Global maritime trade will plunge by 4.1% in 2020 because of the Covid-19 pandemic, the United Nations’ trade body estimates.
The UN Conference on Trade and Development (Unctad) believes further waves of infections could cause an even steeper decline.
The virus has sent shockwaves through supply chains, shipping networks and ports, leading to plummeting cargo volumes and falling growth prospects, the agency said in its Review of Maritime Transport 2020.
But Unctad added that although the short-term outlook for maritime trade is grim, the shipping industry can be at the heart of economic and trade recovery in the future.
Unctad predicts maritime trade could expand by 4.8% in 2021 if world economic output rebounds with methods to control the virus.
Earlier this year, the World Trade Organization forecast a recovery in world merchandise trade volume in 2021 of 21.3% to 24% depending on the scenario, Unctad added.
It has called for a huge liquidity injection through extraordinary special drawing rights tailored to developing-country needs to boost trade, and proposed that a $500bn “Marshall Plan” be instituted to improve healthcare in developing countries.
“The global shipping industry will be at the forefront of efforts towards a sustainable recovery,” said Unctad secretary-general Mukhisa Kituyi.
“The industry must be a key stakeholder helping adapt ‘just-in-time efficiency’ logistics to ‘just-in-case’ preparedness.”
The contraction of cargo volumes brought additional challenges to structural market imbalances after a weak 2019, the agency said in the report. However, the container shipping industry was able to maintain profitability by cutting capacity and reducing costs, Unctad said.
The downside of box trade discipline was severe space limitations to transport goods and delivery delays for shippers.
“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,” Unctad said, noting that it expects the trends to continue.
But the report also exposed how unprepared the world seemed, underscoring an urgent need to invest in risk management and emergency response preparedness in transport and logistics.
“Border agents, port workers and customs officials play an essential role in keeping trade moving,” Kituyi said. “It will be important to assess the best practices that emerge from their experiences to strengthen trade facilitation in the years to come.”
But Unctad warned that returning to normal from the pandemic will take time and this normality will likely differ from that expected before it.
