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Global maritime trade is expected to grow by 2% in 2024, less than the 2.4% posted in 2023, according to the latest Review of Maritime Transport by UN Trade and Development
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While the 2023 growth is a rebound from the 2022 contraction, recovery remains fragile
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Container trade – slightly up by 0.3% in 2023 – is seen to rebound by 3.5% in 2024
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Through 2029, the global maritime trade is seen to advance an average of 2.4% annually
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Geopolitical conflicts and climate change are putting vital routes like the Suez and Panama Canals under strain
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This has resulted in extended shipping routes, supply chain disruptions, and higher costs
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Rising shipping costs from rerouted vessels are hitting vulnerable economies the hardest, according to the report
Global maritime trade is expected to grow by 2% in 2024, 16.7% less than the 2.4% posted in 2023, according to the just-released UN Trade and Development (UNCTAD) Review of Maritime Transport 2024.
Through 2029, the global maritime trade is seen to advance an average of 2.4% annually, the report said.
The container trade – slightly up by 0.3% in 2023 – is seen to rebound by 3.5% in 2024, but this will depend on supply chain stabilization. Demand for commodities like iron ore, coal and grains also remains strong, the report said.
While the 2023 maritime trade growth to 12.3 billion tons is a rebound from the 2022 contraction, “recovery remains fragile,” it noted.
In 2023, the global shipping fleet expanded by 3.4%, outpacing trade growth but falling short of historical averages. Total cargo capacity reached 2.4 billion tons, with the increase driven primarily by container ships and liquefied natural gas carriers. Bulk carriers and oil tankers continue to dominate the shipping market, the report said.
A record of almost 250,000 port calls by container ships in the second half of 2023 were driven by growing trade and longer routes, causing some congestion, especially in Asia, which handles 63% of global container trade.
“Soaring freight costs along with an exceptionally daunting operating landscape driven by geopolitical conflicts and climate risks continue to weigh on a lasting maritime trade recovery,” the Review for Maritime Transport said.
Due to geopolitical tensions, transits through major canals like the Suez dropped by 50% in 2023, with further declines reported in 2024. Ship capacity crossing the Gulf of Aden decreased by 76%, while tonnage through the Suez Canal fell by 70%. This forced a surge in Cape of Good Hope arrivals, up by 89%, increasing vessel demand and stretching supply chains.
As a result, shipping routes have been extended, leading to higher costs for fuel, wages, insurance and chartering; and supply chain disruptions, with huge impacts on food security, energy supplies and the global economy, considering over 80% of world trade volume is carried by sea, the report said.
The longer routes have raised global vessel ton-mile demand by 3% and container ship demand by 12% while adding to greenhouse gas emissions from shipping.
For a 20,000-24,000 TEU vessel on the Far East-Europe route, CO2 emissions alone add $400,000 in costs under the European Union’s Emissions Trading System, the report said.
Faced with severe disruptions are East African nations such as Djibouti and Sudan that depend on the Suez Canal for a third of their trade. The Panama Canal disruption has increased sailing distances by 31% for affected routes.
The report stresses the need for sustainable and resilient new infrastructure, a faster transition to low-carbon shipping, and a crackdown on fraudulent ship registrations.
A failure to adopt greener technologies could result in higher costs, regulatory penalties, and a loss of competitiveness, it said.
READ: 2.4% growth seen for maritime trade in 2023
