IUMI 2010 ZURICH
12 – 15 September
Shipping and global trade:
A review of major developments
12 TO 15 SEPTEMBER
Hassiba Benamara
UNCTAD
CONTENTS
I. Macro factors
Economic growth and merchandise trade
II. Shipping and seaborne trade
Demand: seaborne trade
Supply: fleet developments
Freight rates
III. Emerging challenges and some relevant issues
to monitor
 Environment
 Energy
12 TO 15 SEPTEMBER
 Other
2
I.
12 TO 15 SEPTEMBER
Economic growth and
merchandise trade
3
The first and deepest contraction (-1.9%)…
… in global output since the 1930s
World GDP (real), 1971-2010
12 TO 15 SEPTEMBER
4
UNCTAD and WTO, 2010
Broad-based and varied speed
World GDP (% annual growth), 2004-2010
15.0
United States
10.0
EU
Japan
5.0
India
China
0.0
South Africa
2004
2005
2006
2007
2008
2009
2010
Brazil
Russian
Federation
-5.0
-10.0
12 TO 15 SEPTEMBER
5
UNCTAD, 2010
The “Great Trade Collapse”
World GDP and trade (real), 1971-2010
15
per cent annual growth
10
Exports
5
GDP
09
2010
08
07
06
05
04
03
02
01
2000
99
98
97
96
95
94
93
92
91
89
1990
88
87
86
85
84
83
82
81
1980
79
78
77
76
75
74
73
72
1971
0
-5
-10
-15
12 TO 15 SEPTEMBER
6
UNCTAD and WTO, 2010
Adverse trade shocks across regions
World merchandise trade (real), 2009
Tra ns itio n Ec o nom ie s
Im po rts
E x ports
C hin a
W e s tern As ia
D ev e lop ing As ia
D ev e lop ing Am e ri ca
Afric a
D ev e lop ed As ia (J a pa n & I sra el )
E urop ea n Un ion (2 7)
N orth A me ric a
W O RL D
-30 %
-25 %
-2 0 %
-15 %
12 TO 15 SEPTEMBER
-1 0%
-5%
0%
7
UNCTAD , 2010
An unprecedented trade contraction
 Merchandise exports dropped about 7 times more rapidly than
global GDP (elasticity ≈ 2 in 60s and 70s and 3.4 in 90s).
UNCTAD estimate for 1971-2010 ≈ 2.5.
 Demand shock and synchronized drop.
Multiplier effect:
Product composition of the fall in demand (e.g.
consumer goods and durables, higher income elasticity).
Trade in goods drops faster than trade in services which
account for a larger share of GDP.
Globalised production and increased trade in parts and
components.
Deepening and widening of global supply chains.
Limited trade finance (in addition to demand shock).
12 TO 15 SEPTEMBER
8
BUT…
… there are signs of recovery in
economic indicators…
12 TO 15 SEPTEMBER
9
Business confidence is improving…
Manufacturing Purchasing Managers’ Index, 2007-2010
120
World
Advanced economies
Emerging economies
110
100
90
80
70
12 TO 15 SEPTEMBER
2010m5
2010m3
2010m1
2009m11
2009m9
2009m7
2009m5
2009m3
2009m1
2008m11
2008m9
2008m7
2008m5
2008m3
2008m1
2007m11
2007m9
2007m7
2007m5
2007m3
2007m1
60
10
IMF, WEO Update, July 2010
…so does consumer confidence…
Retail sales, 2007-2010
170
World
Advanced economies
Emerging economies
160
150
140
130
120
110
100
12 TO 15 SEPTEMBER
2010m3
2010m1
2009m11
2009m9
2009m7
2009m5
2009m3
2009m1
2008m11
2008m9
2008m7
2008m5
2008m3
2008m1
2007m11
2007m9
2007m7
2007m5
2007m3
2007m1
90
11
IMF, WEO Update, July 2010
12 TO 15 SEPTEMBER
IMF, WEO Update, July 2010
2010m4
2010m3
2010m2
2010m1
2009m12
2009m11
2009m10
2009m9
2009m8
2009m7
2009m6
2009m5
Advanced economies
2009m4
2009m3
2009m2
2009m1
2008m12
2008m11
2008m10
2008m9
2008m8
2008m7
2008m6
2008m5
World
2008m4
2008m3
2008m2
2008m1
2007m12
2007m11
2007m10
130
2007m9
2007m8
2007m7
2007m6
2007m5
2007m4
2007m3
2007m2
2007m1
…and industrial production
Industrial production, 2007-2010
Emerging economies
125
120
115
110
105
100
95
90
85
80
12
GDP growth turned positive in Q2-2009…
…UNCTAD expects GDP to grow by 3.5% in 2010
World GDP (% annual growth), 2007-2010
8
6
4
2
2010Q1
2009Q4
2009Q3
2009Q2
2009Q1
2008Q4
2008Q3
2008Q2
2008Q1
2007Q4
2007Q3
2007Q2
2007Q1
0
-2
-4
-6
-8
12 TO 15 SEPTEMBER
13
IMF, WEO Update, July 2010
World exports forecast to grow…
…by + 9.5% in 2010, 7.5% in developed economies;
11% ROW (developing and EIT)
150
Merchandise exports, 2007-2010
Advanced economies
Emerging economies
12 TO 15 SEPTEMBER
2010m3
2010m1
2009m11
2009m9
2009m7
2009m5
2009m3
2009m1
2008m11
2008m9
2008m7
2008m5
2008m3
2008m1
2007m11
2007m9
2007m7
2007m5
2007m3
2007m1
80
90
100
110
120
130
140
World
14
IMF, WEO Update, July 2010
Commodity prices are also rising
Commodity price indices (actual and forecast, 2000=100), 2000-2011
12 TO 15 SEPTEMBER
15
World Bank, 2010
Longer term outlook and a new global design
Major industrialized countries
– Twenty years up to 2009:
– Next twenty years forecast:
+2.2%
+1.8%
Major developing countries
– Twenty years up to 2009:
– Next twenty years forecast:
+6.3%
+5.9%
World average
– Twenty years up to 2009:
– Next twenty years forecast:
+2.9%
+3.5%
World exports (tons):
- Expected to double in the next 20 years.
