UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
2021
REVIEW
OF MARITIME
TRANSPORT
Geneva, 2021
REVIEW OF MARITIME TRANSPORT 2021
ii
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REVIEW OF MARITIME TRANSPORT 2021
iii
Acknowledgements
The Review of Maritime Transport 2021 was prepared by UNCTAD under the overall guidance of Shamika
N. Sirimanne, Director of the Division on Technology and Logistics of UNCTAD, and under the coordination
of Jan Hoffmann, Head of the Trade Logistics Branch, Division on Technology and Logistics. Regina
Asariotis, Gonzalo Ayala, Mark Assaf, Celine Bacrot, Hassiba Benamara, Dominique Chantrel, Amélie
Cournoyer, Marco Fugazza, Poul Hansen, Jan Hoffmann, Tomasz Kulaga, Anila Premti, Luisa Rodríguez,
Benny Salo, Kamal Tahiri, Hidenobu Tokuda, Pamela Ugaz and Frida Youssef were contributing authors.
The report benetted from reviews and contributions by ofcials from the International Maritime
Organization, the International Labour Organization partners of the TrainForTrade Port Management
Programme and the ve regional commissions of the United Nations (ECA, ECE, ECLAC, ESCAP, and
ESCWA): Julian Abril Garcia, Peter Adams, Mario Apostolov, Yarob Badr, Jan de Boer, Aicha Cherif,
Ismael Cobos Delgado, Yann Duval, Martina Fontanet Solé, Fouad Ghorra, Fredrik Haag, Robert Lisinge,
Dorota Lost-Sieminska, Ricardo Sanchez, Lynn Tan, Lukasz Wyrowski and Brandt Wagner.
Comments and suggestions from the following reviewers are gratefully acknowledged: Hashim Abbas
Syed, Roar Adland, Stefanos Alexopoulos, Jason Angelopoulos, Tracy Chatman, Trevor Crowe, Neil
Davidson, Juan Manuel Díez Orejas, Mahin Faghfouri, Mike Garrat, Nadia Hasham, Joe Hiney, Julian
Hoffmann Anton, Onno Hoffmeister, Roel Janssens, Lars Jensen, Björn Klippel, Eleni Kontou, Juan
Manuel, Antonis Michail, Turloch Mooney, Richard Morton, Plamen Natzkoff, Jean-Paul Rodrigue, Peter
Sand, Torbjorn Rydbergh, Alastair Stevenson, Stelios Stratidakis, Christa Sys, Antonella Teodoro and
Ruosi Zhang. Experts from the International Chamber of Shipping reviewed chapter 2.
Comments received from UNCTAD divisions as part of the internal peer review process, as well as
comments from the Ofce of the Secretary-General, are acknowledged with appreciation.
The Review was edited by Peter Stalker. Administrative, editing, and proofreading support was provided
by Wendy Juan. Magali Studer designed the publication, and Juan Carlos Korol did the formatting.
Special thanks are also due to Vladislav Shuvalov for reviewing the publication in full.
REVIEW OF MARITIME TRANSPORT 2021
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TABLE OF CONTENTS
Acknowledgements .............................................................................................................................iii
Abbreviations
....................................................................................................................................... ix
Note
.....................................................................................................................................................xii
Overview
............................................................................................................................................xiv
1. International maritime trade and port trafc ..............................................1
A. Volumes of international maritime trade and port trafc ...................................................... 3
B. Outlook and longer-term trends ....................................................................................... 19
C. Policy considerations and action areas ............................................................................ 23
2. Maritime transport and infrastructure .......................................................29
A. The world eet ................................................................................................................ 31
B. Shipping companies and operations: adapting maritime transport supply
in an uncertain environment ............................................................................................ 42
C. Port services and infrastructure supply ............................................................................ 46
D. The Impact of COVID-19 on ports: lessons from the UNCTAD TrainForTrade Port
Management Programme ............................................................................................... 49
E. Summary and policy considerations ................................................................................ 54
3. Freight rates, maritime transport costs and their impact on prices ........57
A. Record-breaking container freight rates .......................................................................... 59
B. Dry bulk freight rates also reach highs ............................................................................. 64
C. Tanker freight rates dip to the lowest levels ever ............................................................. 65
D. Economic impact of high container freight rates, particularly in smaller countries ............. 66
E. Structural determinants of maritime transport costs ........................................................ 70
F. Summary and policy considerations ................................................................................ 74
Technical Notes ............................................................................................................... 78
4. Key performance indicators for ports and the shipping eet ..................87
A. Port calls and turnaround times ....................................................................................... 89
B. Liner shipping connectivity .............................................................................................. 93
C. Port cargo handling performance ................................................................................... 99
E. Greenhouse gas emissions by the world eet ................................................................ 105
F. Summary and policy considerations .............................................................................. 106
5. The COVID-19 seafarer crisis .................................................................. 109
A. Seafarers crisis – recent developments ......................................................................... 111
B. Seafarer crisis – implementation of the ILO Maritime Labour Convention, 2006,
as amended (MLC 2006)
............................................................................................... 115
C. Crew changes and key worker status – other relevant international legal instruments .... 117
D. The way forward ........................................................................................................... 119
6. Legal and regulatory developments and the facilitation
of maritime trade
....................................................................................125
A. Technological developments in the maritime industry .................................................... 127
B. Regulatory developments relating to international shipping, climate change
and other environmental issues
..................................................................................... 128
C. Legal and regulatory implications of the COVID-19 pandemic ....................................... 133
D. Other legal and regulatory developments affecting transportation .................................. 133
E. Maritime transport within the WTO Trade Facilitation Agreement .................................. 135
F. FAL Convention ............................................................................................................ 139
G. ASYCUDA ASYHUB case studies ................................................................................ 141
H. Summary and policy considerations .............................................................................. 142
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Tables
1 World eet by principal vessel type, 2020–2021 ................................................................... xvi
2 Five largest seafarer-supplying countries 2021 supplying countries 2021 ............................... xx
1.1 International maritime trade, 1970–2020 ..................................................................................3
1.2 International maritime trade 2019–2020, by type of cargo, country group and region ..............4
1.3 World economic growth, 2019–2021 .......................................................................................6
1.4 Growth in the volume of world merchandise trade, 2019–2021 ...............................................7
1.5 Tanker trade, 2019–2020.......................................................................................................11
1.6 Dry bulk trade 2019–2020 .....................................................................................................12
1.7 Major dry bulk and steel: producers, users, exporters, and importers, 2020 ..........................13
1.8 Containerized trade on East-West trade routes, 2016–2020 ..................................................15
1.9 Containerized trade on major East-West trade routes, 2014–2021 ........................................15
1.10 World container port throughput by region, 2019–2020 .........................................................17
1.11 International maritime trade developments forecasts, 2021–2026 ..........................................19
2.1 World eet by principal vessel type, 2020–2021 ....................................................................31
2.2 Age distribution of world merchant eet by vessel type, 2021
and average age 2020–2021
.................................................................................................32
2.3 Top 25 ship-owning economies, as of 1 January 2021 ..........................................................35
2.4 Ownership of the world eet, ranked by carrying capacity in dead-weight tons, 2021 ............36
2.5 Leading ags of registration by dead-weight tonnage, 2021 ..................................................38
2.6 Leading ags of registration, ranked by value of total tonnage, 2021 (million US dollars)
and principal vessel types
......................................................................................................39
2.7 Deliveries of newbuildings by major vessel types and countries of construction, 2020 ...........39
2.8 Reported tonnage sold for ship recycling by major vessel type
and country of ship recycling, 2020
.......................................................................................41
2.9 Status of uptake of selected technologies in global shipping, as of 14 June 2021 ..................42
2.10 Some proposed IMO measures to reduce greenhouse gas emissions ...................................43
2.11 World eet by fuel type as of 1 January 2021 .........................................................................45
2.12 Industrial port projects capitalizing on green opportunities to generate
new revenue streams.............................................................................................................48
2.13 Factors affecting the development of smart green ports ........................................................49
2.14 Port Performance Scorecard indicators, 2016–2020 .............................................................50
3.1 Contract freight rates, inter-regional, 2018–2020, $ per 40-foot container .............................62
4.1 Time in port, age, and vessel sizes, by vessel type, 2020, world total ....................................90
4.2 Port calls and median time spent in port, container ships, 2020, top 25 countries .................91
4.3 Top 25 ports under the World Bank IHS Markit Container Port Performance Index 2020 .......99
4.4 Minutes per container move, by range of call size, top 25 countries by port calls .................101
4.5 Cargo and vessel handling performance for dry bulk carriers. Top 30 economies
by vessel arrivals, average values for 2018 to rst half of 2021
.............................................103
4.6 Cargo and vessel handling performance for tankers. Top 30 countries
by vessel arrivals, average values for 2018 to rst half of 2021
.............................................104
5.1 Neptune Declaration Crew Change Indicator, July 2021 ......................................................113
5.2 Five largest seafarer-supply countries, 2021 ........................................................................115
6.1 Key performance indicators of the Kenya Trade Information Portal .......................................138
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vi
Figures
1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021
.................................................................... xii
2 Simulated impact of current container freight rate surge on import
and consumer price levels
..................................................................................................... xv
3 Median time in port, number of port calls, and maximum vessel sizes,
by country, container ships, 2020
.........................................................................................xvii
1.1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021
......................................................................5
1.2 Participation of developing countries in international maritime trade, selected years .................5
1.3 International maritime trade, by region, 2020 ...........................................................................5
1.4 International maritime trade by cargo type, selected years .......................................................8
1.5 International maritime trade in cargo ton-miles, 2001–2021 .....................................................9
1.6 World capesize dry bulk trade by exporting region in tons and ton-miles, 2019–2020 ............10
1.7 World ultra-large tanker trade by exporting region in ton and ton-miles , 2018–2020 .............10
1.8 Global containerized trade, 1996–2021 .................................................................................14
1.9 Global containerized trade by route, 2020 .............................................................................14
1.10 World container port throughput by region, 2019–2020 .........................................................18
1.11 Leading 20 global container ports, 2019–2020 ......................................................................18
2.1 Annual growth rate of world eet, dead-weight tonnage, 2000–2020 .....................................31
2.2 Age distribution of the global eet, share of the global carrying capacity, 2012–2021 .............33
2.3 Age distribution of the eet, as at beginning of 2021, per development status groups ...........33
2.4 Share of mega-vessels in the global container ship eet carrying capacity
by TEU, 2011–2021
..............................................................................................................34
2.5 Number of mega-containerships ............................................................................................34
2.6 Mega-vessel distinct journeys through the Panama and Suez canals,
daily averages, from 2012 until 4 June 2021
..........................................................................34
2.7 Live and on-order global eet by ship type .............................................................................37
2.8 Growth of world eet orderbook, 2012–2021, percentage change
in dead-weight tonnage
.........................................................................................................40
2.9 World tonnage on order, selected ship types, 2000–2021 .....................................................41
2.10 Percentage change in cost intensity by ship segment, average size
and median distance travelled
...............................................................................................44
2.11 Cargo and revenue, 2016–2020 ............................................................................................51
2.12 Average revenue mix of ports, 2016–2020 .............................................................................52
3.1 Growth of demand and supply in container shipping, 2007–2021, percentage ......................59
3.2 CCFI composite index, 2011-2021 (quarterly) ........................................................................60
3.3 Shanghai Containerized Freight Index weekly spot rates, 1 July 2011 to 30 July 2021,
selected routes
.....................................................................................................................60
3.4 New ConTex index, July 2011–July 2021 ...............................................................................63
3.5 Baltic Exchange Dry Index, January 2010–July 2021 .............................................................65
3.6 Average weighted earnings all bulkers ($/day), July 2001–July 2021 ......................................65
3.7 Average earnings, all tankers, July 2011–July 2021 ...............................................................66
3.8 Simulated impact of current container freight rate surge on import
and consumer price levels
.....................................................................................................67
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vii
3.9 Simulated impacts of the container freight rate surge on consumer price levels,
by country and by product.....................................................................................................68
3.10 Simulated impacts of container freight rate surges on prices for importers,
consumers and rms, global average
....................................................................................69
3.11 Simulated impact of container freight rate surges on production costs,
by country and size of economy
............................................................................................69
3.12 Simulated dynamic impacts of container freight rate increase on industrial production ...........70
3.13 Transport costs for importing goods by transport mode, world, LDCs,
and LLDCs, 2016, percentage of FOB value
..........................................................................71
3.14 Transport costs heatmap for importing goods, all modes of transport, 2016,
percentage of FOB value
.......................................................................................................71
3.15 Maritime transport costs for importing goods and distances from trading partners ................72
3.16 Maritime transport costs for importing goods, by country and size of economy .....................73
3.17 Impact of structural determinants on maritime transport costs for importing goods ...............73
3.18 Maritime transport costs by direction of the trade imbalance .................................................74
3.19 Impacts of trade imbalance and trade volume on maritime transport costs ............................74
4.1 Port calls per half year, world total, 2018–2020 ......................................................................89
4.2 Port calls per half year, regional totals, 2018–2020 ................................................................89
4.3 Container ship port calls and time in port, 2020 .....................................................................90
4.4 Container ship port calls and maximum ship sizes, 2020 .......................................................91
4.5 Container ship port calls in Africa and time in port, 2020 .......................................................92
4.6 Container ship port calls in Africa and maximum ship sizes, 2020 ..........................................92
4.7 Median time in port, number of port calls, and maximum vessel sizes, per country,
container ships, 2020
............................................................................................................92
4.8 Liner shipping connectivity index, top 10 countries, rst quarter 2006
to second quarter 2021
.........................................................................................................93
