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Friday, May 24, 2024

World maritime trade: Transformation of the sector in sight

According to new estimates from the United Nations Conference on Trade and Development (UNCTAD), world seaborne trade will decline by 4.1% this year due to disruptions caused by COVID-19. This will have an impact on supply chains, shipping networks and ports, leading to a drop in freight volumes and compromising growth prospects. However, a positive growth rate is forecast for 2021 (+4.8). Governments are urged to anticipate changes in order to adapt to the new world that will emerge after the health crisis.

The new study published today by UNCTAD finds that, in response to the disruption caused by the pandemic, players in the maritime sector have made adjustments to their operations, finances, health and safety protocols, working methods and procedures. Reforms have been undertaken by several governments to maintain the fluidity of trade while ensuring the safety of people. Maritime freight rates were maintained at stable levels despite a decline in demand.

Globalization

COVID-19 highlighted the interdependence of the world's countries, and also raised existential questions about globalization. Indeed, the problems associated with the shortening of supply chains, including "local relocation", are now being discussed, as is the diversification of production sites and suppliers. The report underlines the urgency of investing in risk management and emergency response in the transport and logistics sector. UNCTAD's Director of Technology and Logistics, Shamika N. Sirimanne, points out that "the pandemic must not overshadow measures to combat climate change in maritime transport". Research into green, sustainable solutions must be encouraged. This will also help combat carbon emissions from shipping, and accelerate the energy transition to non-fossil fuels.

The importance of digitalization and digitization

The pandemic has strengthened the case for digitization and automation, which require additional investment. The acceptance of digital copies instead of paper originals, pre-arrival processing, electronic payments and customs automation are all helping to boost international trade. Connectivity levels at three African ports (Lagos, Durban, TangierMed), for example, have held up well compared with other ports in the region, despite "blank sailings" (or cancellations of calls or vessels) having a negative impact on service frequency. The pandemic revealed increased cybersecurity risks, linked to digitization, which could paralyze supply chains and services associated with global maritime trade.

Impact on Africa

COVID-19 has had a negative impact on Africa. In the second quarter of 2020, UNCTAD estimated the decline in the continent's exports at -35% and its imports at -25%. Despite some improvements in July 2020, the figures still show significant declines, estimated at -17% for imports and -21% for exports. Restrictions on land transport have caused some problems affecting cross-border crossings, resulting in delays. According to the study, maritime transport in Africa faces challenges in the areas of innovation and technology, infrastructure quality, regulation and governance, human resources and skills, and business and investment.

Pre-pandemic trends

The report also offers a detailed look at global maritime trade in 2019. This mediocre year was punctuated by events such as tensions between China and the USA, uncertainties surrounding Brexit, complaints lodged by several countries against Indian tariffs, the trade dispute between Japan and Korea and general trends towards protectionism. The report estimates that the additional tariffs resulting from tensions between China and the USA have led to a 0.5% reduction in the volume of seaborne trade.