04 Nov 08 - Freight rates begin to fall for World Merchant fleet
Review of Maritime Transport
suggests early 2008 marked the high point of the shipping boom but a decline in the Baltic Dry Index indicates that the financial crisis has spread to international trade, with negative implications for developing countries, especially those dependent on commodities.
International seaborne trade in 2007, driven by emerging and transition economies, surpassed a record 8 billion tons, the Review of Maritime Transport 2008 (RMT) reports. Strong demand for shipping services helped push to unprecedented highs the cost of moving dry bulk commodities internationally, as echoed by the Baltic Dry Index (BDI) through the first quarter of 2008. (The BDI is a composite of shipping prices for various dry bulk products such as iron ore, grain, coal, bauxite/alumina and phosphate, and is a useful indicator of price movements.)
More recently, however, the BDI has declined more than 11-fold: from 11,793 points in May 2008 to 891 as of early November. This shows that the unfolding financial crisis has spread to international trade with negative implications for developing countries, especially those dependent on commodities.
More than 80% of international trade in goods is carried by sea, and an even higher percentage of developing-country trade is carried in ships.
The Review, an annual publication prepared by the UNCTAD secretariat, is an important source of information on this vital sector. It closely monitors developments affecting world seaborne trade, freight markets and rates, ports, surface transport, and logistics services, as well as trends in ship ownership and control and fleet age, tonnage supply, and productivity.
The Review contains a chapter on legal and regulatory developments and each year includes a chapter highlighting a different region. In 2008, the focus is on Latin America and the Caribbean.
Key developments reported this year's Review include the following:
- In 2007, world seaborne trade (goods loaded) increased by 4.8% to surpass 8 billion tons for the first time.
- By the beginning of 2008, the total world merchant fleet had expanded by an impressive 7.2%, to reach 1.12 billion deadweight tons (dwt). The tonnage of oil tankers increased by 6.5% and that of bulk carriers by 6.4%. These two types of ships together represent 71.5% of total merchant fleet tonnage, a slight decrease from 72.0% in January 2007.
- At the beginning of 2008, the average age of the world fleet dropped marginally, to 11.8 years. Containerships made up the youngest fleet with an average of 9 years.
- By May 2008, the world containership fleet had reached approximately 13.3 million twenty-foot equivalent units (TEUs), of which 11.3 million TEUs were on fully cellular containerships. This fleet included 54 containerships of 9,000 TEUs and above, which were operated by five companies: CMA-CGM (France), COSCON and CSCL (both from China), Maersk (Denmark) and MSC (Switzerland).
- World container port throughput grew by an estimated 11.7% to reach 485 million TEUs in 2007, the Review reports. Chinese ports accounted for about 28.4% of total world container port throughput.
- Rail freight traffic for 2007 grew by 28% in Saudi Arabia, 12.6% in Viet Nam, 9.4% in India, 7.6% in China, 7.2% in the Russian Federation, and by 1% in Europe and the United States.
- An important development in the field of security relates to the certification and mutual recognition of Authorized Economic Operators (AEOs), both at the EU level and under the World Customs Organization (WCO) Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework).
In the area of environmental regulation is the intensive and expedited work by the International Maritime Organization (IMO) on greenhouse gas emissions from ships. The aim is to develop a binding international regime for adoption in 2009.