4.9 Port Liner Shipping Connectivity Index, top 10 ports as of second quarter 2021,
rst quarter 2006 to second quarter 2021
.............................................................................94
4.10 Liner Shipping Connectivity Index, country and port level, 2020 .............................................95
4.11 Trends in global container ship deployment, rst quarter 2006 to second quarter 2021 .........96
4.12 Trends in vessel sizes and number of companies providing services,
selected countries, rst quarter 2006 to second quarter 2021
...............................................97
4.13 Relationship between maximum vessel sizes, deployed capacity, and the number
of companies, second quarter 2021
......................................................................................98
4.14 Liner Shipping Bilateral Connectivity Index (LSBCI) and its components,
rst quarter 2006 to second quarter 2021
.............................................................................99
4.15 Minutes per container move for container ships, by range of port call size ...........................100
4.16 Time in port (hours) for container ships, by range of port call size ........................................100
4.17 Correlation between time in port (hours) and minutes per container move, all call sizes ........101
4.18 Correlation between time in port (hours) and minutes per container move,
only calls with 1001 to 1500 containers per call
...................................................................101
4.19 Carbon dioxide emissions by vessel type, monthly, million tons, 2011–2021 ........................105
4.20 Carbon dioxide emissions by ag state, annual, 2011–2020, million tons.............................106
REVIEW OF MARITIME TRANSPORT 2021
viii
Boxes
1 Implications of AfCFTA for maritime transport in Africa ...........................................................20
2.1 Divided views on whether oil should be replaced by LNG ......................................................46
2.2 Building port resilience UNCTAD experience ..........................................................................46
2.3 Guidance and standards for intermodal operations ................................................................47
2.4 Port performance analysis of the Port of Gijon in 2020 ...........................................................51
2.5 Port performance analysis of the national port system in Peru in 2020 ...................................52
2.6 Gender and development in the Philippine Ports Authority and its journey .............................53
3.1 Impact of COVID-19 on maritime freight rates in the Arab region ...........................................61
4.1 Port performance in Latin America and the Caribbean – differences between
types of terminals
................................................................................................................102
5.1 The case of the Philippines ..................................................................................................114
6.1 The Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia
and the Pacic - Maritime implications
.................................................................................138
6.2 IMO Compendium on Facilitation and Electronic Business ...................................................139
6.3 Components of the Digitizing Global Maritime Trade project ...............................................141
6.4 Customs formalities concerning entry or exit .......................................................................142
REVIEW OF MARITIME TRANSPORT 2021
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ABBREVIATIONS
AfCFTA African Continental Free Trade Area
AGTC European Agreement on Important International Combined Transport Lines
APEC Asia-Pacic Economic Cooperation
ASYCUDA Automated System for Customs Data
ASYHUB ASYCUDA data integration system
B2B business to business
B2G business to government
BIMCO Baltic and International Maritime Council
CAPEX capital expenditure
CCFI China Containerized Freight Index
CIF cost, insurance and freight
CII Carbon Intensity Indicator
CO
2
carbon dioxide
CPPI Container Port Performance Index
DGMT Digitizing Global Maritime Trade
dwt deadweight tonnage
EBITDA earnings before interest, taxes, depreciation and amortization
ECA Economic Commission for Africa
ECE United Nations Economic Commission for Europe
ECLAC United Nations Economic Commission for Latin America and the Caribbean
EEDI Energy Efciency Design Index
EEXI Energy Efciency Existing Ship Index
ESCAP United Nations Economic Commission for Asia and the Pacic
ESCWA United Nations Economic and Social Commission for Western Asia
eSW electronic single window
eTIR electronic International Road Transport system
EU European Union
FAL Convention Convention Facilitation of International Maritime Trafc
FIATA International Federation of Freight Forwarders Associations
FOB free on board
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G2B government to business
GAD gender and development
GDP Gross domestic product
GT Gigaton
GTCDIT Global Transport Costs Dataset for International Trade
GVC global value chain
HFO heavy fuel oil
ICAO International Civil Aviation Organization
ICS Institute Of Chartered Shipbrokers
IFO intermediate fuel oil
ILO International Labour Organization
IMF International Monetary Fund
IMO International Maritime Organisation
IOM International Organization for Migration
IOPC FUNDS International Oil Pollution Compensation Funds
IRU International Road Transport Union
ISM International Safety Management
ISO International Standards Organization
ISPS International Ship and Port Facility Security
ITF International Transport Workers' Federation
ITS intelligent transport systems
kw kilowatt
LDC least developed country
LLDC landlocked developing country
LNG liquied natural gas
LPG liquied petroleum gas
MARPOL
Convention
International Convention for the Prevention of Pollution from Ships
MASS maritime autonomous surface ship
MDH Maritime Declaration of Health
MDO marine diesel oil
MEPC IMO Marine Environment Protection Committee
MGO marine gasoil
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MLC Maritime Labour Convention
MMT-RDM Multi-Modal Transport Reference Data Model
MNSW maritime national single window
MSC IMO Maritime Safety Committee
MSW maritime single window
NTFC National Trade Facilitation Committee
OECD Organisation for Economic Co-operation and Development
OPEC Organization of the Petroleum Exporting Countries
PCS port community system
PHEIC public health emergency of international concern
PIANC World Association for Waterborne Transport Infrastructure
PPA Philippine Ports Authority
PPPs public-private partnerships
PPS Port Performance Scorecard
R&D research and development
SCFI Shanghai Containerized Freight Index
SID Seafarers’ Identity Document
SIDS small island developing states
STCW Standards of Training, Certication and Watchkeeping for Seafarers
TEU twenty-foot-equivalent unit
TIP Trade Information Portal
UN/CEFACT The United Nations Centre for Trade Facilitation and Electronic Business
UNCITRAL United Nations Commission on International Trade Law
UNCTAD United Nations Conference on Trade and Development
UNDESA UN Department of Economic and Social Affairs
UNFCCC United Nations Framework Convention on Climate Change
UNOHRLLS
United Nations Ofce of the High Representative for the Least Developed
Countries, Landlocked Developing Countries and Small Island
Developing States
VLSFO very low sulphur fuel oil
WCO World Customs Organization
WHO World Health Organization
WIOD World Input-Output Database
WTO World Trade Organization
REVIEW OF MARITIME TRANSPORT 2021
xii
NOTE
The Review of Maritime Transport is a recurrent publication prepared by the UNCTAD secretariat
since 1968 with the aim of fostering the transparency of maritime markets and analysing relevant
developments. Any factual or editorial corrections that may prove necessary, based on comments made
by Governments, will be reected in a corrigendum to be issued subsequently.
This edition of the Review covers data and events from January 2020 until June 2021. Where possible,
every effort has been made to reect more recent developments.
All references to dollars ($) are to United States dollars, unless otherwise stated.
“Ton” means metric ton (1,000 kg) and “mile” means nautical mile, unless otherwise stated.
Because of rounding, details and percentages presented in tables do not necessarily add up to the
totals.
Two dots (..) in a statistical table indicate that data are not available or are not reported separately.
All websites were accessed in September 2021.
The terms “countries” and “economies” refer to countries, territories or areas.
Since 2014, the Review of Maritime Transport does not include printed statistical annexes. UNCTAD
maritime statistics are accessible via the following links:
All datasets: http://stats.unctad.org/maritime
Merchant eet by ag of registration: http://stats.unctad.org/eet
Share of the world merchant eet value by ag of registration: http://stats.unctad.org/vesselvalue_
registration
Merchant eet by country of ownership: http://stats.unctad.org/eetownership
Share of the world merchant eet value by country of benecial ownership: http://stats.unctad.org/
vesselvalue_ownership
Ship recycling by country: http://stats.unctad.org/shiprecycling
Shipbuilding by country in which built: http://stats.unctad.org/shipbuilding
Seafarer supply: http://stats.unctad.org/seafarersupply
Liner shipping connectivity index: http://stats.unctad.org/lsci
Liner shipping bilateral connectivity index: http://stats.unctad.org/lsbci
Container port throughput: http://stats.unctad.org/teu
Port liner shipping connectivity index: http://stats.unctad.org/plsci
Port call performance (Time spent in ports, vessel age and size), annual: http://stats.unctad.org/
portcalls_detail_a
Port call performance (Time spent in ports, vessel age & size), semi-annual: http://stats.unctad.org/
portcalls_detail_sa
Number of port calls, annual: http://stats.unctad.org/portcalls_number_a
Number of port calls, semi-annual: http://stats.unctad.org/portcalls_number_sa
Seaborne trade: http://stats.unctad.org/seabornetrade
National maritime country proles: http://unctadstat.unctad.org/CountryProle/en-GB/index.html
REVIEW OF MARITIME TRANSPORT 2021
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Vessel groupings used in the Review of Maritime Transport
Group Constituent ship types
Oil tankers Oil tankers
Bulk carriers Bulk carriers, combination carriers
General cargo ships Multi-purpose and project vessels, roll-on roll-off cargo ships,
general cargo ships
Container ships Fully cellular container ships
Other ships Liqueed petroleum gas carriers, liqueed natural gas carriers,
parcel (chemical) tankers, specialized tankers, refrigerated container
ships, offshore supply vessels, tugboats, dredgers, cruise, ferries,
other non-cargo ships
Total all ships Includes all the above-mentioned vessel types
Approximate vessel-size groups according to commonly used shipping terminology
Crude oil tankers
Ultralarge crude carrier 320,000 dead-weight tons (dwt) and above
Very large crude carrier 200,000–319,999 dwt
Suezmax crude tanker 125,000–199,999 dwt
Aframax/longe-range 2
crude tanker 85,000–124,999 dwt
Panamax/long-range 1
crude tanker 55,000–84,999 dwt
Medium-range tankers 40,000–54,999 dwt
Short-range/Handy
tankers 25,000–39,000 dwt
Dry bulk and ore carriers
Capesize bulk carrier 100,000 dwt and above
Panamax bulk carrier 65,000–99,999 dwt
Handymax bulk carrier 40,000–64,999 dwt
Handysize bulk carrier 10,000–39,999 dwt
Container ships
Neo-Panamax Container ships that can transit the expanded locks of the Panama
Canal with up to a maximum 49 m beam and 366 m length overall;
eets with a capacity of 12,000–14,999 20-foot equivalent units (TEUs)
include some ships that are too large to transit the expanded locks of
the Panama Canal based on current dimension restrictions.
Panamax Container ships above 3,000 TEUs with a beam below 33.2 m, i.e., the
largest size vessels that can transit the old locks of the Panama Canal.
Post Panamax Fleets with a capacity greater than 15,000 TEUs include some ships
that are able to transit the expanded locks.
Source: Clarksons Research.
Note: Unless otherwise indicated, the ships mentioned in the Review of Maritime Transport include all propelled seagoing
merchant vessels of 100 gross tons and above, excluding inland waterway vessels, shing vessels, military vessels, yachts,
and xed and mobile offshore platforms and barges (with the exception of oating production storage, ofoading units and
drillships).
REVIEW OF MARITIME TRANSPORT 2021
xiv
Maritime transport navigated through the pandemic, but there was an
unprecedented humanitarian crisis for seafarers
While carriers generally managed to mitigate the shock and disruption, port and landside operations
found it more difcult to adjust, and seafarers were in a precarious situation as the pandemic triggered
an unprecedented global crew-change crisis. The health risks and related travel restrictions meant that
hundreds of thousands of seafarers could not return home, while an equivalent number were unable to
join their ships and to provide for their families.
OVERVIEW
Maritime transport deed the COVID-19 disruption. In 2020, volumes fell less
dramatically than expected and by the end of the year had rebounded, laying
the foundations for a transformation in global supply chains and new maritime
trade patterns
The COVID-19 pandemic disrupted maritime transport, though the outcome was less damaging than
initially feared. The shock in the rst half of 2020 caused maritime trade to contract by 3.8 per cent in the
year 2020. But in the second half of the year there was a nascent, if asymmetric, recovery, and by the third
quarter, volumes had returned, for both containerized trade and dry bulk commodities. However, there
has yet to be a full recovery for tanker shipping.
Maritime trade has performed better than expected partly because the COVID-19 pandemic unfolded in
phases and at different speeds, with diverging paths across regions and markets. The rebound in trade
ows was also the result of large stimulus packages, and increased consumer spending on goods, with
a growth in e-commerce, especially in the United States. Later, there was more general optimism in
advanced regions from the rollout of vaccines. But it was also partly due to unlocking pent-up demand for
cars, for example, and to restocking and inventory-building. The rebound was fairly swift because, unlike
the global nancial crisis of 2009, the downturn was not synchronized across the world.
In 2021, in tandem with the recovery in merchandise trade and world output, maritime trade is projected
to increase by 4.3 per cent (gure 1).The medium-term outlook also remains positive, though subject to
mounting risks and uncertainties, and moderated in line with projected lower growth in the world economy.
Over the past two decades, compound annual growth in maritime trade has been 2.9 per cent, but over
the period 2022–2026, UNCTAD expects that rate to slow to 2.4 per cent.
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
20122006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021
GDP Maritime trade Maritime trade-to-GDP ratio Average ratio
Average ratio 2006-2014
Average ratio 2015-2021
Figure 1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021
(percentage annual change and ratio)
Source: UNCTAD calculations, based on the Review of Maritime Transport, various issues, data from UNCTADstat and
table 1.1 of the UNCTAD Trade and Development Report 2021. From recovery to resilience: The development dimension.
REVIEW OF MARITIME TRANSPORT 2021
xv
Hardest hit has been tanker shipping, but the impact has been less for
containerized trade, gas shipments, and dry bulk commodities
Lockdowns, travel restrictions and production cuts have compressed the demand for fuel. In 2020,
shipments of crude oil, rened petroleum products, and gas together fell by 7.7 per cent. The impact
was less, however, for dry bulk commodity trade: supported by strong demand from China for iron ore
and grain, total dry bulk trade fell by only 1.5 per cent. Containerized trade also resisted, falling by only
1.1 per cent. Global container port throughput fell at a roughly similar rate – and in 2020 totalled 815.6
million twenty-foot equivalent units (TEU).
Logistical bottlenecks, and soaring costs, along with an asymmetric
recovery, have heightened uncertainty
Maritime trade weathered the storm in 2020 and the short-term outlook remains positive. However, the
emerging multi-paced recovery is inherently fragile as many countries and regions continue to lag. In
addition to new pandemic risks and the dangers of a two-track vaccination pattern where developing
countries continue to fall behind, other risks are casting a shadow on the recovery. While not all countries
have been able to deploy large stimuli packages and support measures, an untimely ending of the existing
support measures in advanced economies could potentially stie growth and hinder the nascent recovery.
The pandemic’s impacts and legacies are likely to linger and the future shape and contours of the next
normal for the world economy remain uncertain.
The nascent recovery has also been hindered by supply-chain bottlenecks. The rebound in trade,
combined with pandemic-induced restrictions in logistics operations has led to shortages in equipment
and containers, along with less reliable services, congested ports and longer delays and dwell times.
For shipping, on the other hand, soaring freight rates, surcharges and fees have bolstered protability.
Freight rates increased further following the March 2021 closure of the Suez Canal. The grounding of
the 20,150-TEU container ship Ever Given blocked the canal, delaying ships heading for Europe, and
increasing the constraints on ship and port capacity. Some voyages had to be re-routed around the Cape,
adding up to 7,000 miles to the distance.
Whether the recovery lasts will depend critically on the path of the pandemic. Fresh waves of infection,
combined with low vaccination rates, especially in developing countries, have led to new lockdowns
and border closures. A broad-based recovery hinges to a large extent on a worldwide vaccine rollout.
The International Monetary Fund estimates that $50 billion are required to end the pandemic and roll out
vaccines across developing countries. This would bring not just health but also economic benets since
it would be tantamount to a large scale economic stimulus package that could accelerate economic
recovery and by 2025 generate some $9 trillion in additional global output.
Seafarers are increasingly being recognized as “key workers” who are keeping shipping and trade moving,
while also being at the front line of the health crisis. Since seafarers come predominantly from developing
regions, industry and government should move quickly to implement vaccine procurement and distribution
plans.
The longer-term outlook is being reshaped by structural megatrends
that transcend the pandemic and its immediate impact
Eventually, the logistical hurdles caused by large swings in demand could dissipate as global trade
patterns normalize. However, the pandemic has also accelerated megatrends that in the longer-term
could transform the maritime transport landscape.
By exposing the vulnerabilities of existing supply chains, the COVID-19 disruption has sharpened the need
to build resilience. COVID-19 emphasized the importance of ensuring continuity in supply chains and the
need for them to become more resilient, responsive, and agile.
Discussions over the future of globalization have ushered calls to take a fresher look at the conguration of
the extended supply chains to reduce heavy reliance on distant suppliers. Some are arguing that reshoring
and nearshoring will accelerate, resulting in deep reconguration of supply chains. While the structural
trends that had emerged over a decade ago and accelerated during recent trade tensions are likely to
result in changes to globalization patterns and features, an outright end to globalization per se is unlikely.
