voyages had to

be re-routed around the Cape of Good Hope, adding up to 7,000 miles to the journey - and pushing up

freight and charter rates (Clarksons Research, 2021c).

Carriers argue that they are deploying all available capacity and that the current strain is being triggered

by large and rapid swings in demand, and the surges in trade flows. This is leading to delays in returning

containers and reducing effective capacity, making it difficult to cut delays, rates, and fees, while forcing

carriers to adjust their networks and avoid some ports. They had already been advising customers on the

Transpacific route, for example, that schedule disruptions would lead to blank sailings (Mongelluzzo, 2021a).

As for terminal operators, they blame delays at ports on carriers, noting increases in double-sailings - two

or more vessels sailing within the same week on the same service string or ordered set of ports. Large

peaks and troughs in volumes leading to operational instability have disrupted operations and increased

congestion (Waters, 2021c).

From their perspective, shippers have been looking for alternatives and solutions. Some have resorted

to higher-priced air freight, while on the Far East-Europe route they have also been attracted by rail

transport. According to Chinese customs data, rail volumes and capacity are still relatively small, but the

two-way trade value nearly trebled in the first five months of 2021 (Global Times, 2021). Meanwhile, on

the Transpacific and intra-Asian routes some commodities, such as grain and forestry goods, have seen

a temporary de-containerization with goods despatched on dry bulk ships, adding to the demand for

multipurpose ships and dry bulk carriers (Sand, 2021c).

To secure space on vessels, some shippers are seeking longer-term, multi-year, end-to-end contracts with

carriers. For their part some carriers seek to convert ‘ocean customers’ to long-term ‘end-to-end logistics

customers’. Under these arrangements, shippers have access to logistics services such as warehousing,

customs clearance, visibility, and the ability to speed up or slow down shipments (Knowler, 2021).

Examples include Maersk's aim to become a full-service, end-to-end integrator, and the focus of CMA

CGM and its CEVA Logistics division on creating integrated services (Tirschwell, 2021). In response to

increasing congestion and shrinking ocean capacity Maersk has launched the first block train intermodal

service between Europe and China (Port Technology International, 2021b).

The Global Shippers’ Forum argues that the real crunch point for shippers is the plummeting service

performance and the unpredictability of container delivery, and has renewed its call to remove the consortia

block exemption regulation (Baker, 2021a). It points to the increasing number of blank sailings - ships

skipping a port or ports, or cancelling the entire string - which reduce the number of containers that

shippers can export. This disproportionately affects lower-paying shippers since carriers favour cargo

from higher-paying customers (Waters, 2021c). In this respect, the United States Congress is drafting

legislation to strengthen the Federal Maritime Commission’s oversight of carriers' shipping practices

(Gallagher, 2021).

The Global Shippers Alliance maintains that since no carrier on its own will be able to guarantee

good connectivity and port pairs, the current supply chain crisis is unlikely to be solved by further

regulation of container shipping. Instead it calls on carriers to take more risk, building contingency into

their prices and employing new technology to make supply chain forecasts more accurate and more

UNCTAD REVIEW OF MARITIME TRANSPORT (2021) - page 1