‘Volume of international maritime trade to fall by 4.1 per cent in 2020’
Due to the corona crisis, global maritime transport is expected to drop by 4.1 per cent. This was reported by the United Nations Conference on Trade and Development (UNCTAD) in its “Review of Maritime Transport 2020”.
The report warns that new waves of the pandemic that further disrupt supply chains and economies might cause a steeper decline. The pandemic has sent shockwaves through supply chains, shipping networks and ports, leading to plummeting cargo volumes and foiling growth prospects, it says.
UNCTAD does, however, expect maritime trade growth to bounce back and expand by 4.8 per cent in 2021, assuming world economic output recovers.
‘The global shipping industry will be at the forefront of efforts towards a sustainable recovery, as a vital enabler of the smooth functioning of international supply chains,’ UNCTAD Secretary-General Mukhisa Kituyi says. ‘The industry must be a key stakeholder helping adapt “just-in-time efficiency” logistics to “just-in-case” preparedness.’
While Covid-19 has underscored the global interdependency of nations, it has raised existential questions about globalization and added weight to the pushback against outsourcing from distant locations, the report says.
‘The pandemic brought into sharp focus the topic of supply chain shortening, including nearshoring and reshoring, with less dependence on just-in-time and lean inventory models,’ the report states. Covid-19 has also brought to the fore the debate over diversifying production and manufacturing sites and suppliers, it adds. According to UNCTAD future-proofing the maritime supply chain and managing risks requires greater visibility and agility of door-to-door transport operations.
Various developments that have surfaced or intensified during the corona crisis will continue to have an impact once it has passed, Unctad stresses. For example, the UN organisation notes that the trade disputes between China and the US have already led to changes in trade flows. Brexit also remains an uncertainty.
The pandemic has also strengthened the case for digitalisation and eliminating paperwork in the shipping industry, including in ports, the report observes, reinforcing the need for standards and interoperability in electronic documentation. It has also boosted the application of remote surveys.
On the flip side, the pandemic has also highlighted that digitalisation comes with increased cyber security risks with a potential to cripple supply chains and services in global maritime trade.