It may be fairly straightforward to reshore labour-intensive and low-value production, but it is more complex
to move production and switch suppliers for mid-and high-value-added manufacturing. Instead, enterprises
are likely to blend local and global sourcing, modifying their strategies according to product and geography
REVIEW OF MARITIME TRANSPORT 2021
xvi
– with a blend of reshoring, diversication, replication, and regionalization. Nevertheless, for the near future
China is likely to remain a leading manufacturing site. Automation could make reshoring and nearshoring
more economically viable in the longer term. Hybrid operating models involving just-in-time (i.e., material
moved just before its use in the manufacturing process) and just-in-case (i.e., where companies keep
large inventories to minimize stocks being sold out) supply chain models are likely to emerge. Combined,
these trends will change distances and routes, increasing the need for more exible shipping services.
They also entail implications for vessel types and sizes, ports of call, and distance travelled.
The pandemic has accelerated pre-existing digitalisation and environmental sustainability trends.
Technological advances have enabled shipping and ports to continue operations while minimizing
interaction and physical contact. New technologies have also stimulated the rise of online commerce
which has transformed consumer shopping habits and spending patterns. The growth in online trade
has increased the demand for distribution facilities and warehousing that are digitally enabled and offer
value-added services. All these developments are expected to generate new business opportunities for
shipping and ports as well as for other players in the maritime supply chain.
Technology will also be critical for advancing environmental sustainability. While designing their stimulus
packages and post-pandemic plans, many governments aim to harness the synergies between technology,
environmental protection, efciency, and resilience. Businesses and governments recognize that adapting
to the post-pandemic world and building back better requires adding economic, social and environmental
value and creating new business opportunities, not least for maritime transport.
Supply not keeping pace with demand
In 2020, the global commercial shipping eet grew by 3 per cent, reaching 99,800 ships
of 100 gross tons and above. By January 2021, capacity was equivalent to 2,13 billion
dead weight tons (dwt) (table 1). During 2020, delivery of ships declined by 12 per cent,
partly due to lockdown-induced labour shortages that disrupted marine-industrial activity.
The ships delivered were mostly bulk carriers, followed by oil tankers and container ships. As owners and
operators tried to cope with tight vessel supply, they were also buying more second-hand ships with a
resulting increase in prices. Recycling rates also increased in 2020, although compared to previous years,
the levels remain low.
During 2020, orders for new ships had declined by 16 per cent, continuing a downward trend observed in
previous years. In early 2021, however, shipping companies reacted to the capacity constraints with a surge
of new orders, especially for container ships for which orders were the highest for the last two decades.
There were also more orders for LNG carriers.
Table 1 World eet by principal vessel type, 2020–2021
(thousand dead-weight tons and percentage)
Principal types 2020 2021 Percentage change
2021 over 2020
Bulk carriers 879 725
42.47%
913 032
42.77% 3.79%
Oil tankers 601 342
29.03%
619 148
29.00% 2.96%
Container ships 274 973
13.27%
281 784
13.20% 2.48%
Other types of ships: 238 705
11.52%
243 922
11.43% 2.19%
Offshore supply 84 049
4.06%
84 094
3.94% 0.05%
Gas carriers 73 685
3.56%
77 455
3.63% 5.12%
Chemical tankers 47 480
2.29%
48 858
2.29% 2.90%
Other/not available 25 500
1.23%
25 407
1.19% -0.36%
Ferries and passenger ships 7 992
0.39%
8 109
0.38% 1.46%
General cargo ships 76 893
3.71%
76 754
3.60% -0.18%
World total 2 071 638 2 134 640 3.04%
Source: UNCTAD calculations, based on data from Clarksons Research.
Note: Propelled seagoing merchant vessels of 100 tons and above; beginning-of-year gures.
REVIEW OF MARITIME TRANSPORT 2021
xvii
0
5
10
15
20
25
30
8.7
LDC
3.2
LLDC
24.2
SIDS
10.6
World
(%)
0
1
2
3
4
5
6
7
8
2.2
LDC
0.6
LLDC
7.5
SIDS
1.5
World
(%)
Import price increases Consumer price increases
Figure 2 Simulated impact of current container freight rate surge on import and consumer
price levels
Sources: Based on data provided by Clarksons Research, Shipping Intelligence Network, the International Monetary Fund,
International Financial Statistics and Direction of Trade Statistics, UNCTADstat, and the World Bank, World Integrated Trade
Solution and Commodity Price Data (The Pink Sheet).
Note: The impact of container freight rate surges on prices is assessed based on a 243 per cent increase in the China
Containerized Freight Composite Index between August 2020 and August 2021. The simulation model assumes that freight
rates in August 2021 will be sustained over the remaining simulation period (September 2021 to December 2023) and all other
factors are held constant over the entire simulation period (August 2020 to December 2023).
During the second half of 2020, and into 2021, world trade gradually recovered but supply was less
elastic and constrained by COVID-19 related delays and congestion – leading to a signicant increase in
container freight rates.
The future demand/supply balance will also be impacted by regulatory requirements to align shipping
operations with decarbonization targets. Introduced under the auspices of the International Maritime
Organization (IMO), these new regulations will require replacing some of the existing eet so will entail
signicant costs. As well as creating a degree of uncertainty, this could reduce the capital available to
expand the eet to cater for trade growth.
Cost pressure and soaring rates and surcharges would weigh on smaller
players and prices
Since the second half of 2020 there has been an increase in freight rates. While demand for containerized
goods has been higher than expected, shipping capacity has been constrained by logistical hurdles and
bottlenecks and shortages in container shipping equipment. Unreliable schedules, and port congestion
have also led to a surge in surcharges and fees, including demurrage and detention fees.
These soaring costs are a challenge for all traders and supply chain managers, but especially for smaller
shippers who, compared with the larger players, may be less able to absorb the additional expense and
are at a disadvantage when negotiating rates and booking space on ships. Smaller shippers and low-value
paying cargo may thus nd it difcult to secure service contracts and could see their margins eroded.
Freight rates are expected to remain high. Demand is strong and there is growing uncertainty on the supply
side, with concerns about the efciency of transport systems and port operations. In the face of these cost
pressures and lasting market disruption, it is increasingly important to monitor market behaviour and ensure
transparency when it comes to setting rates, fees, and surcharges. There have been calls for governments to
intervene, and for regulators to apply closer oversight and address unfair market practices.
If sustained, the current surge in container freight rates, will signicantly increase both import and consumer
prices. UNCTAD’s simulation model suggests that global import price levels will increase on average by
11 percent as a result of the freight rate increases (gure 2). Hardest hit will be the small island developing
states (SIDS) who depend for their merchandise imports primarily on maritime transport and who are simulated
to face a cumulative increase of 24 per cent with a time lag of about a year.
Higher container freight rates will also have a sizeable impact on consumer prices. If container freight
rates remain at their current high levels, then in 2023 global consumer prices are projected to be 1.5 per
cent higher than they would have been without the freight rate surge. The impact is expected to be more
signicant for smaller economies that depend heavily on imported goods for much of their consumption
needs. In SIDS, the cumulative increase in consumer prices is expected to be 7.5 per cent and in the
Least Developed Countries (LDCs) 2.2 per cent.
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xviii
Some goods will be affected more than others by the surge in container freight rates. Most exposed are
goods manufactured through integrated supply chains. Globalized production processes entail a greater
use of shipping, with intermediate goods often crossing borders multiple times within and between
regions. This is the case, for example, for East Asian goods destined for major markets in North America
and Europe. For computers, and electronic and optical products, for example, the consumer price uplift
induced by the current freight rate surge could be 11 per cent.
Higher shipping costs will also affect some low-value-added products: for furniture, for example, and
textiles, garments and leather products, the consumer price uplifts could be ten per cent. These increases
could erode the competitive advantages of smaller economies that produce many of these goods. At the
same time, these countries will nd it more difcult to import the high-technology machinery and industrial
materials they need to move up the value chain, diversify their economies and achieve the Sustainable
Development Goals (SDGs).
Even in major economies, lingering high container freight rates and disruption in maritime transport in the
short- to medium-term threaten to undermine recovery. UNCTAD’s analysis concludes that in the United
States and the euro area, for example, a 10 per cent increase in container freight rates could lead to a
cumulative contraction in industrial production of around 1 per cent.
Structural factors keep maritime transport costs higher in developing
regions
The current historical highs in freight rates are largely driven by pandemic-induced shocks and unexpected
upward swings in shipping demand. But in the longer term, shipping and port prices are driven by structural
factors such as port infrastructure, economies of scale, trade imbalances, trade facilitation, and shipping
connectivity – all of which have lasting impacts on maritime transport costs and trade competitiveness. An
analysis based on a new UNCTAD-World Bank transport costs dataset, shows that signicant structural
improvements could reduce maritime transport costs by around four per cent. Interventions and policies
that address the structural determinants of maritime transport costs can thus help mitigate the impacts
from cyclical factors and disruptions.
Other structural issues that will increase prices include the new regulations on decarbonizing shipping.
The recently adopted IMO short-term measure on greenhouse gas reduction is expected to reduce
average shipping speeds and increase maritime transport costs, especially for developing countries, and
in particular the SIDS.
COVID-19 slows operations for ships and ports
In the rst half of 2020, reecting the slump in shipping demand, cargo-carrying ships made fewer port
calls. The number of calls subsequently increased, particularly in Europe, East Asia, and South-Eastern
Asia, albeit not yet to pre-pandemic levels.
In 2020, terminal operators, authorities, and intermodal transport providers took measures to contain
COVID-19 and, as a result, ships had to spend more time in ports that were operating more slowly. The
greatest delays were for dry break bulk carriers for which cargo operations tend to be less automated and
more labour-intensive so were slowed by measures to reduce social contact.
Turnaround times can differ signicantly between countries (gure 3). One group of countries with faster
turnarounds comprises those with fewer arrivals and only small ships and with only few containers loaded
and unloaded during each port call. These include Dominica, Saint Kitts and Nevis, and Saint Vincent
and the Grenadines. Another group with fast turnarounds comprises those that have the latest port
technologies and infrastructure and can accommodate the largest container vessels; they benet from
economies of scale and thus tend to attract the highest number of port calls. These include Japan, Hong
Kong China, and Taiwan Province of China. Efcient ports initiate a positive feed-back loop: high efciency
makes their ports attractive as ports of call, further boosting the number of arrivals. Countries in the middle
of the distribution report a wide range of median port waiting times, reecting differences in efciency and
other variables such as vessel age and cargo throughput.
Shipping and port performance is generally lower in developing countries. They have higher transport
costs and lower connectivity because they are often further away from their overseas markets and are
hampered by diseconomies of scale and lower levels of digitalization.
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Figure 3 Median time in port, number of port calls, and maximum vessel sizes, by country,
container ships, 2020
0.50 day
1 day
2 days
4 days
8 days
100 1 000 10 000 100 000
Port calls
Median time in port
Maximum vessel
size (TEU)
1 000
5 000
10 000
15 000
20 000
Source: UNCTAD, based on data provided by MarineTrafc. Both axes in logarithmic scale.
Note: Ships of 1,000 GT and above. For the complete table of countries, see http://stats.unctad.org/maritime.
Positive trends in port governance and gender participation
Each year, UNCTAD uses data from its TrainForTrade Port Management Programme to benchmark
countries against each other using the Port Performance Scorecard (PPS). Many other port performance
projects focus on service provision such as cargo handling, but the PPS, which uses data for 26 indicators,
enables comparisons between entire port entities, providing data that is valuable for strategic planning
within ports and for evidence-based policy analysis at regional and state levels.
Member ports’ annual throughput in 2020 ranged from 1.5 million to 80.9 million tonnes. Around half of
were in the smallest category, less than 5 million tonnes, and the medium category, 5 million to 10 million
tonnes, a range of volumes that was similar across all regions.
Since 2015, one of the six main categories in the PPS scorecard has been the rate of female participation
in the port workforce. In 2019 and 2020, this remained low, at around 18 per cent. The rate was
signicantly higher in Europe at 25 per cent, though even here roles are not equally distributed between
men and women. Women tend to be better represented in management and administrative roles, for
which between 2019 and 2020 the proportion of women increased from 38 to 42 per cent. In this case,
Asian members were above average at 52 per cent compared with those in Europe at 39 per cent.
Women are far less likely to be working in cargo handling port operations. These results highlight the need
for strategic policy interventions to deliver on Sustainable Development Goal 5 to “Achieve gender equality
and empower all women and girls.”
Port and shipping performance depend on trade and transport
facilitation
Efcient maritime transport depends on effective trade and transport facilitation that reduces the time and
cost of customs and other trade procedures and integrate new technologies for administrative formalities.
Boosts the performance of the entire supply chain with positive effects on maritime transport.
The need for cross-border trade facilitation was highlighted by the COVID-19 pandemic, particularly for
trade in medical equipment, drugs and emergency goods such as vaccines and personal protection
equipment (PPE) – which could be held up at ports by red tape or by slow clearance procedures to
comply with regulatory requirements.
In recent years, the introduction of new technology in administrative processes has boosted efciency
along the logistics supply chain. This has involved digitalization and automation of customs processes,
REVIEW OF MARITIME TRANSPORT 2021
xx
paperless formalities, and the introduction of single-window services – the impetus for which was boosted
during the COVID-19 pandemic.
An example of the use of ICT, is UNCTAD’s Automated System for Customs Data (ASYCUDA) which
involves automation and digitalization in supply chains. A recent development, the ASYHUB solution,
smooths data transfer between ports of departure and arrival – using risk management concepts to help
speed up clearance procedures and avoid goods being stuck in ports unnecessarily.
Another ICT innovation based on UNCTAD technology is the Trade Information Portal (TIP) – a website
in each country that provides traders with easy access to information about trade regulations and
procedures. The UNCTAD TIP offers importers and exporters online, step-by-step guides to trade-related
procedures and also helps the country full its obligations arising from the World Trade Organization Trade
Facilitation Agreement. Today, 29 TIPs, based on UNCTAD technology, are being implemented globally
by UNCTAD and the International Trade Centre. Results have been very positive. TIPs are most advanced
in East Africa, where in Kenya, for example, greater transparency and simplication of a total of 52 trade
procedures so far have reduced the time spent waiting in the queue, at the counter and in between steps
by 110 hours, and the administrative fees for these 52 procedures by $482, i.e., about $11 per trade
procedure on average.
Digitalization allows a paperless environment whereby trade procedures are all carried out online. For the
traders this reduces time and cost and increases transparency and market access, while also reducing
physical contact and the risks of contagion. In addition, smart digital solutions improve public administration
of trade and boost efciency in export, import and transit operations. Moreover, by minimizing the use of
paper, trade facilitation can also help mitigate climate change.
Reforms in trade facilitation have been promoted by the multilateral trading system, particularly through
the WTO Facilitation Agreement and the IMO Convention on Facilitation of International Maritime Trafc.
These agreements provide common standards and regulations that have proved especially valuable
during the COVID-19 pandemic. By providing governments with guidance and incentives for reforming
trade facilitation, they have paved the way for further digitalization and enhanced transparency, and
for rationalizing administrative formalities. These developments also promote robust public-private
partnerships (PPPs), such as the National Trade Facilitation Committees and Port Community Systems
that involve the business community in port operations. Efcient maritime trade and transport will depend
on aligning and streamlining the mandates and work of the various PPPs.
