Maritime trade to fall by 4.1% in 2020, says UNCTAD
By Fredrick Wright
The UN (United Nations) Conference on Trade and Development (UNCTAD) has projected that volume of international maritime trade would fall by 4.1 per cent in 2020, owing to supply-chain disruptions, demand contractions and global economic uncertainty caused by the pandemic.
UNCTAD, in its latest “Review of Maritime Transport 2020”, said the sector is at a pivotal moment facing not only immediate concerns resulting from the pandemic but also longer-term considerations, ranging from shifts in supply-chain design and globalization patterns to changes in consumption and spending habits, a growing focus on risk assessment and resilience-building, as well as a heightened global sustainability and low-carbon agenda.
The sector, according to UNCTAD is also dealing with the knock-on effects of growing trade protectionism and inward-looking policies.
It stated that the trends unfolded against the backdrop of an already weaker 2019 that saw international maritime trade lose further momentum, while lingering trade tensions and high policy uncertainty undermined growth in global economic output and merchandise trade.
However, the report stated that maritime trade volumes are expected to rebound by 4.8 per cent in 2021, if economic growth resumes as the pandemic subsides. But further waves of the pandemic could lead to a steeper decline in shipping.
The maritime transport review projected that many developing countries would be affected by declining demand and export revenues, remittances, foreign direct investment and official development assistance.
“The least developed countries are hit hard, given their limited resources and exposure to supply-chain disruptions such as in exports of textiles and clothing products (for example, Bangladesh). For the economies of Africa, developing America and Western Asia, and transition economies, an added concern is the sharp fall in commodity prices,’ it stated.
Highlighting the priority action areas in preparation for a post-COVID-19 world, UNCTAD said: “The COVID-19 crisis has revealed the importance of maritime transport as an essential service ensuring the continuity of trade and supply of critical supplies and the global flow of goods during the pandemic. Ensuring the proper functioning of maritime transport services is a precondition for economic recovery,”
It added that policies that consider long-term objectives for the sector would be crucial to “build back better” in a future beyond the pandemic crisis.
Noting that ports have been central in keeping supply chains open and allowing maritime trade to continue, as they became the first line of defence in stopping the spread of the pandemic and protecting essential staff in their daily tasks, while letting goods flow, it stated that to respond to this challenge, ports had to introduce significant changes in procedures and operations
UNCTAD listed some priorities to include: promotion of technological tools, including through digital trade facilitation reforms, to enhance sectoral resilience to future disruptions in transport and supply-chain operations.
It also expected nation to; increase the accessibility of ICT tools, develop data infrastructure capabilities; build local capacities on ICT tools and solutions; develop skills to work effectively in a world of advanced automation and technology; mitigate cybersecurity risks; and make use of available international technical support for digital trade facilitation reforms.
