Shipping and The Global Economy
More than 90 per cent of global trade is carried by sea. It is almost impossible to quantify the value of volume of world seaborne trade in monetary terms: however, the United Nations Conference on Trade and Development (UNCTAD) estimates that the operation of merchant ships contributes about US$380 billion in freight rates within the global economy, equivalent to about 5% of total world trade. Shipping trade estimates are usually calculated in ton-miles – a measurement of tons carried, multiplied by the distance travelled. In 2004, for example, the industry shipped around 6.76 billion tonnes over a distance of about 4 million miles, resulting in a staggering total of 27, 635 billion ton-miles of trade.
Figure 1 - Growth in world seaborne trade
As with all industrial sectors, however, shipping is not immune to occasional economic downturns – a notable fall in trade occurred, for example, during the worldwide economic recession of the early 1980s. However, although the growth in seaborne trade was tempered by the Asian financial crisis of the late 1990s, there has generally been healthy growth in maritime trade since 1993. Overall, between 1980 and 1999, the value of world trade grew at 12% per year, while total freight costs, during the same period, increased by only 7%, demonstrating the falling unit costs of marine transportation.
In 2004 world output grew by 4.1 per cent; world seaborne trade reached 6.76 billion tons of loaded goods an increase of 4.3 per cent.
World container port traffic expanded by 9.6 per cent over that of the previous year, reaching 303.1 million TEUs (20-foot equivalent units), with ports of developing countries handling 122.4 million TEUs, or 40.4 per cent of the total.
In the context of a global economy, the contribution made by shipping as a major industry in its own right is very significant, and increasingly so for the developing world.
Maritime activity already provides an important source of income to many developing countries.
Indeed, developing countries now lead the world in some of shipping’s most important ancillary businesses, including the registration of ships, the supply of sea-going manpower and ship recycling.
They also play a significant part in ship owning and operating, shipbuilding and repair and port services, among others.As seaborne trade continues to expand, it brings benefits for consumers throughout the world through low freight costs that are continuing to decrease in real terms. Thanks to the growing efficiency of shipping as a mode of transport and to increased economic liberalization, the prospects for the industry’s further growth continue to be strong.
Source: www.imo.org
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