A continuing crisis for seafarers stranded at sea
Globally there around 1.9 million seafarers working to facilitate the way we live. The BIMCO/ICS Seafarer
Workforce Report 2021 estimated the global supply of seafarers at 1,892,720, up from 1,647,494 in 2015. Of
these, 857,540 were ofcers, and 1,035,180 were ratings – the skilled seafarers who carry out support work.
The ve largest seafarer-supplying countries were the Philippines, the Russian Federation, Indonesia, China,
and India, representing 44 per cent of the global workforce (table 2).
Table 2 Five largest seafarer-supplying countries 2021 supplying countries 2021
All Seafarers Ofcers Ratings
1 Philippines Philippines Philippines
2 Russian Federation Russian Federation Russian Federation
3 Indonesia China Indonesia
4 China India China
5 India Indonesia India
Source: ISF and BIMCO, Seafarer Workforce Report 2021, London, 2021.
For the supplying countries seafarers are important sources of income. In 2019, the Philippines, for
example, earned $30.1 billion from its overseas workers – 9.3 per cent of GDP and 7.3 per cent of gross
national income (GNI) – of which $6.5 billion came from its seafarers. In 2020 total remittances fell 0.8 per
cent to $29.9 billion, with those from seafarers falling 2.8 per cent to $6.4 billion.
During the COVID-19 pandemic, seafarers continued to demonstrate great professionalism and dedication,
supporting the delivery of food, medical supplies, fuel, and other essential goods, and helping keep supply
chains active and global commerce running.
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However, hundreds of thousands of seafarers remain stranded at sea. Each month, crews need to be
changed over – to prevent fatigue and comply with international maritime regulations for safety, health
and welfare. Responding to COVID-19, governments closed many borders and imposed lockdowns and
prohibited people from disembarking thus temporarily suspending crew changes. As a consequence,
large numbers of seafarers have been unable to be replaced or repatriated after long tours of duty and had
to extend their service on board. Even over a year into the pandemic, due to these restrictions, and the
shortage of international ights, according to latest estimates by the International Chamber of Shipping,
around 250,000 seafarers remain stranded, far beyond the expiration of their contracts. Yet, there is still
no global consensus on uniform measures to allow for efcient crew changes and transfer.
During the pandemic, stakeholders, including international bodies, governments, and industry, have
issued recommendations and guidance – aiming to ensure that seafarers are healthy and protected
from COVID-19, have access to medical care, and are recognized as key workers and are vaccinated
as a matter of priority, and also that ships and port facilities meet international sanitary requirements.
Nevertheless, as the pandemic continues for a second year, seafarers remain very vulnerable.
With some notable exceptions, only a small proportion of the world’s seafarers have been vaccinated.
Belgium has demonstrated best practice, and July 2021 started a vaccination campaign for all seafarers
arriving in a Belgian port, regardless of nationality.
To address seafarers’ issues there has been a continuous level of cooperation among international
organizations and industry bodies, including IMO, ILO, WHO, UNCTAD, ICS, and ITF, which have repeatedly
expressed concern about the humanitarian crisis in the maritime shipping sector and urged Member
States to designate seafarers and other marine personnel as key workers, accept seafarers’ identity
documents as evidence of their key worker status, and allow exibility for ship owners and managers to
divert ships to ports where crew change is possible without imposing penalties.
On 1 December 2020, the UN General Assembly unanimously adopted a resolution: International
cooperation to address challenges faced by seafarers as a result of the COVID-19 pandemic to support
global supply chains (A/RES/75/17). This urges Member States to designate seafarers and other
marine personnel as key workers and encourages governments and other stakeholders to implement
the “Industry Recommended Framework of Protocols for ensuring safe ship crew changes and travel
during the Coronavirus (COVID-19) pandemic”. It also calls upon governments to facilitate maritime crew
changes – for example, by enabling them to embark and disembark, expediting travel and repatriation
efforts, and ensuring access to medical care. The resolution also requests IMO, ILO and UNCTAD to
inform the General Assembly at its 76
th
session on issues related to the resolution.
This follows earlier resolutions from other bodies. On 21 September 2020 the IMO’s Maritime Safety
Committee recommended action to facilitate ship crew change, access to medical care, and seafarer
travel during the COVID-19 pandemic. According to IMO, as of the end of June 2021, 60 Member
States and two Associate Members had signed on to designate seafarers as key workers. Similarly, on
8 December 2020 the Governing Body of the ILO, adopted the “Resolution concerning maritime labour
issues and the COVID-19 pandemic”.
In January 2021, the shipping industry issued the Neptune Declaration on Seafarer Wellbeing and Crew
Change, which by June 2021 had been signed by more than 600 companies and organizations. They
have also produced a Neptune Declaration Crew Change indicator which aggregates data from 10
leading ship managers which collectively have about 90,000 seafarers currently on board. This reported
that between June and July 2021 the situation appeared to be worsening, with more seafarers on
vessels beyond the expiry of their contract and more who had been on board for over 11 months – the
maximum length of time envisaged in the 2006 Maritime Labour Convention (MLC). Since the launch of
the indicator in May 2021, the proportion of seafarers on vessels beyond the expiry of their contract had
risen from 5.8 to 8.8 per cent while the proportion on board for over 11 months had increased from 0.4 to
1.0 per cent.
Advances in international law and technology
The COVID-19 pandemic has interfered with international trade, creating inefciencies, delays and
supply-chain disruptions on an unprecedented scale – which also have legal consequences if contractual
performance is disrupted, delayed, or becomes impossible. For shipping this can lead to litigation that
raises complex international jurisdictional issues. Government and industry will need to work together
to address the related contractual rights and obligations, and arrive at standard contractual clauses for
commercial risk-allocation.
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Many of the problems are associated with delays in documentation – which should encourage more
commercial parties to adopt secure electronic solutions. Updated industry guidelines adopted recently,
offer useful guidance to shipowners and operators on procedures and actions to maintain the security
of IT systems in their companies and onboard ships, adopting a cyber-risk management approach, and
taking account of the IMO requirements, and other relevant guidelines.
Technological innovation is also raising the prospect of automated crewless vessels. The industry is
conducting trials on “maritime autonomous surface ships” (MASS). The aim is to ensure safe, secure and
environmentally sustainable shipping with the relevant legal framework. In May 2021, the IMO Maritime
Safety Committee completed a regulatory scoping exercise for the use of MASS which highlighted some
priority issues. The outcome could be a MASS instrument/code, with goals, functional requirements and
corresponding regulations, suitable for different degrees of autonomy.
On the path to a 3°C temperature rise
The shipping industry has an important part to play in combatting climate change. The Paris Agreement
aimed to reduce global warming to well below 2°C and pursue 1.5°C. But, despite a brief dip in carbon
dioxide emissions caused by the COVID-19 pandemic, the world is still heading for a temperature rise in
excess of 3°C this century. Urgent action is needed on both mitigation and adaptation.
At the regulatory level, the shipping industry is addressing climate issues through the 1973/1978
International Convention for the Prevention of Pollution from Ships (MARPOL). In June 2021, the IMO
adopted amendments to Annex VI of the Convention, which introduced new mandatory regulations to
further reduce greenhouse gas emissions from shipping, and require owners to set energy efciency targets.
There were also initial discussions on the mid- and long-term action needed, including market-based
measures, along with an industry-led proposal for an International Maritime Research and Development
Board a non-governmental body which would be nanced by a levy on marine fuel and would support
research, development, and the deployment of zero-carbon technologies.
Climate change, with the prospect of accelerating sea-level rise and more extreme weather events,
will also have major implications for the world’s seaports. Securing global maritime transport and trade
will therefore mean investing in adaptation and building resilience- for seaports and other key transport
infrastructure, especially in developing countries.
Broad-based global recovery will depend on smart, resilient and
sustainable maritime transport
The COVID-19 pandemic triggered a succession of shocks and waves, each setting off their own spinoff
events. The extent and impact of disruption varied considerably, however, between regions, economic
sectors, and segments of the shipping market. The recovery is similarly proving uneven, with differences
in the levels and scale of policy support and unequal access to vaccines.
Although the initial impact on maritime transport was less dramatic than predicted, the outlook is shadier.
The timescale for a lasting recovery will depend on the progress of the pandemic, the extent and timing of
world vaccination plans, and the duration of policy support measures. At present the nascent recovery is
being threatened by supply-chain breaks and logistical bottlenecks that are disrupting shipping markets
and pushing cost levels to historic highs.
The COVID-19 disruption has also accelerated pre-existing megatrends – geopolitical, technological, and
environmental. These trends have been unfolding slowly over the past decade but have accelerated
during the pandemic and continue to transform maritime transport and trade:
Geopolitics – The COVID-19 health crisis underscored the extent to which nations are economically and socially
interdependent – integrated through global supply chains and their underlying extended maritime transport networks.
In the face of heightened geopolitical risks and rising trade tensions, many countries and enterprises are shifting their
mindsets and now perceive global interdependency partly as a vulnerability. To mitigate risks and build resilience –
they are therefore aiming to reduce their reliance on distant foreign suppliers.
Resilience – The COVID-19 disruption has tested supply chains and their underlying business models, and put
transport and logistics networks under strain. Enterprises and governments are aiming to make supply chains more
robust and resilient, including by looking to diversify their business partners and suppliers. This will involve a new
balance between local, regional and global production. They are also reconsidering inventory and stock management
strategies and the trade-offs between just-in-time and just-in-case supply chain models.
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xxiii
Technology – Customs ofcials, port workers, and transport operators increasingly recognize the value of new
technologies and digitalization, not just as a way of boosting efciency but also for maintaining business continuity
at times of disruption. Technological innovations include advanced analytics, on-board sensors, communications
technology, port-call optimization, blockchains, big data, and autonomous ships and vehicles. During the pandemic,
these technologies have helped reduce physical contact, and keep ships moving, ports open and cross-border trade
owing. Technological advances have also stimulated consumer spending online and a growth in e-commerce. These
trends will continue to redene production and consumption patterns and the ways in which ships, ports and their
hinterland connections deliver cargo and services.
Shipping market dynamics – In anticipation of future disruptions, carriers, shippers, ports, and inland transport
operators will be rethinking their business and operating models to respond more exibly to changing market
conditions. Having seen the way in which the trade rebound stumbled against logistical bottlenecks and constrained
capacity following the COVID-19 shock, they are likely to reconsider their levels of investment in shipping and ports as
well as their planning operations. They can also anticipate potential greater regulation of shipping markets as national
competition authorities step up their monitoring of freight rates and market behaviour and scrutinize rapid movements
in shipping prices.
Decarbonization and the energy transition – Maritime transport is facing growing pressure to decarbonize and
operate in a more sustainable way – issues that have also come to the fore as part of the post-pandemic recovery.
With ongoing IMO work on greenhouse gas emission reduction in shipping providing further momentum, shipping
is expected to change its fuel mix and use new technology and ship designs, alternative fuels and operational
adjustments to cut its carbon and environmental footprint. For energy, shipping is not just a large-scale user but also
a major carrier, so the industry will have to respond to lower demand for oil tankers and coal carriers and more for
ships transporting hydrogen, ammonia and other alternative fuels.
Climate adaptation and resilience – Maritime transport infrastructure and services came under severe stress
as a result of the pandemic and the closure of the Suez Canal. This was in addition to the ongoing dangers of
climate change: over recent years extreme weather events, including oods, hurricanes and cyclones, have been
causing frequent and intense disruptions for both coastal infrastructure and hinterland connections. With current
climate projections pointing to a global warming trajectory exceeding the agreed targets under the Paris Agreement,
the maritime industry and governments need to invest in adaptation and in climate-proong maritime transport
infrastructure and services, as well as accelerate the development of related legal, policy and technical measures,
and capacity-building.
REVIEW OF MARITIME TRANSPORT 2021
xxiv
Priorities for action
1. Vaccinate the world – To complete broad-based global vaccination, developing countries should
have fair access to vaccines. Investing in global vaccination, with the support of dedicated funds, will
not just accelerate the end of the pandemic but also stimulate the recovery and add trillions to global
economic output.
2. Revitalize the multilateral trade system – Decades of trade liberalization and multilateral action
have brought economic and social benets that are now under threat from increasing trade restrictions
and protectionism. To retain these hard-won gains countries will need to defend and consolidate the
multilateral trade system and minimize trade restrictiveness.
3. End the crew-change crisis – This requires urgent attention from ag, port and labour-supplying
states, in collaboration with relevant international organizations. All states should be parties to the relevant
international legal instruments, including the MLC 2006, ILO Conventions Nos. 108 and 185 on Seafarers’
Identity Documents, and the IMO FAL Convention. To advance the objectives of SDG 8, and to ensure
decent work for seafarers, states also need to redouble their efforts to ensure that these conventions and
labour standards are fully implemented.
4. Vaccinate seafarers – Concerted collaborative efforts by industry, governments and international
organizations should ensure that seafarers are designated as key workers and are vaccinated as a matter
of priority.
5. Facilitate crew changes – Governments and industry should continue to work together, including
through the Neptune Declaration initiative, and in collaboration with relevant international organizations,
to facilitate crew changes, in accordance with international standards and in line with public health
considerations. They should also ensure the availability and access to related seafarer data.
6. Ensure reliable and efcient maritime transport – Stakeholders in the maritime supply chain,
including carriers, ports, inland transport providers and shippers, should work together to ensure that
maritime transport remains a reliable, predictable and efcient mode of transport. This will require investing
in shipping and ports and their hinterland connections while devising and implementing sustainable freight
transport solutions. It will also require proper implementation of trade facilitation measures and digital tools
and technologies.
7. Mainstream supply chain resilience, risk assessment and preparedness – This can be achieved
through a portfolio of measures, including dual sourcing, redundancy across suppliers, and backing up
production sites, inventory, and stocks, along with better risk management, and end-to-end transparency.
Typically, this will involve assessing and managing risks, enhancing preparedness and adopting hybrid
solutions that are exible and agile, and arrive at balanced trade-offs, for example, between nearshoring
and reshoring and combining hybrid supply chain models, along with measures to reduce vulnerabilities
to cyberattacks.
8. Control costs – Freight costs can be contained by expanding capacity to match demand, making
ports more efcient, improving planning, forecasting and visibility, and implementing trade facilitation
measures. The maritime transport market should also be transparent, fair and competitive. National
competition authorities therefore need the capacity to monitor trends in freight rates, fees and charges.
Stakeholders along the maritime supply chain including carriers, ports, inland transport providers,
customs, and shippers should work together to share information and make maritime transport more
efcient.
9. Decarbonize – The shipping industry, in cooperation with governments, will need to explore
alternative fuels, invest in landside infrastructure and replace older vessels with larger and more
fuel-efcient ships. This will require a predictable environment at the global level but in addition,
structurally weak developing countries will need help to mitigate transition costs and the lower
connectivity that could result from decarbonizing maritime transport. Developing countries will also
need to gain a better understanding of how new regulations will affect the maritime transport services.
Integrated post-pandemic recovery planning and stimulus packages should earmark resources for
environmental sustainability, aiming for green, low-carbon maritime transport.