12 TO 15 SEPTEMBER
16
Source: IHS-Fairplay, as presented to IAME 2010, Lisbon, July 2010
II. Shipping and seaborne trade
12 TO 15 SEPTEMBER
17
Unsheltered from shocks in the wider
economy…
…seaborne trade contracted (-4.5%) in 2009
World seaborne trade (tons), 1970-2009
Year
Oil
Main bulks
a
Total
Other dry cargo
(all cargoes)
1970
1 442
448
676
2 566
1980
1 871
796
1 037
3 704
1990
1 755
968
1 285
4 008
2000
2 163
1 288
2 533
5 984
2006
2 698
1 849
3 135
7 682
2007
2 747
1 972
3 265
7 983
2008
2 732
2 079
3 399
8 210
2009
-3%
b
2 649
+1.1%
2 102
12 TO 15 SEPTEMBER
3 092
-9%
-4.5%
7 843
18
UNCTAD RMT, 2010
All shipping segments negatively affected…
…but major dry bulk cargo held strong; China factor
Seaborne trade (% change), per cargo type, 2009-2010
Iron ore
Coal
Grain
Bauxite and Alumina/Phosphate Rock
Major dry bulk
2009
8%
1%
-2%
-27%
1%
2010f
6%
9%
2%
18%
7%
Minor dry bulks
-13%
9%
-9%
-9%
6%
11%
-3%
-4.5%
3%
5.2%
Other dry cargo
of which container
Oil
Total seaborne trade (tons)
12 TO 15 SEPTEMBER
19
UNCTAD, RMT 2010; Clarkson Shipping Review (spring 2010), Dry Bulk Outlook, August, 2010, and Container Intelligence Monthly, August, 2010
2009, a dramatic year in the history of
container shipping (-9.4%)
Global container trade, 1990-2010
160
20
140
15
120
100
5
80
-
Percentage
Million TEUs
10
60
-5
40
20
-10
-
-15
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
12 TO 15 SEPTEMBER
20
UNCTAD, based on Clarkson Research Services and Drewry Consultants
Fleet developments
12 TO 15 SEPTEMBER
21
Growth in ship supply capacity continues…
…1.27 billion dwt at the beginning of 2010, 7% increase
World fleet by vessel type in million dwt, 1980-2010
1,400
1,200
1,000
800
600
400
200
0
1980
1985
1990
1995
2000
2005
Other
31
45
49
58
75
49
92
Container
11
20
26
44
64
98
169
General cargo
116
106
103
104
101
92
108
Dry bulk
186
232
235
262
276
321
457
Oil Tanker
339
261
246
268
282
336
450
12 TO 15 SEPTEMBER
2010
22
UNCTAD, based on IHS- Fairplay data
12 TO 15 SEPTEMBER
UNCTAD, based on IHS- Fairplay data
12 / 2009
09 / 2009
06 / 2009
03 / 2009
12 / 2008
09 / 2008
06 / 2008
03 / 2008
12 / 2007
09 / 2007
06 / 2007
03 / 2007
12 / 2006
09 / 2006
06 / 2006
03 / 2006
12 / 2005
09 / 2005
06 / 2005
03 / 2005
12 / 2004
09 / 2004
06 / 2004
03 / 2004
12 / 2003
09 / 2003
06 / 2003
03 / 2003
12 / 2002
09 / 2002
06 / 2002
03 / 2002
12 / 2001
09 / 2001
06 / 2001
03 / 2001
12 / 2000
Record new deliveries and an impressive
orderbook
World tonnage on order, 2000-2010 (000’ dwt)
300 000
250 000
Dry bulk
200 000
150 000
100 000
Oil tankers
50 000
Container ships
General cargo
0
23
Wider supply and demand imbalance…
…as illustrated by container shipping
Supply and demand in container shipping, 2000-2010
15.0
10.0
5.0
0.0
-5.0
-10.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010a
Demand
10.7
2.4
10.5
11.6
13.4
10.6
11.2
11.4
4.3
-9.1
11.1
Supply
7.8
8.5
8.0
8.0
8.0
10.5
13.6
11.8
10.8
5.1
8.8
12 TO 15 SEPTEMBER
24
UNCTAD, based on Clarkson Container Intelligence Monthly
Freight rates
12 TO 15 SEPTEMBER
25
D/S determine freight rates…
 The year 2009 was a bleak year for freight rates in all
market segments.
