World seaborne trade slowed down in 1998, growing at only 2.2 per cent, its lowest rate since 1987, according to preliminary estimates from UNCTAD. The decline from the 4.1 per cent growth rate recorded the previous year was largely due to sluggish trade in liquid bulk cargoes.
Despite the slowdown, the volume of world trade carried by sea hit a new record of over five billion tons (5,064 million tons), UNCTAD reports today in its annual Review of Maritime Transport(1) (143 pp).
Despite trade contraction in several Asian countries and the fluctuating performance of African economies, the latest data from UNCTAD indicates that the overall share of developing countries in world seaborne trade remained virtually unchanged in 1998. As a share of goods loaded, developing countries recorded 51.0 per cent, compared with 51.2 per cent in 1997; and 27.7 per cent of goods unloaded, the same as in 1997. The goods loaded figure reflects the heavy preponderance of oil exports in the statistics.
The 1998 Review focuses in particular on the trade and transport of East and South-East Asia, suffering from the effects of the current economic slowdown and recent financial crisis. The publication, thirtieth in the series, examines overall trends in seaborne trade and transport, analysing the comparative performance of different regions from a developmental perspective.
The UNCTAD statistics indicate that the share of Asian developing countries as a whole in goods loaded and unloaded decreased marginally last year, to 26.2 per cent and 18.7 per cent respectively. In Africa, seaborne exports declined from 10.6 per cent in 1997 to 10.1 per cent, while imports remained unchanged at 4.0 per cent. As for the developing Americas, its relatively good economic performance in 1998 was reflected in a modest increase in goods loaded, from 13.9 to 14.3 per cent.
Looking in detail at 1997 trends in seaborne trade, the Review reports that, pushed by a substantial 6.0 per cent increase in main dry bulk commodities, the overall volume of dry cargo shipments recorded a 5.7 per cent growth rate — the highest since 1988. Iron ore and grain, shipments of which rose by 8.2 per cent and 5.2 per cent respectively, were the major bulk commodities contributing to this strong performance.
Increased volumes of containerized manufactured goods — up 7.7 per cent over 1996 — were another driving force behind the 1997 seaborne trade’s results. Tanker trades represented 44 per cent of the total, increasing by 2.1 per cent to 2.17 billion tons.
Reviewing the decade, the Review reports that between 1990 and 1998 world seaborne trade grew at an average annual rate of 3.3 per cent, which is more than four times the rate recorded for the 1980s.
Developing countries improve fleet ownership position
The world merchant fleet continued to expand at the rate of 2.3 per cent to 775.9 million deadweight tons (dwt) by the end of 1997. Analysis of the regional structure of the world fleet shows moderate changes in the share of developing countries in 1997. They expanded their fleet to 149.9 million dwt, representing 19.3 per cent of the world fleet, compared to 19.5 per cent in 1996. This development was mainly attributable to the increase in the general cargo ship sector, where their share increased to 26.9 per cent.
This moderate tonnage growth did not have a positive impact on the age structure with average vessel age in developing countries further deteriorating to 19.0 years in 1997 compared to 17.4 years for the world fleet as a whole. This is a clear indication of the continued qualitative deficiencies in the fleets of many developing countries. Regional ownership patterns remain problematic and unbalanced, with ownership concentrated in Asian developing countries. They own 13.9 per cent of the world tonnage or 71.8 per cent of the developing country group’s fleet, while African developing countries own only 0.8 per cent of the world, or 4.3 per cent of the developing countries group tonnage.
Favourable operational productivity
On the basis of preliminary estimates, 1998 world shipping provided an engine for growth of world trade. At 2.3 per cent, the rate of tonnage increase in 1997 was considerably lower than that of seaborne trade, with growth differentials compensated by improved operational productivity of the world fleet. The volume of cargo carried per dwt increased to the record level of 6.38 tonnes in 1997 from 6.28 in 1996. Another performance indicator, ton-miles per dwt, also improved in 1997 to 27,598 from 27,097 ton-miles per dwt. In 1998, world seaborne trade is estimated to have grown at a rate of 2.2 per cent and the world fleet is estimated to have expanded at almost the same rate as in 1997 (2.3 per cent).
Focus on Asian economic and maritime transport development
Changing pattern in international trade and manufactured goods
The substantial economic slowdown since the final quarter of 1995 and subsequent financial crises in Asia since 1997 have greatly affected East–West trade and transport services. In liner trades especially, Asian overall imports in both trans-Pacific trade and European trade in 1998 have declined from the level of the previous year. On the other hand, their exports to Europe and North America will continue to expand, reflecting sustainable competitiveness, largely due to the devaluation of the currencies of the major exporting countries. The imbalance of cargo movements between the eastbound and the westbound trade routes will exercise considerable additional cost pressure on all carriers active in the Asian trades.
Slowing-down of the intraregional liner market
In recent years, intraregional trades have been expanding significantly, especially in South-East Asia. The total seaborne general cargo movement in the intra-Asian liner market, excluding that of China, is estimated to have reached 5.7 million TEUs in 1997. In 1998, adversely affected by the financial crisis, the total intra-Asian cargo movements are estimated to have slow down to 5.4 million TEUs.
Intra-Asian liner operators are mainly engaged in two types of services: direct services between Asian countries and feeder services between local ports and hub ports in Asia. As at the end of 1996, a total of 140 operators deployed 783 vessels with an aggregated carrying capacity of 386,000 TEUs. The vessels’ average carrying capacity was nearly 500 TEUs. In the capacity range of vessels of over 5,000 TEUs there are 21 operators, who deploy 345 vessels with an aggregated carrying capacity of 263,000 TEUs, or an average of 760 TEUs per vessel. These operators account for 68.2 per cent of the total carrying capacity.
Significant freight factor variations
In 1996 the share of freight costs in import values of developing countries decreased from 8.3 per cent in 1995 to 8.06 per cent. Asia’s freight factor in 1996 slightly improved to 7.97 per cent from 8.03 per cent in 1995 with considerable variations among major Asian importing countries.
The freight factors of the Republic of Korea and Singapore were relatively low, at 5.22 per cent and 5.58 per cent respectively, while those of Malaysia and Thailand were as high as 9.36 per cent and 9.60 per cent respectively. India and Indonesia faced the highest charges; their freight factors were 10.32 per cent and 10.55 per cent respectively. The freight factors of the Pacific islands as a whole slightly improved in 1996 to 12.31 per cent from 12.39 per cent, although it stagnated at the higher level. These variations in freight costs can be explained by geographical factors as well as by differences in trade and shipping patterns, particularly in the liner sector.