10. Climate-proof maritime transport – Countries should anticipate, prepare for and adapt to
climate change by fully understanding the risks, exposure, and vulnerabilities, and by building adaptive
capacity across the maritime supply chain. For developing countries, including the most vulnerable
groups of countries, building back better after the pandemic will mean scaling up investment and
building national capacities in climate-proong.
1
In 2020, international maritime trade and global supply
chains were hit by the impact of the COVID-19 pandemic.
Overall however, maritime transport managed to navigate
through the crisis, and for some parts of the supply chain
the impact was not as dramatic as initially feared. Carriers
were able to mitigate the early shock and manage lower
levels of demand. Port and landside operations, however,
struggled to adjust, and the world’s seafarers faced
a precarious situation as they became caught up in an
unprecedented global crew-change crisis.
In 2020, global economic output fell by 3.5 per cent and
merchandise trade by 5.4 per cent, while international
maritime shipments fell by 3.8 per cent, to 10.65 billion tons.
However, UNCTAD expects world maritime trade to recover by
4.3 per cent in 2021, and growth is projected to continue over
the 2022–2026 period, albeit at rates that will be moderated
by the easing in world economic output. Although the
short-term outlook is positive, the medium- and longer-term
prospects remain uncertain: the upturn will be directed by the
future path of the pandemic and the associated lockdowns
and restrictions. A lasting recovery also hinges on keeping
trade owing, by creating supportive macroeconomic and
scal conditions while minimizing trade protectionism.
Throughout 2021, much of the global economic revival will
be driven by government spending in major economies, so
the patterns and geography of the recovery will be shaped
by the ways in which their governments wind up these
support measures – in terms of scale, focus, and timing.
Progress could, however, still be derailed by further outbreaks
of the pandemic, by slow vaccine deployment and in many
economies by the limited scope for policy support. It has
become clear that broad-based recovery will require an end
to the health crisis and an equitable distribution of vaccines
across all regions, developed and developing.
Starting in late 2020, a swift rebound in containerized trade
stumbled against supply-side constraints – which increased
costs, dented reliability of service, and undermined the operation
of value chains. As global demand patterns normalize, these
problems are likely to dissipate, but the longer- term outlook
will continue to be shaped by wide-ranging and longer-term
structural factors, including patterns of globalization, changes
in consumption habits, digitalization and the growth of
ecommerce, as well as by the global energy transition and the
imperative of environmental sustainability.
The impact of COVID-19 has also highlighted the need for
better risk management, and greater preparedness, and
resilience. The disruption was amplied by other events
that created transport bottlenecks – in some countries by
ooding, for example, and especially by the blocking of the
Suez Canal, which exposed risks and vulnerabilities in supply
chains. Building future resilience will entail reforming business
models and global supply chains, and reorganizing maritime
transport networks.
This chapter considers developments in maritime transport
and trade during 2020 until mid-2021. Section A reviews the
situation of international maritime trade and container port
trafc. Section B sets out the outlook for global recovery and
its sustainability. Section C puts forward some key policy
considerations and action areas.
International maritime
trade and port traffic
INTERNATIONAL SEABORNE TRADE
IN 2020
following on a weak
pre-pandemic growth
of 0.5% in 2019
1980
1990
2000
2010
2020
loaded
discharged
Developing countries continue to account for the lion's
share of world maritime trade by volume
WORLD CONTAINER PORT TRAFFIC
IN 2020
Maritime trade
and port cargo
trafc
Total volumes reachedGrowth slipped by
-3.8% 10.7 billion tons
OUTLOOK
Supply chain
disruption
Transport
costs
Change in
globalization patterns
Congestion
in ports
Covid-19
pandemic
Volumes estimated atDown by
-1.2% 815.6 million TEUs
70%
60%
World maritime trade, percentage share per region
Americas
Oceania
Europe
Africa
2020 and 2021 exposed
ports' vulnerability to
disruptions and risks
World container port trafc by region, 2019-2020
(percentage annual change)
Asia
-0.4
Africa
0.0
Latin America
and the Caribbean
-1.8
Europe
-4.2
North America
-1.9
Oceania
-0.8
Asia
54
6
8
15
18
Growth in maritime trade
volumes expected to
moderate and
expand at an
annual rate of
Short-term outlook for maritime trade is positive,
however, risks are manifold and uncertainty remains
Uncertainty
UNCTAD expects world
maritime trade to recover
by
+4.3% in 2021
+2.4%
between 2022 and 2026
1. International maritime trade and port trafc
3
A. VOLUMES OF INTERNATIONAL MARITIME TRADE AND PORT TRAFFIC
The demand for maritime transport services and infrastructure can be assessed through key
indicators on trade and port cargo handling. Over the review period, these followed a rollercoaster
ride: in early 2020 demand tanked as a result of the pandemic but then bounced back in the
second half.
1. International maritime trade fell in 2020 as the pandemic sequentially
disrupted supply, demand, and logistics
In 2020, the pandemic disrupted the world economy, cutting manufacturing activity and consumption
– with impacts on supply, demand and logistics. International maritime trade growth had already been
weak in 2019 at 0.5 per cent, but in 2020 it
declined by 3.8 per cent. Total volume dropped
by 422 million to 10.65 billion tons (table 1.1 and
table 1.2).
Nevertheless, the impact was not as dramatic
as initially feared and the maritime transport
sector managed to navigate through the crisis
(gure 1.1). In 2020, maritime trade increased as
a proportion of global GDP, with an increase in
the maritime trade-to-GDP ratio as the pandemic
induced a shift in consumer demand from
services to traded goods. However, this is likely
to be short lived as demand patterns normalize
and spending continues to rebalance back
towards services. In 2021, the narrative is still
being driven by the pandemic and related risks,
but attention is now moving toward the vaccine
rollout, the recovery in growth, and the supply and
demand pressures that are currently disrupting
trade logistics. At the same time, the industry
must consider the longer-term sustainability and
resilience of shipping, ports and their hinterland
connections.
Around two-thirds of global trade in goods
takes place in developing countries (gure 1.2).
As indicated in table 1.2, in 2020, developing
countries, including the transition economies
of Asia, accounted for 60 per cent of global
goods loaded (exports) and 70 per cent of
goods discharged (imports). Much of this
growth has been in East Asia, especially China,
and there has also been a surge in volumes
on the Transpacic containerized trade route
linking East Asia to North America. A smaller
proportion of trade was in developed countries,
which generated 40 per cent of global maritime
exports (goods loaded) and 31 per cent of
imports (goods discharged).
Asia’s predominance was further strengthened
in 2020 as it maintained its 41 per cent
contribution to total goods loaded and increased
its contribution to total goods discharged
(table 1.2 and gure 1.3). Developing America
and Africa maintained their existing, smaller
shares.
Year
Tanker
trader
a
Main
bulk
b
Other dry
cargo
c
Total (all
cargoes)
1970 1 440 448 717 2 605
1980 1 871 608 1 225 3 704
1990 1 755 988 1 265 4 008
2000 2 163 1 186 2 635 5 984
2005 2 422 1 579 3 108 7 109
2006 2 698 1 676 3 328 7 702
2007 2 747 1 811 3 478 8 036
2008 2 742 1 911 3 578 8 231
2009 2 641 1 998 3 218 7 857
2010 2 752 2 232 3 423 8 408
2011 2 785 2 364 3 626 8 775
2012 2 840 2 564 3 791 9 195
2013 2 828 2 734 3 951 9 513
2014 2 825 2 964 4 054 9 842
2015 2 932 2 930 4 161 10 023
2016 3 058 3 009 4 228 10 295
2017 3 146 3 151 4 419 10 716
2018 3 201 3 215 4 603 11 019
2019 3 163 3 218 4 690 11 071
2020 2 918 3 181 4 549 10 648
Table 1.1 International maritime trade,
1970–2020
(millions of tons loaded)
Sources: Compiled by the UNCTAD secretariat based on
data supplied by reporting countries and as published on
the relevant government and port industry websites, and by
specialist sources. Dry cargo data for 2006 onwards has been
revised and updated to reect improved reporting, including
more recent gures and a better breakdown by cargo type.
Since 2006, the breakdown of dry cargo into “Main bulk” and
“Other dry cargo” is based on various issues of the Shipping
Review and Outlook and Seaborne Trade Monitor, produced
by Clarksons Research. Total maritime trade gures for 2020
are estimated based on preliminary data or on the last year
for which data were available.
Tanker trade includes crude oil, rened petroleum products,
gas, and chemicals.
b
Main bulk includes iron ore, grain, coal, bauxite/alumina,
and phosphate. Starting in 2006, “Main bulk” includes iron
ore, grain, and coal only. Data relating to bauxite/alumina and
phosphate are included under “Other dry cargo”.
c
Includes minor bulk commodities, containerized trade, and
residual general cargo.
INTERNATIONAL SEABORNE TRADE
IN 2020
following on a weak
pre-pandemic growth
of 0.5% in 2019
1980
1990
2000
2010
2020
loaded
discharged
Developing countries continue to account for the lion's
share of world maritime trade by volume
WORLD CONTAINER PORT TRAFFIC
IN 2020
Maritime trade
and port cargo
trafc
Total volumes reachedGrowth slipped by
-3.8% 10.7 billion tons
OUTLOOK
Supply chain
disruption
Transport
costs
Change in
globalization patterns
Congestion
in ports
Covid-19
pandemic
Volumes estimated atDown by
-1.2% 815.6 million TEUs
70%
60%
World maritime trade, percentage share per region
Americas
Oceania
Europe
Africa
2020 and 2021 exposed
ports' vulnerability to
disruptions and risks
World container port trafc by region, 2019-2020
(percentage annual change)
Asia
-0.4
Africa
0.0
Latin America
and the Caribbean
-1.8
Europe
-4.2
North America
-1.9
Oceania
-0.8
Asia
54
6
8
15
18
Growth in maritime trade
volumes expected to
moderate and
expand at an
annual rate of
Short-term outlook for maritime trade is positive,
however, risks are manifold and uncertainty remains
Uncertainty
UNCTAD expects world
maritime trade to recover
by
+4.3% in 2021
+2.4%
between 2022 and 2026
REVIEW OF MARITIME TRANSPORT 2021
4
Table 1.2 International maritime trade 2019–2020, by type of cargo, country group and region
Source: Compiled by the UNCTAD secretariat based on data supplied by reporting countries and as published on the relevant
government and port industry websites, and by specialist sources. Dry cargo data for 2006 onwards has been revised and
updated to reect improved reporting, including more recent gures and a better breakdown by cargo type. Total maritime
trade gures for 2020 are estimated based on preliminary data or on the last year for which data were available.
Note: Since March 2021, the category “transition economies” is no longer used by UNCTAD. Economies formerly classied
as “transition economies” and located in Europe, are reassigned to the “developed regions” grouping, and the economies
formerly classied as “transition economies” and found in Asia, are reassigned to the “developing regions” grouping. For more
extended time series and data before 2020 see UNCTADstat Data Center at https://unctadstat.unctad.org/wds/TableViewer/
tableView.aspx?ReportId=32363. Annual world totals of goods loaded and discharged are not necessarily the same, given
among other factors, bilateral asymmetries in international merchandise trade statistics and the fact that volumes loaded in
one calendar year may reach their port of destination in the next calendar year.
Include crude oil, rened petroleum products, gas, and chemicals.
Year
Goods loaded Goods discharged
Total Crude oil
Other
tanker
trade
a
Dry cargo Total Crude oil
Other
tanker
trade
a
Dry cargo
Millions of tons
World
2019 11 070.5 1 860.3 1 302.6 7 907.6 11 055.1 2 022.8 1 320.5 7 711.8
2020 10 648.3 1 716.0 1 202.3 7 730.0 10 631.1 1 863.6 1 222.0 7 545.5
Developed
economies
2019 4 503.2 453.6 477.1 3 572.6 3 778.3 902.0 463.3 2 412.9
2020 4 317.4 425.9 430.3 3 461.2 3 245.2 732.5 370.2 2 142.5
Developing
economies
2019 6 567.3 1 406.7 825.5 4 335.1 7 276.8 1 120.7 857.2 5 298.9
2020 6 330.9 1 290.1 772.0 4 268.8 7 385.9 1 131.2 851.7 5 403.0
Africa
2019 814.1 302.8 91.6 419.6 533.7 35.3 113.4 385.0
2020 735.5 236.1 83.4 415.9 510.1 30.6 107.9 371.5
Latin America
and the
Caribbean
2019 1 406.6 221.9 81.3 1 103.3 621.4 45.0 143.7 432.6
2020 1 369.2 200.5 75.6 1 093.1 590.1 39.6 130.0 420.5
Asia
2019 4 331.4 880.1 644.6 2 806.6 6 108.0 1 039.6 595.6 4 472.7
2020 4 212.2 851.8
605.8 2 754.5 6 272.4 1 060.2 609.6 4 602.6
Oceania
2019 14.5 1.7 7.8 5.0 14.9 0.8 5.4 8.6
2020 14.6 1.8 7.8 5.1 15.4 0.7 5.5 9.1
Year
Goods loaded Goods discharged
Total Crude oil
Other
tanker
trade
a
Dry cargo Total Crude oil
Other
tanker
trade
a
Dry cargo
Percentage share
World
2019 100.0 16.8 11.8 71.4 100.0 18.3 11.9 69.8
2020 100.0 16.1 11.3 72.6 100.0 17.5 11.5 71.0
Developed
economies
2019 40.7 24.4 36.6 45.2 34.2 44.6 35.1 31.3
2020 40.5 24.8 35.8 44.8 30.5 39.3 30.3 28.4
Developing
economies
2019 59.3 75.6 63.4 54.8 65.8 55.4 64.9 68.7
2020 59.5 75.2 64.2 55.2 69.5 60.7 69.7 71.6
Africa
2019 12.4 21.5 11.1 9.7 7.3 3.2 13.2 7.3
2020 11.6 18.3 10.8 9.7 6.9 2.7 12.7 6.9
Latin America
and the
Caribbean
2019 21.4 15.8 9.8 25.5 8.5
4.0 16.8 8.2
2020 21.6 15.5 9.8 25.6 8.0 3.5 15.3 7.8
Asia
2019 66.0 62.6 78.1 64.7 83.9 92.8 69.5 84.4
2020 66.5 66.0 78.5 64.5 84.9 93.7 71.6 85.2
Oceania
2019 0.2 0.1 1.0 0.1 0.2 0.1 0.5 0.2
2020 0.2 0.1 0.9 0.1 0.2 0.1 0.5 0.2
1. International maritime trade and port trafc
5
Source: UNCTAD secretariat based on the Review of Maritime Transport, various issues, and table 1.2 of this report.
0
10
20
30
40
50
60
70
1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Loaded Discharged
Figure 1.2 Participation of developing countries in international maritime trade, selected years
(percentage share in total tonnage)
Source: Compiled by the UNCTAD secretariat based on data supplied by reporting countries and as published on the relevant
government and port industry websites and by specialist sources.
0
10
20
30
40
50
60
70
Asia Americas Europe Oceania Africa
Loaded Discharged
Figure 1.3 International maritime trade, by region, 2020
(percentage share in total tonnage)
Source: UNCTAD calculations, based on the Review of Maritime Transport, various issues, data from UNCTADstat and
table 1.1 of the UNCTAD Trade and Development Report 2021. From Recovery to Resilience: The Development Dimension.
