The United Nation’s Conference on Trade and Development urges developing countries to identify comparative advantages in sectors such as shipbuilding, registration, and staffing, in order to encourage the industry’s growth.
According to the latest Review of Maritime Transport 2016, the industry is facing the slowest pace of growth since 2009 and the future growth looks uncertain.
The UNCTAD mentioned how the escalation of industry’s carrying capacity (By 3.5% to 1.8 billion deadweight tons in 2015) and low freight rates led to container market worst ever bankruptcy with Hanjin Shipping’s collapse.
Container shipping, which carries about 95% of the world´s manufactured goods, showed a poor performance.
“With global trade growing at its slowest pace since the financial crisis, the immediate outlook for the shipping industry remains uncertain and subject to downside risks,” UNCTAD Secretary-General Mukhisa Kituyi said, ahead of the report’s launch on 7 November.
“The push for ever larger ships is at the root of the industry’s problems,” he added. “There’s just not enough cargo right now to fill the newly acquired, bigger vessels.”
In this sense, the report explains how the construction of mega vessels is affecting shipping business.
Companies have ordered bigger ships to reduce operating’s costs, but most of developing countries ports (which accounted for 60% of the goods loaded onto ships in 2015) lack of the appropriate infrastructure for these ships. Therefore, fewer port calls could produce a less competitive market and higher shipping costs.
However, the UNCTAD sees potential maritime trade and business opportunities by the generation of new transport infrastructures such as the extension of the Panama Canal and Suez Canal.
“Many industries and businesses in developing countries could be much more competitive if their ports were more efficient,” says Shamika N. Sirimanne, Director of the UNCTAD Division on Technology and Logistics, adding that delays in African ports add roughly 10% to the cost of imported goods and even more to exports.
To read the full review, click here: http://unctad.org/en/PublicationsLibrary/rmt2016_en.pdf