Asian Developing Countries Leading Expansion of Shipping Services
Geneva, 23 November 2011 -- The globalization of maritime businesses allows shipping companies to source from the most cost-efficient suppliers. This has led to the reduction of international transport costs, which directly benefits global merchandise trade, according to the latest UNCTAD Review of Maritime Transport(1).
Maritime transport saw an increase in demand in 2010, in particular in the dry bulk and container trade segments. Total seaborne trade reached an estimated 8.4 billion tons.
On the supply side, 2010 saw record deliveries of new tonnage, 28 per cent higher than in 2009, resulting in an 8.6 per cent growth in the world merchant fleet. The fleet reached almost 1.4 billion deadweight tons (DWT), in January of 2011, an increase of 120 million of DWT over 2010. New deliveries stood at 150 million DWT, against demolitions and other withdrawals from a market of approximately 30 million DWT.
Developing countries have made remarkable progress in international seaborne transport -- as documented for more than 40 years by UNCTAD´s annual Review of Maritime Transport (RMT). Developing countries´ shipping no longer consists solely of raw materials exports to the developed world. Indeed the last decades have seen their increased participation in global supply chains, which led to a surge in imports of primary and intermediary products.
Between 1970 and 2010, developing countries´ share in the volume of seaborne imports rose from just 18 per cent to 56 per cent of the world´s total. The world´s busiest container ports are Shanghai, Hong Kong (China) and Singapore, and Asian developing countries have the highest indicators of maritime transport connectivity, as captured by UNCTAD´s Liner Shipping Connectivity Index (LSCI).
But while the consolidation of the services provided by the container shipping industry achieved improved operational efficiency, it may also have entailed a loss in negotiating power for some players and resulted in less overall market efficiency for smaller trading nations. In July 2011, UNCTAD found that 35 coastal countries were served by three or fewer liner companies, compared to 25 countries just five years earlier.
The Report also highlights the entry into force, in September of 2011, of the International Convention on Arrest of Ships which was developed under the auspices of UNCTAD, during the United Nations International Maritime Organisation (IMO) high-level conference in 1999.
In the past decades, developing countries have substantially expanded their fields of expertise to maritime sectors of greater business sophistication and technical complexity. They first became major market players in the provision of seafarers and vessel registration, and are now expanding into practically all major maritime sectors.
As highlighted in this year´s special chapter of the UNCTAD Review of Maritime Transport, developing countries are not only users of shipping services but increasingly participants in the provision of these services, through the operation of seaports, the construction of ships, containers, and in the transport of equipment.
In shipbuilding (China and the Republic of Korea), scrapping (Bangladesh), and the provision of seafarers (Philippines), developing countries now account for more than three quarters of the world´s supply. Companies from Dubai, Hong Kong (China), and Singapore operate container terminals in many ports of the world, both in developing and in developed countries.
However, many least developed countries (LDCs) still do not have the ability to participate fully in the maritime businesses, which increasingly requires advanced technological capacities and the existence of industrial or service clusters. These countries are confronted with the double challenge of having to upgrade seaport facilities to accommodate larger ships while seeing competition being reduced with fewer regular shipping services calling at their ports.
Shipping companies from developed and developing countries alike increasingly rely on goods and services from developing countries to remain competitive. Already in the 1970s, ship-owners made use of open registries, enabling them to hire crews from countries with lower labour costs. In more recent decades, shipping companies also started purchasing their vessels in shipyards from developing countries, as vessels constructed in European or United States shipyards would often be too expensive.