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
20122006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021
GDP
Maritime trade
Maritime trade-to-GDP ratio
Average ratio
Average ratio 2006-2014 Average ratio 2015-2021
Figure 1.1 International maritime trade, world gross domestic product (GDP)
and maritime trade-to-GDP ratio, 2006 to 2021
(percentage annual change and ratio)
REVIEW OF MARITIME TRANSPORT 2021
6
2. Disruption of global economy and trade followed by signs
of a multi-paced recovery
In 2020, global GDP declined by 3.5 per cent (table 1.3) – the largest downturn for 70 years. The greatest impact
was in the services sector – in particular in tourism, travel and hospitality. For maritime trade, however, the plunge
in ows was mitigated by the boost in demand from government stimulus packages. Estimated in March 2021
at around $16 trillion, and concentrated mainly in the United States, Europe and Japan, these packages helped
soften the landing. Demand has further revived with the lifting of some COVID-19-related restrictions.
By the third quarter of 2020, there were signs of recovery, driven by positive trends in East Asia and the
United States and the rollout of COVID-19 vaccines in many developed economies. While the manufacturing
sector was down, consumer demand rose, notably in the United States with end-year retail sales 3.4 per
cent higher than 2019 (Sand, 2021a). Unlike the downturn in the rst half of 2020, however, which was
globally synchronized, the nascent recovery is proceeding along diverging tracks, as many other economies,
especially in developing regions continue to fall behind.
In 2020 the drop in GDP in developing economies, at 1.8 per cent (table 1.3), was less than the global
average of 2.9 per cent for the 2009–2021 period. This was largely due to the performance of China which
was the only country to have seen some economic growth in 2020 (2.3 per cent). China's efforts to contain
the pandemic, along with a stimulus package, provided support to industry and exports.
In 2020, output in developed economies contracted by 4.7 per cent. The drop was lower in the United States
at 3.5 per cent, as scal measures helped minimize the economic downturn, and steeper in the EU at 6.2 per
cent, reecting renewed pandemic outbreaks. In the United Kingdom, the drop was steeper still at 9.9 per cent,
as a result not just of the pandemic restrictions
but also of Brexit which disrupted supply chains
as traders adjusted to new rules and procedures.
Elsewhere, Japan's economy fell by 4.7 per cent
while India's dipped by 7.0 per cent. There was also
a severe impact on GDP in Latin America and the
Caribbean, down by 7.1 per cent, in Africa by 3.4
per cent, in Western Asia by 2.9 per cent, and the
Russian Federation by 3.0 per cent.
For 2021, current projections for global GDP are
pointing to growth of 5.3 per cent. Progress is again
expected to be uneven, with Asia and the United
States forging ahead. The speed and geography
of the recovery will depend to large extent on the
vaccine rollout and on the structure, scale, and
duration of government support, as for example, in:
• India – The announced support measures
focus on road infrastructure and are
expected to boost dry bulk shipping by
increasing demand for raw materials.
• Japan – The $3-trillion stimulus package,
including the funds announced at the end
of 2020 and focusing on green and digital
innovation, could boost container volume in
intra-Asian trade.
• United States – Additional scal stimulus
measures, including large infrastructure
plans will lift demand for some commodities.
• European Union – Spending from the Next
Generation recovery fund is due to begin
in 2021.
• Least developed countries – Stimulus
packages average only 2.1 per cent of their
GDP, i.e., one-ninth of the global average
(UNDESA, 2021).
Region or country 2019 2020 2021
a
World 2.5 -3.5 5.3
Developed countries 1.7 -4.7 4.7
of which:
United States 2.2 -3.5 5.7
European Union (27) 1.6 -6.2 4.0
United Kingdom 1.4 -9.9 6.7
Japan 0.3 -4.7 2.4
Australia 1.8 -2.5 3.2
Russian Federation 1.3 -3.0 3.8
Developing countries 3.7 -1.8 6.2
of which:
Africa 2.9 -3.4 3.2
East Asia 4.3 0.3 6.7
of which:
China 6.1 2.3 8.3
South Asia 3.1 -5.6 5.8
of which:
India 4.6 -7.0 7.2
South-East Asia 4.4 -3.9 3.5
Western Asia 1.3 -2.9 3.5
Latin American and the Caribbean -0.1 -7.1 5.5
of which:
Brazil 1.4 -4.1 4.9
Table 1.3 World economic growth,
2019–2021
(annual percentage change)
Source: UNCTAD secretariat, based table 1.1 of UNCTAD
Trade and Development Report 2021. From Recovery to
Resilience: The Development Dimension.
Note:
Calculations for country aggregates are based on
world GDP at constant 2015 dollars.
a
Forecast.
1. International maritime trade and port trafc
7
In 2020 taken together, world merchandise imports and exports fell by 5.4 per cent (table 1.4), This
decline was far lower than more pessimistic forecasts at the height of the pandemic (UNCTAD, 2020a).
In April 2020, the World Trade Organization (WTO) had expected world merchandise trade to drop by
between 13 and 32 per cent in 2020 (WTO, 2020). There was indeed a slump in the second quarter
of 2020 but trade volumes bounced back in the third quarter, responding to the easing of restrictions
and lockdowns and announcements of new vaccines. Along with vaccine rollout in major developed
regions, the rapid return in volumes reected the resilience of East Asian trade and the boost in consumer
demand from scal spending in the United States. Trade in services however remained subdued across
all economies. Tourism and cruise shipping were hit hard, though there was a growth in cross-border
services that were increasingly enabled by digital technologies.
Exports and imports fell in almost all regions – though to different extents. As shown in table 1.4, between 2019
and 2020 developed country regions saw a drop in exports of 6.7 per cent and in imports of 5.6 per cent.
The United Kingdom recorded a double-digit drop in exports, as did the United States though here the
implementation of the Phase One trade agreement boosted some exports to China (Sand, 2020a). Trade
also declined in the euro area and Japan albeit at relatively lower rates while trade involving other developed
regions fared relatively better with exports falling by only 5.1 per cent and imports by 4.5 per cent.
Developing regions also recorded a drop in merchandise trade volumes although at more moderate rates:
exports fell by 2.3 per cent while imports dropped by 5.2 per cent. The one exception was China where,
despite the disruption, exports rose by 1.3 per cent and imports by 1.7 per cent. For Asia, excluding
China, however, exports declined by 3.6 per cent while imports dropped by 11.6 per cent. In Latin America
imports dropped by 11.2 per cent and exports by 4.2 per cent. In Africa and the Middle East exports
fell by 6.8 per cent and imports by 2.8 per cent. In Eastern Europe and Commonwealth of Independent
States, the decline in imports was less at 2.2 per cent, though imports fell by 5.4 per cent.
2021 saw a revival in world merchandise trade. During the rst ve months of the year exports
were 14.3 per cent higher than in the corresponding period in the previous year, while imports rose
by 13.3 per cent (table 1.4). But the recovery was uneven with exports from Africa and the Middle
East as well as from the United Kingdom continuing their decline. In the United States imports jumped
Table 1.4 Growth in the volume of world merchandise trade, 2019–2021
(annual percentage change)
Volume of exports
(percentage change)
Volume of imports
(percentage change)
2019 2020 2021
a
2019 2020 2021
a
World
-0.3 -5.3 14.3 -0.3 -5.5 13.3
Developed countries
-0.2 -6.7 12.5 -0.2 -5.6 12.2
of which:
Euro area
-0.1 -8.7 13.4 0.0 -8.2 11.3
United States
-0.5 -11.0 11.0 -0.4 -4.0 16.0
United Kingdom
-3.1 -14.4 -2.5 3.9 -13.5 7.7
Japan
-1.6 -7.8 17.3 0.8 -6.2 3.7
Other developed countries
2.0 -5.1 12.3 0.0 -4.5 15.3
Developing countries
-0.4 -2.3 17.5 -0.6 -5.2 15.9
of which:
China
0.4 1.3 34.3 0.0 1.7 17.1
Latin America
0.6 -4.2 9.9 -1.5 -11.2 21.0
Africa and the Middle East
-4.0 -6.8 -2.7 -0.3 -2.8 3.1
Asia (not including China)
-1.3 -3.6 19.6 -2.4 -11.6 20.2
Eastern Europe and Commonwealth of Independent States
2.0 -2.2 0.6 5.0 -5.4 8.8
Source:
UNCTAD Secretariat calculations, based on CPB World Trade Monitor, July 2021. Data source and methodology are
aligned with UNCTAD, Trade and Development Report 2021.
Note:
Country coverage and classication in the aggregated country groupings is not comprehensive and relies on
Ebregt (2020).
a
For 2021, gures reect percentage change between the average for the period January to May 2021 and January to
May 2020.
REVIEW OF MARITIME TRANSPORT 2021
8
by 16.0 per cent, reecting inventory building and the lasting benets of scal support measures. During
the same period, imports increased into the euro area by 11.3 per cent, the United Kingdom by 7.7 per
cent and Japan by 3.7 per cent. Imports into developing countries increased by 15.9 per cent and into
Eastern Europe and Commonwealth of Independent States by 8.8 per cent.
Much of global import demand in the rst half of 2021 was met from Asia, in particular from China whose
exports expanded by 34.3 per cent. There was also stronger import growth in Latin America, of 21.0 per
cent. Recovery in Africa and the Middle East was more moderate for both exports and imports. For the
full year 2021, the WTO expects world merchandise trade volume to grow by 8.0 per cent though the
recovery will be uneven (WTO, 2021).
This bounce-back in merchandise trade in almost all major economies has been faster than in previous
recessions – in 2009 and 2015 – though it has been from a low base and has been more robust in
goods than services (UNCTAD, 2021). The rebound was evident across a wide range of sectors including
pharmaceuticals, communications and ofce equipment, as well as minerals and agri-food. Much of this
has been due to the release of pent-up demand for durable goods such as cars, as well as strong demand
for products that support working from home. In contrast, recovery in the energy sector remains hesitant.
3. Maritime trade fell in 2020 but fared better than initially feared
The sudden dip and subsequent recovery in merchandise trade was reected in the patterns of maritime
trade. In 2020, the outcome was better than initially feared. Volumes dipped by around 12 per cent in
May 2020 compared with May 2019, but only by around 2.0 per cent in the fourth quarter compared with
the same quarter in 2019 (Clarksons Research, 2021b). For 2020, following a contraction of 3.8 cent,
UNCTAD estimates shipping volumes to have lost 422 million tons.
The performance varied by market segment, with some sectors performing better than others (table 1.1,
table 1.2, gure 1.4). Worst hit was tanker shipping, but there was less impact on containerized trade, gas
shipments, and on dry bulk commodities such as iron ore and grains.
The second half of 2020 saw a nascent recovery – though asymmetric across market segments. There was
a return in volumes for containerized and dry bulk commodities, but tanker shipping awaited a full recovery
in global demand. At the same time, the sudden boost in demand stumbled into shortages – of shipping
capacity, and of containers, and equipment. As result, freight rates surged, with proliferating surcharges.
This may have bolstered shipping protability but it put supply chains under strain, while adding to port
congestion and increasing delays and dwell times, and leading to a general decline in service reliability.
Source: UNCTAD Review of Maritime Transport, various issues. For 2006–2020, the breakdown by cargo type is based on
Clarksons Research, Shipping Review and Outlook, Spring 2021 and Seaborne Trade Monitor, various issues.
Note: Given methodological differences, containerized trade data in tons sourced from Clarksons Research are not
comparable with data in TEUs featured in tables 1.8 and 1.9 and gures 1.8 and 1.9 of this report and which are sourced
from MDS Transmodal.
a
Tanker trade includes crude oil, rened petroleum products, gas, and chemicals.
0
2
4
6
8
10
12
1980
1985
1990
1991
1992
1993
1994
1995
2000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Tanker trade
a
Main bulk
Container
Other dry cargo
Figure 1.4 International maritime trade by cargo type, selected years
(millions of tons loaded)
1. International maritime trade and port trafc
9
The pandemic has proved to be an asynchronous, multi-wave event, as COVID-19 outbreaks lead to
sequences of lockdowns and various restrictions. In 2020 these disruptions were exacerbated by other
events such as the closure in China of the port of Yantian, which is a critical international container
terminal, and the week-long blockage of the Suez Canal, with further problems in 2021 as a result of
extreme weather events. For some of the major industries in Europe, these bottlenecks are causing
shortages of inputs and delays in delivery, and generally holding up the recovery. Automotive plants, for
example, had to close temporarily due to missing critical components and parts (Ewing and Clark, 2021).
This conuence of factors exposed the vulnerabilities of supply chains and of their underlying maritime
transport systems. They have also amplied the call for nearshoring and reduced the attractiveness of
long-haul trade and extended supply chains.
When adjusted for distance travelled, however, the decline in maritime trade in 2020 was lower – falling
by only 1.7 per cent, to an estimated 58,865 billion cargo ton-miles (gure 1.5). But there were different
outcomes for different types of cargo: oil decreased by 7.0 per cent and containerized trade by 1.5 per
cent, while there was an increase of 1.3 per cent in dry bulk trades (iron ore, coal, and grain) and of 6.7 per
cent in gas shipments, including liquied petroleum gas (LPG) and liquied natural gas (LNG) (Clarksons
Research, 2021a).
International maritime trade ows were sustained in 2020 by the rapid economic rebound in China with a
9 per cent increase in maritime import demand, in particular imports of iron ore and grain. Maritime trade
ows were also supported by China’s exports of containerized goods to the United States. Meanwhile,
lower demand for oil, and cuts by major OPEC+ oil producers and oil production, have continued to keep
a lid on the recovery in tanker shipping.
Most ton-miles and tons generated by bulkers of over 100,000 dwt were contributed by shipments from
Australia, followed by Brazil. In 2020, Australia generated 58 per cent of world iron ore exports and Brazil
23 per cent (gure 1.6). Much of this is destined for China. In 2020, China accounted for 76 per cent of
world iron ore imports and 20 per cent of coal imports. Tonnage on the Australia-China route, however,
declined in 2020, probably as result of the pandemic and the tensions between the two countries. China
is seeking to diversify its sources of supply and is looking more to Africa. Trade in ton-miles generated
by bulkers on the Africa-China route increased in 2020, probably reecting increased iron ore shipments
from South Africa. Guinea could also be a supplier since it is reported to hold large reserves of untapped
high-quality iron ore. Guinea is expected to start shipping iron ore beginning in 2026, which will boost
demand for dry bulk shipping (Hellenic Shipping News, 2020). The country is already the world’s top
supplier of bauxite, much of which is shipped to China.
Source: UNCTAD secretariat based on data from Clarksons Research. Shipping Review and Outlook, Spring 2021.
a
Includes iron ore, grain, coal, bauxite/alumina, and phosphate.
b
Estimated.
c
Forecast.
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
b
2021
c
Main bulk
a
Other dry cargo Container
Oil Gas Chemicals
Figure 1.5 International maritime trade in cargo ton-miles, 2001–2021
(billions of ton-miles)
REVIEW OF MARITIME TRANSPORT 2021
10
Crude oil exports continue to be dominated by Western Asia (gure 1.7). Much of the world's import
demand is from Asia, mainly China and India, followed by Japan and the Republic of Korea. Ton-mile
increase generated by North American exports in 2020 reects the strong import demand in China and
growth in exports from the United States captured under Phase One of the trade deal with China. At the
underlying level, the shale boom is also a key driver of North American oil exports, with the United States
becoming a net seaborne energy exporter.
