UNCTAD15 pre-event: Sustainable and resilient supply chains – Overcoming vulnerabilities in transport and trade facilitation to ensure prosperity for all

Excellencies,

Distinguished delegates,

Ladies and gentlemen,

It is thanks to great advances in transport and trade facilitation that supply chains spreading across the world could emerge. But the COVID crisis has highlighted the vulnerability of current supply chains and the importance of overcoming vulnerabilities and strengthen their resilience and sustainability.

Today, international shipping is confronted with an un precedented imbalance between demand and supply. There are simply not enough ships and containers to carry for the demand in maritime transport. Thanks to stimulus packages and consumer behaviour, demand for shipping has not declined in the wake of the COVID crisis. What has changed, however, is the efficiency of the logistics system. COVID-19 responses in transport and industry have slowed down operations. This means that containers, ships, trucks, trailers and equipment need longer to get back to the exporter. The additional time in the system takes up capacity, which is then missing in the market.

But it is the energy transition and the necessary decarbonization of international shipping which is the most important challenge for the maritime industry in decades. It is as important as the move from sail to steam, or from steam to oil.

In this landscape, developing countries face numerous challenges. Let me highlight three:

First, international transport costs have surged. To ship a container from Shanghai to Santos today costs 10 000 US dollars. Between 2010 and 2020, shipping a container on that same route cost, on average, only 2000 dollars. The high freight rates hit smaller and weaker trading nations particularly hard.

Second, digitalization in transport and trade facilitation - such as customs automation, Single Windows, Trade Information Portals, or electronic payments - has helped dealing with the crisis. Demand for UNCTAD support to digital solutions has thus been increasing as our solutions reduce the need for physical contact in ports and border crossings, and help governments to protect populations.

Third, climate change: On one hand, transport is a major contributor to global greenhouse gas emissions. On the other hand, transport is also severely affected by the impacts of climate change. We need measures aimed at decarbonizing international shipping, but we must ensure that the most vulnerable economies receive the necessary support to implement sustainable shipping in their countries, and mitigate increases in maritime logistics costs.

Ladies and gentlemen,

UNCTAD has a long history of working on international transport and trade facilitation. Our mandate in this area dates back to our first ministerial Conference in 1964. The Conference recommended that UNCTAD should promote arrangements for intergovernmental action for the simplification of formalities relating to trade and customs procedures.

A milestone was reached in 1994, when UNCTAD’s work on transport and trade facilitation led to the United Nations International Symposium on Trade Efficiency, culminating in the Columbus Ministerial Declaration on Trade Efficiency. This conference and the resulting declaration were instrumental for the inclusion of trade facilitation in the agenda at the first WTO Ministerial Conference in Singapore in 1996.

I want to stress that trade facilitation is not important because we have the WTO Trade Facilitation Agreement. Rather, the WTO took the topic of trade facilitation on board because of its growing importance for development.

It is in this vein that we are working on these issues with full dedication so that current challenges associated with international transport and trade facilitation can be overcome and their resilience and sustainability is enhanced. Thank you for your attention.