 By the end of 2009, rates in all sectors have recovered from
their earlier lows albeit still significantly below their pre-
crisis levels.
 Freight rates for 2010 were volatile and future prospects
remain uncertain.
12 TO 15 SEPTEMBER
26
Dirty Index
12 TO 15 SEPTEMBER
UNCTAD , based on Lloyd’s Shipping Economist data
May-10
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
May-09
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Nov-06
Sep-06
Jul-06
May-06
Mar-06
Jan-06
Nov-05
Sep-05
Jul-05
May-05
Mar-05
Jan-05
…tanker rates fell with falling oil demand
Baltic Tanker Indices, 2005-2010
2,500
2,000
1,500
1,000
500
0
Clean Index
27
0
Tramp
12 TO 15 SEPTEMBER
UNCTAD, based on ISL-Shipping Statistics and Market Review
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
May-09
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Nov-06
Sep-06
Jul-06
May-06
Mar-06
Jan-06
Nov-05
Sep-05
Jul-05
May-05
Mar-05
Jan-05
Nov-04
Sep-04
Jul-04
May-04
Mar-04
Jan-04
…dry bulk rates supported by demand from
China…
Dry cargo freight indices, 2004-2010
3000
2500
2000
1500
1000
500
Trip
28
… container rates supported by a series of
counter-measures
Container freight rates, 2005-2009
2,500
2,000
1,500
1,000
500
0
q1
2005
q2
2005
q3
2005
Asia–USA
q4
2005
q1
2006
USA–Asia
q2
2006
q3
2006
q4
2006
Europe–Asia
q1
2007
q2
2007
Asia–Europe
q3
2007
q4
2007
q1
2008
USA–Europe
12 TO 15 SEPTEMBER
q2
2008
q3
2008
q4
2008
q1
2009
q2
2009
q3
2009
q4
2009
Europe–USA
29
UNCTAD, based on Containerisation International data
Summary of key points (1)
 2009, a record in history.
 Prospects are improving; recovery varying in speed, driven by
emerging developing economies (e.g. Asia).
 Various forecasts for 2010/2011 (UNCTAD, IMF, WB, IHSFairplay, …); all positive.
 World merchandise trade is forecast to grow in 2010 and
2011(e.g. WTO and World Bank).
 World seaborne trade also forecast to grow in 2010 and 2011.
12 TO 15 SEPTEMBER
30
BUT…
… the outlook remains fragile in
view of various downside risks…
12 TO 15 SEPTEMBER
31
Summary of key points (2)
 Sustainability of recovery, strength and shape (V, U or W)?
 Public debts
 Unemployment and bank lending
 Stimulus packages (duration/end)
 Is observed trade recovery driven by new demand?
 Supply-side pressures
 Known and unknown crises
12 TO 15 SEPTEMBER
32
III. Emerging challenges and issues to monitor
 Energy: access, security and prices
 Climate change: mitigation and adaptation
 Seafaring crisis?
 Supply chain security and piracy
 Other global crises: e.g. food, water, financial…
 Geopolitics
 Other ?
12 TO 15 SEPTEMBER
33
Focus on two emerging global challenges
Climate change & energy: interconnected
 Climate change mitigation action has implications for ship
design, engines, fuel systems, operations, services,
management, value, etc.
 Indirect implications through changes in demand for shipping
services. E.g. climate induced changes in trade structure,
flows and patterns through impacts on sectors such as energy
production and consumption, agriculture and food products,
demography and human settlement, etc.
 Climate change mitigation and adaptation require energy.
However, there are signs of a looming energy crisis. Shipping
is heavily reliant on oil for propulsion and not yet in a position
to effectively and widely adopt substitutes.
12 TO 15 SEPTEMBER
34
Conclusion?
12 TO 15 SEPTEMBER
35
Addition information…
…and publications by UNCTAD, including on oil prices and maritime freight rates,
maritime transport and the climate change challenge, as well as supply chain
security are available at:
UNCTAD Trade Logistics Branch
www.unctad.org/ttl/legal
UNCTAD’s annual Review of Maritime Transport and quarterly Transport
Newsletter are available at: www.unctad.org/transportnews
12 TO 15 SEPTEMBER
36