Source: UNCTAD based on VesselsValue data 2021.
Note: Based on dry bulk vessels of more than 100,000 dwt.
0 10 20 30 40 50 60
Australia
Brazil
Asia
Latin America
and the Carribean
(excluding Brazil)
North America
Europe
Africa
Other
Ton 2020
Ton 2019 Ton-mile 2020 Ton-mile 2019
Figure 1.6 World capesize dry bulk trade by exporting region in tons
and ton-miles, 2019–2020 (percentage share)
Source: UNCTAD based on VesselsValue data, 2021.
Note: Tanker vessels of more than 320,000 dwt.
0
10
20
30
40
50
60
70
Africa Asia Europe Latin America
and the Caribbean
North America Unknown
Ton-mile 2018 Ton-mile 2019 Ton-mile 2020
Ton 2018
Ton 2019 Ton 2020
Figure 1.7 World ultra-large tanker trade by exporting region in ton
and ton-miles , 2018–2020 (percentage share)
1. International maritime trade and port trafc
11
4. Diverging impacts and recoveries for key shipping markets
Oil trade still under pressure and gas trade down
The shipping market hardest hit by the pandemic has been the oil trade. Between 2019 and 2020 UNCTAD
estimates that tanker trade, including crude oil, rened petroleum products, and gas, slipped by 7.7 per
cent, with volumes down from 3.2 billion to 2.9 billion tons (table 1.5).
The steepest drop was for seaborne crude oil at 7.8 per cent, as total volumes fell to 1.7 billion tons.
Crude oil imports declined in most key importing markets including the United States, Europe, India,
Japan, and the Republic of Korea. The only increase was in China, by 8 per cent.
The demand for crude oil in 2020 reects a reduction in demand for fuel – Jet A for aircraft, gasoline for
automobiles, and diesel for trucks – with volumes declining by over 10 per cent (Clarksons Research, 2021b).
While road travel is expected to increase, long-distance aviation prospects remain uncertain, awaiting a
worldwide rollout of vaccines.
Fuel imports to West Coast Latin America from the United States have fallen, partly because of limited
renery capacity in the United States, opening up an opportunity for suppliers from Asia. Increased diesel
and gasoline shipments from Asia to West Coast Latin America will benet ton-mile growth (Connelly, 2021).
The tanker trade has suffered from weak oil demand, high inventories, and cuts in oil supply by OPEC+
members. That said, 2021 should see an improvement as demand gradually recovers and supply increases.
Starting in August 2021, as oil prices hit their highest levels in more than two years, OPEC+ members agreed
to phase out 5.8 million barrels per day of production cuts (OPEC, 2021). Meanwhile, a lifting of the United
States sanctions would increase exports from the Islamic Republic of Iran, which could displace production
from other locations but nevertheless increase the demand for tankers. With an increase in OPEC production
and the expansion of Asian reneries, there is likely to be more demand for very large crude carriers.
India’s recent decision to diversify crude oil imports and reduce its dependency on Western Asia is
also good news for operators of crude-oil tankers and will boost demand in terms of ton-miles (Drewry
Maritime Research, 2021a). Ongoing repositioning of renery capacity closer to demand is likely to alter
trade patterns, which could boost crude ton-miles but is more likely to reduce product tanker ton-miles.
In the longer term, tanker demand will be affected by the current global energy transition, which implies a
change in the energy mix. Elsewhere, as more reneries in some advanced economies close, changes to
oil trade patterns are likely to intensify (Danish Shipping Finance, 2021). A reduction in the United States
exports due to the low oil price environment may reduce long-haul trades. Suezmaxes may regain some
business due to the potential expansion of Western Asian crude oil production destined for India and South
East Asia (Danish Shipping Finance, 2020). Oil product trade ows could become more regionalised,
lowering seaborne volumes and travel distances (Danish Shipping Finance, 2020). Ongoing repositioning
of renery capacity closer to demand is likely to alter trade patterns, which could boost crude ton-miles
but would more likely reduce product tanker ton-miles. The pandemic has also weighed, if to a lesser
extent, on the global demand for gas. In 2020, global gas trade increased only marginally, by 0.4 per
cent, while volumes of LNG exports are estimated to have expanded by 1.1 per cent and of LPG to have
declined by 1.0 per cent. Gas projects have been
delayed by weak energy prices, including work
on LNG export terminals in the United States and
LNG feedstock projects in Australia (Clarksons
Research, 2020). That said, exports from the
United States rebounded in 2020, thanks to a
boost in consumer demand supported by a cold
winter in Asia. The United States also increased
its LPG trade, by 15 per cent.
Natural gas offers a lower-carbon source of
energy, so with more demands for sustainability
and a transition to lower-carbon energy, the
global gas trade is set to increase. Much of the
growth will be driven by Asia, with an important
role for China’s new propane dehydrogenation
plants. India’s trade will also expand as a result of
subsidized domestic LPG prices.
2019 2020
Percentage
change
2019–2020
Crude oil 1 860 1 716 -7.8%
Other tanker trade 1 303 1 202 -7.7%
of which:
Gas 478 480 0.4%
Total tanker trade 3 163 2 918 -7.7%
Sources: UNCTAD secretariat, derived from UNCTAD data in
table 1.2 of this report.
Note: Gas trade gures are derived from Clarksons Research,
Seaborne Trade Monitor, Volume 8, No.6, June 2021.
a
Includes: rened petroleum products, gas, and chemicals.
Table 1.5 Tanker
a
trade, 2019–2020
(million tons and percentage
annual change)
REVIEW OF MARITIME TRANSPORT 2021
12
Natural gas is set to contribute a larger share to the global energy mix in the coming years, with much of
the growth driven by shale-gas production in the United States, as well as by production in Western Asia
and in other regions including the Mediterranean and East Africa (Clarksons Research, 2020).
Dry bulk commodity trade deed pressure in 2020 with China keeping
the trade owing
1
Total dry bulk trade fell by an estimated 1.5 per cent in 2020, as volumes slipped to 5.2 billion tons
(table 1.6). China's rapid economic recovery has boosted its import demand so it could take up extra
cargo generated by suppressed demand in other regions. Iron ore trade remained unperturbed as
shipments increased by 3.2 per cent to 1.5 billion tons. Grain trade also held rm, increasing volumes by
7.1 per cent. Supporting factors included a record Brazilian harvest, the returning United States-China
trade, and better prospects in pig farming in China following the recovery from the 2018 African swine
fever outbreak. In 2021, seaborne dry bulk trade is projected to expand by 3.7 per cent, with iron ore and
grain trade growing steadily, a rebound in minor bulk volumes and more coal trade.
Coal trade plunged 9.3 per cent in 2020, partly as a result of the pandemic, with reduced electricity
demand across regions overlaid on the ongoing structural shift towards cleaner energy sources. Minor
bulk trade also came under pressure, though only falling by 2.2. per cent. There was also less trade in
forest products, as well as lower nickel ore exports due to Indonesia's export ban. The bauxite trade was
much stronger, expanding by 8.2 per cent, with China accounting for 77 per cent, and Guinea providing
46 per cent of the supply (Clarksons Research, 2021b).
The current major players in the dry bulk trade are featured in table 1.7. These patterns are likely to
change as a result of tensions between China and Australia which are affecting coal and iron ore trade.
To compensate for the ban on Australian cargo China has cut import duties on coal by land from
Mongolia. This would reduce trade by ship, though the impact could be mitigated by increases on the
Indonesia-China route (Drewry Maritime Research, 2021b). Meanwhile, a shift in Australia's exports away
from China to more distant locations such as Saudi Arabia will increase shipping demand and ton-miles
(Drewry Maritime Research, 2021c).
Recovering from the pandemic on the ‘build back better’ principle will require greener and smarter solutions
and a shift towards cleaner and lower-carbon energy sources. In the longer term this will undermine
demand for dry bulk carriers (Danish Shipping Finance, 2020). Equally, as the Chinese economy becomes
less steel intensive, its demand for iron ore will
atten. The loss of seaborne trade could, however,
be partially offset by a growth in trade in the non-
ferrous metals that are essential for producing
renewable technologies – such as nickel ore,
copper, lithium, cobalt, and bauxite – though these
commodities are mostly traded in smaller volumes
(Danish Shipping Finance, 2021).
Trade tensions between China and the United
States have affected trade in grain. In 2017, the
United States accounted for 34 per cent of China's
seaborne grain imports. In 2019, this share fell
to 18 per cent, before recovering to 27 per cent
in 2020, on the back of the Phase One trade
deal commitments. China’s efforts to diversify its
suppliers have beneted Brazil whose share of the
Chinese market increased from 44 per cent in 2017
to about 60 per cent in 2018 and 2019, before
falling back to 48 per cent in 2020 (Zhang, 2021).
Other countries have also gained market share,
including Ukraine, France, the Russian Federation,
and Argentina. But China’s grain import demand
also faces ‘downside risks, including a renewed
outbreak of African swine fever and softer crush
margins that may dampen soybean imports.
1
Detailed gures on dry bulk commodities are derived from Clarksons Research (2021), Seaborne Trade Monitor. Volume 8.
No. 6. June.
2019 2020
Percentage
change
2019–2020
Main bulka 3 218.0 3 181.0 -1.1%
of which:
Iron ore 1 456.0 1 503.0 3.2%
Coal 1 284.0 1 165.0 -9.3%
Grain 478.0 512.0 7.1%
Minor bulk 2 030.0 1 986.0 -2.2%
of which:
Steel products 373.0 354.0 -5.1%
Forest products 383.0 365.0 -4.7%
Total dry bulk 5 248.0 5 167.0 -1.5%
Table 1.6 Dry bulk trade 2019–2020
(million tons and
percentage change)
Source: UNCTAD secretariat calculations, based on
Clarksons Research, 2019d, Dry Bulk Trade Outlook,
Volume 26, No. 6, June.
a
Includes iron ore, coal (steam and coking) and grains
(wheat, coarse grain and soybean).
1. International maritime trade and port trafc
13
Government scal spending
boosts consumption and helps
containerized trade weather the
storm
In 2020, full box trade fell by just 1.1 per cent
to 149 million twenty-foot equivalent units (TEU)
(gure 1.8). This was a better outcome than
initially feared and quite an accomplishment
compared to the 8.4 per cent plunge in 2009
following the nancial crisis. After the shock in
early 2020, volumes swiftly returned, as consumer
demand was boosted by stimulus packages and
measures to support incomes.
The bounce-back in 2021 reected easing
economic impacts and the unlocking of pent-up
demand, as well as restocking and building
inventory. But there was also a shift in consumption
patterns away from services and towards goods,
notably for health products and pharmaceuticals,
as well as home ofce equipment, along with
changes in shopping patterns and the expansion
of ecommerce. The surge in trade was welcome
but on such a scale that shipping services and port
operations were often unable to keep up, resulting
in logistical bottlenecks. By the end of 2020 and
until the rst half of 2021, the whole industry,
including shipping, ports, shippers, and inland
carriers struggled with shortages in containers,
equipment and shipping capacity. This has added
to port congestion and reduced service levels and
reliability, while also increasing freight rates and
surcharges (see chapter 3).
Reecting the rebound in volumes on the
eastbound leg of the East Asia-United States trade,
the combined share of the East-West trade routes,
including the Asia-Europe, the Transpacic, and
the Europe-North America (Transatlantic) increased
marginally in 2020. Together, intra-regional trade,
essentially reecting Intra-Asian ows and South-
South trade, accounted for over 39.5 per cent of
the total. Non-mainlane East-West trade routes
(e.g., Eastern Asia-South Asia-Western Asia) and
North-South routes represented 12.9 per cent
and 8.0 per cent of the market, respectively.
Performance varied across regions and trade
lanes (table 1.8). In 2020, total volumes on the
mainlane routes decreased by only 0.3 per cent,
as the declines of 2.6 per cent on the Asia-Europe
trade lane and of 3.2 per cent on the Transatlantic
lane were partially offset by growth of 2.8 per cent
on the Transpacic route (table 1.9). Non-mainlane
trade fell by 1.6 per cent, reecting the disruption
in India which reduced the East-West trade by 3.3
per cent. North-South trade fell by 1.8 per cent,
while South-South trade contracted by 2.4 per
cent. By early summer of 2020 the rapid recovery
Steel producers Steel users
China 56 China 56
India 5 India 6
Japan 4 United States 5
United States 4 Japan 5
Russian Federation 4 Republic of Korea 4
Republic of Korea 4 Russian Federation 4
Turkey 2 Germany 2
Germany 2 Turkey 2
Brazil 2 Viet Nam 1
Islamic Republic
of Iran
2 Other 15
Other 15
Iron ore exporters Iron ore importers
Australia 58 China 76
Brazil 23 Japan 7
South Africa 5 Europe 6
Canada 4 Republic of Korea 5
India 3 Other 6
Sweden 1
Other 6
Coal exporters Coal importers
Indonesia 35 China 20
Australia 31 India 19
Russian Federation 13 Japan 14
United States 5 Republic of Korea 10
South Africa 6 European Union 6
Colombia 5 Taiwan Province of
China
6
Canada 2 Malaysia 3
Other 3 Other 22
Grain exporters Grain importers
United States 26 East and South Asia 49
Brazil 23 Africa 14
Argentina 11 South and Central
America
10
Ukraine 10 Western Asia 9
European Union 9 European Union 9
Russian Federation 7 North America 1
Canada 6 Other 8
Australia 3
Other 5
Table 1.7 Major dry bulk and steel:
producers, users, exporters,
and importers, 2020
(percentage share of
world markets)
Sources: UNCTAD secretariat, based on data from the World
Steel Association (2021), Clarksons Research Seaborne Trade
Monitor, Volume 8, No. 6, June 2021; Dry Bulk Trade Outlook,
Volume 27, No.6, June 2021.
REVIEW OF MARITIME TRANSPORT 2021
14
in Asia had helped the intra-Asian trade rebound, and for the full year the decline was only 0.4 per cent
for intra-regional trade.
2020 saw an increase of 2.8 per cent on the Transpacic route, boosted by a surge in ows from East
Asia to the United States (table 1.9). Between the fourth quarter of 2019 and the rst quarter of 2020,
containerized trade from Asia to North America had dropped by 13 per cent, but in the third quarter
of 2020 it jumped by 36 per cent. While container shipping imports to the United States had been rising,
exports from that country had fallen considerably. At the port of Los Angeles, for example, loaded imports
were four times greater than loaded exports – so the return legs often had empty containers, which
created shortages for exporters.
Faced with congestion and long waiting times at ports, stakeholders have looked for alternatives. In
some cases, they have accepted more costly air freight and in others have diverted ships away from the
busiest ports. In the short term, these problems are unlikely to diminish. The latest United States $1.9-trillion
stimulus package should boost consumer spending which, combined with low inventory levels, is expected
to increase imports (Sand, 2021b). In the second quarter of 2021, containerized shipments from East Asia
to North America were 35 per cent higher than in equivalent quarter in 2020 (MDS Transmodal, 2021).
Source: UNCTAD secretariat calculations, based on MDS Transmodal, World Cargo Database, June 2021.
Note: Projected gure for 2021 based on table 1.11 of this report.
-10
-5
0
5
10
15
20
0
20
40
60
80
100
120
140
160
180
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Million TEU (left axis) Percentage annual growth
Figure 1.8 Global containerized trade, 1996–2021
(million TEU and percentage annual change)
Source: UNCTAD secretariat calculations, based on data from MDS Transmodal, World Cargo Database, June 2021.
Note: Non-mainlane East West: Trade involving Western Asia and the Indian Sub-continent, Europe, North America, and
East Asia.
North-South: Trade involving Oceania, Sub-Saharan Africa, Latin America, Europe, and North America.
South-South: Trade involving Oceania, Western Asia, East Asia, Sub-Saharan Africa and Latin America.
Intra-regional: Trade within Europe, Africa, Asia, North America, Latin America and Oceania.
8.0
12.4
12.9
27.1
39.7
0 5 10 15 20 25 30 35 40 45
North-South
South-South
Non-mainlane East-West
Intra-regional
Main East-West
Figure 1.9 Global containerized trade by route, 2020
(market shares, percentage of world total TEU)
1. International maritime trade and port trafc
15
Table 1.8 Containerized trade on East-West trade routes, 2016–2020
(million TEU, percentage annual change)
2016 2017 2018 2019 2020
Main East-West routes 54 480 143 57 520 472 60 323 619 59 317 350 59 168 679
Other routes 80 879 086 86 095 802 88 844 890 91 538 274 90 046 704
of which
Non-mainlane East-West 18 005 252 19 056 910 19 049 879 19 960 498 19 299 089
North-South 11 120 656 11 745 000 12 086 773 2 099 662 11 882 623
South-South 15 533 787 16 920 644 18 175 418 18 892 469 18 430 527
Intra-regional 36 219 391 38 373 249 39 532 821 40 585 645 40 434 465
World total 135 359 229 143 616 274 149 168 510 150 855 623 149 215 384
Percentage change
Main East-West routes 4.03 5.6 4.9 -1.7 -0.3
Other routes (Non-mainlane) 1.40 6.5 3.2 3.0 -1.6
of which
Non-mainlane East-West 2.57 5.8 0.0 4.8 -3.3
North-South -0.37 5.6 2.9 0.1 -1.8
South-South -1.68 8.9 7.4 3.9 -2.4
Intra-regional 2.75 5.9 3.0 2.7 -0.4
Source: UNCTAD secretariat calculations, based on data from MDS Transmodal, World Cargo Database, June 2021.
Note: Non-mainlane East West: Trade involving Western Asia and the Indian Sub-continent, Europe, North America, and
East Asia.
North-South: Trade involving Oceania, Sub-Saharan Africa, Latin America, Europe, and North America.
South-South: Trade involving Oceania, Western Asia, East Asia, Sub-Saharan Africa and Latin America.
Intra-regional: Trade within Europe, Africa, Asia, North America, Latin America and Oceania.
Eastbound Westbound
Total
Trans-Pacic
Eastbound Westbound
Total
Asia-Europe
Eastbound Westbound
East
Asia–North
America
North
America–East
Asia
Northern
Europe and
Mediterranean
to East Asia
East Asia
to Northern
Europe and
Mediterranean
North America
to Northern
Europe and
Mediterranean
Northern
Europe and
Mediterranean
to North
America Transatlantic
2014 16.1 7.0 23.2 6.3 15.5 21.8 2.8 3.9 6.7
2015 17.4 6.9 24.2 6.4 15.0 21.3 2.7 4.1 6.8
2016 18.1 7.3 25.4 6.8 15.3 22.1 2.7 4.2 6.9
2017 19.3 7.3 26.6 7.1 16.4 23.4 2.9 4.6 7.5
2018 20.7 7.4 28.0 7.0 17.3 24.3 3.1 4.9 8.0
2019 19.9 6.8 26.7 7.2 17.5 24.8 2.9 4.9 7.8
2020
20.6 6.9 27.5 7.2 16.9 24.1 2.8 4.8 7.6
2021 24.1 7.1 31.2 7.8 18.5 26.3 2.8 5.2 8.0
Percentage annual change
2014–2015 7.5 -2.2 4.6 0.9 -3.2 -2.0 -3.1 5.1 1.7
2015–2016 4.3 6.6 5.0 6.3 2.4 3.6 0.2 3.2
2.0
2016–2017 6.6 -0.4 4.6 4.2 6.8 6.0 7.3 8.0 7.7
2017–2018 7.1 1.0 5.4 -0.9 5.7 3.7 5.3 7.6 6.7
2018–2019 -3.6 -7.4 -4.6 2.9 1.4 1.8 -4.7 -0.2 -1.9
2019–2020 3.2 1.6 2.8 -0.1 -3.7 -2.6 -4.6 -2.4 -3.2
2020–2021 17.1 2.7 13.5 8.0 9.5 9.0 1.4 9.0 6.2
Table 1.9 Containerized trade on major East-West trade routes, 2014–2021
(million TEU and percentage annual change)
Source: UNCTAD, based on MDS Transmodal, World Cargo Database, June 2021.
REVIEW OF MARITIME TRANSPORT 2021
16
On other routes, the Asia-Europe trade declined by 2.6 per cent, reecting reduced demand in
Europe – despite frontloading and inventory building in the United Kingdom ahead of Brexit in 2020.
And transatlantic trade fell by 3.2 per cent, depressed by reduced import demand from Europe,
although solid import demand from North America moderated to 2.4 per cent the fall on the backhaul
journey.
The crunch in container shipping in 2021 revealed many logistical problems, inefciencies and
vulnerabilities that are threatening the sustainability of the recovery and the competitiveness of supply
chains. In May 2020, global schedule reliability had been 75 per cent, but in May 2021 it was only 39 per
cent and in that month the average delay for late vessels was six days – down from the February peak of
seven days, but still higher than that for most of 2020 (Metroshipping, 2021). At the same time, however,
freight rates and surcharges, and fees, including demurrage and detention fees, had soared, though the
latter rates were inconsistent across ports and carriers (Waters, 2021a).
These problems have been exacerbated by shipping network disruptions. In May 2021, the month-long
closure of the port of Yantian in China increased cargo bottlenecks leading to a backlog affecting the
region’s manufacturing sector and increasing the number of blank sailings causing headaches for shippers
(Port Technology International, 2021a; Waters, 2021b). Although less disruptive, the March 2021 grounding
of the 20,150-TEU containership Ever Given in the Suez Canal blocked the canal, increasing delays for
ships heading for Europe and added to a logistical disruption and port congestion. Some voyages had to
be re-routed around the Cape of Good Hope, adding up to 7,000 miles to the journey – and pushing up
freight and charter rates (Clarksons Research, 2021c).
Carriers argue that they are deploying all available capacity and that the current strain is being triggered
by large and rapid swings in demand, and the surges in trade ows. This is leading to delays in returning
containers and reducing effective capacity, making it difcult to cut delays, rates, and fees, while forcing
carriers to adjust their networks and avoid some ports. They had already been advising customers on the
Transpacic route, for example, that schedule disruptions would lead to blank sailings (Mongelluzzo, 2021a).
As for terminal operators, they blame delays at ports on carriers, noting increases in double-sailings – two
or more vessels sailing within the same week on the same service string or ordered set of ports. Large
peaks and troughs in volumes leading to operational instability have disrupted operations and increased
congestion (Waters, 2021c).
From their perspective, shippers have been looking for alternatives and solutions. Some have resorted
to higher-priced air freight, while on the Far East-Europe route they have also been attracted by rail
transport. According to Chinese customs data, rail volumes and capacity are still relatively small, but the
two-way trade value nearly trebled in the rst ve months of 2021 (Global Times, 2021). Meanwhile, on
the Transpacic and intra-Asian routes some commodities, such as grain and forestry goods, have seen
a temporary de-containerization with goods despatched on dry bulk ships, adding to the demand for
multipurpose ships and dry bulk carriers (Sand, 2021c).
To secure space on vessels, some shippers are seeking longer-term, multi-year, end-to-end contracts with
carriers. For their part some carriers seek to convert ‘ocean customers’ to long-term ‘end-to-end logistics
customers’. Under these arrangements, shippers have access to logistics services such as warehousing,
customs clearance, visibility, and the ability to speed up or slow down shipments (Knowler, 2021).
Examples include Maersk's aim to become a full-service, end-to-end integrator, and the focus of CMA
CGM and its CEVA Logistics division on creating integrated services (Tirschwell, 2021). In response to
increasing congestion and shrinking ocean capacity Maersk has launched the rst block train intermodal
service between Europe and China (Port Technology International, 2021b).
The Global Shippers’ Forum argues that the real crunch point for shippers is the plummeting service
performance and the unpredictability of container delivery, and has renewed its call to remove the consortia
block exemption regulation (Baker, 2021a). It points to the increasing number of blank sailings – ships
skipping a port or ports, or cancelling the entire string – which reduce the number of containers that
shippers can export. This disproportionately affects lower-paying shippers since carriers favour cargo
from higher-paying customers (Waters, 2021c). In this respect, the United States Congress is drafting
legislation to strengthen the Federal Maritime Commission’s oversight of carriers' shipping practices
(Gallagher, 2021).
The Global Shippers Alliance maintains that since no carrier on its own will be able to guarantee
good connectivity and port pairs, the current supply chain crisis is unlikely to be solved by further
regulation of container shipping. Instead it calls on carriers to take more risk, building contingency into
their prices and employing new technology to make supply chain forecasts more accurate and more
1. International maritime trade and port trafc
17
transparent. The best solution, they say, would be to adopt enforceable contracts, which would also
act as hedges against uncertainty and enhance collaboration among shippers, carriers and forwarders
(Baker, 2021b).
Overall, since early 2020, when the pandemic rst hit, the narrative for container shipping has thus shifted
dramatically. Carriers have been able to manage ship capacity so as to mitigate initial disruptions but port
and landside businesses required more time to adjust their yard and gate operations which often led to
inefciencies in terminal operations, such as the management of container stacking (Notteboom, Pallis
and Rodrigue, 2021).
Shippers are caught in this storm and need to better manage their supply chains and adapt to lower
capacity (Drewry Maritime Research, 2021d). They should adopt proactive supply chain strategies
that anticipate delays and promote visibility. While some carriers and ports (e.g., Maersk and DP
World) are emerging as end-to-end integrators, they should spare no effort to address congestion
and service reliability and ensure that maritime trade is not undermined by the current logistical
hurdles.
Meanwhile in mid-2021 pressure in container shipping continued unabated, with shippers increasingly
worrying about the reliability of services and their ability to secure space for their shipments. On 9 July 2021,
the President of the United States signed an executive order that encourages the United States Federal
Maritime Commission “to ensure vigorous enforcement against shippers charging American exporters
exorbitant charges” (Holt, 2021). Since then, Federal maritime regulators have ordered eight container
lines to provide details showing how congestion port surcharges meet legal and regulatory requirements
(Szakonyi, 2021).
5. Container port trafc disrupted as congestion heightens and shipping
adjusts operations and schedules
For ports, the years 2020 and 2021 were highly disruptive. In 2020, global container port throughput
fell by 1.2 per cent, to 815.6 million TEU (table 1.10). For 2021, however, volume is projected to grow
by 10.1 per cent as the global economy and trade recover, along with increasing optimism arising from the
vaccine rollout (Drewry Maritime Research, 2021e). But some ports fared better than others. Antwerp, for
example, fared much better in the COVID-19 crisis than it had during the 2009 downturn.
In 2020, Asia, with nearly two-thirds of the
throughput, maintained its position as the global
hub for container port trafc (gure 1.10). Europe
was the second-largest container port handling
region in 2020 (14.4 per cent). Together, North
America (7.5 per cent), Latin America and the
Caribbean (7.2 per cent), Africa (4.0 per cent),
and Oceania (1.6 per cent) accounted for the
remaining shares. North America and Asia
beneted from the swift trade rebound in the
second half of 2020, but recurrent virus outbreaks
and pandemic containment measures, among
other factors were a drag on container port trafc
in Europe and other regions.
China’s dominance is also evident from data on
the world’s top 20 ports around half of which are
in China (gure 1.11). In 2020, cargo throughput
in these leading ports declined, though there
were some exceptions, notably Tanjung Pelepas
with growth of 7.7 per cent and Long Beach
which beneted from a surge in the United States
containerized imports. In the fourth quarter
of 2020, volumes at Long Beach rose 23 per cent.
Los Angeles also enjoyed 22 per cent growth in
the last quarter of the year but still closed the year
down 1.3. per cent.
Table 1.10 World container port
throughput by region,
2019–2020
(million TEU and annual
percentage change)
2019 2020 2019–2020
Asia 534.8 532.7 -0.4%
Africa 32.5 32.5 0.0%
Latin America and the Caribbean 60.1 59.0 -1.8%
Europe 122.6 117.4 -4.2%
North America 62.4 61.2 -1.9%
Oceania 12.9 12.8 -0.8%
World Total 825.3 815.6 -1.2%
Source: UNCTAD secretariat based on data collected by
various sources, including Lloyd's List Intelligence, MDS
Transmodal, Dynamar B. V., Drewry Maritime Research,
Professor Jean-Paul Rodrigue, Hofstra University, as well
as information published on relevant port authorities and
container port terminals websites. In some cases, data
was estimated based on liner shipping connectivity data at
country level.
Note: Data reported in the format available. In some cases,
country volumes were estimated based on secondary source
information and reported growth rates. Country totals may
conceal the fact that minor ports may not be included.
Therefore, in some cases, data in the table may differ from
actual gures.
REVIEW OF MARITIME TRANSPORT 2021
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Nearly all leading Chinese ports increased their throughput. Shanghai saw slow growth but remained the
world’s leading port, while growth in Tianjin was 6.4 per cent and Qingdao 4.8 per cent. In Europe and
North America port performance varied. Outside this group, the fall in throughput in Colombo was caused
by pandemic-induced labour shortages and limited capacity on mainline vessels. Beirut continued to lose
trafc to Tripoli following the 2020 port explosion (Drewry Maritime Research, 2021f).
New York (+1.3 per cent) and Antwerp (+0.8 per cent) have been more resilient, while Kaohsiung
(-7.7 per cent) and Hamburg (-6.5 per cent) were severely hit. Others such the ports of Dubai (-4.3 per cent),
Rotterdam (-3.4 per cent), Klang (-2.9 per cent), and Busan (-0.9 per cent), recorded drops in volumes
handled.
The COVID-19 pandemic was a big disruptor that has created challenges but also opportunities for
the sector. Digitalization and environmental sustainability have become key pillars of the post-pandemic
recovery. Industry and governments are considering opportunities that may arise from ‘building back
better’. For example, in 2021 COSCO Shipping Ports launched a green nance framework to drive green
Source: UNCTAD secretariat calculations, derived from table 1.10.
0 10 20 30 40 50 60 70
Asia
Africa
Latin America
and the Caribbean
Europe
North America
Oceania
2020 2019
Figure 1.10 World container port throughput by region, 2019–2020
(percentage share in total TEU)
Source: UNCTAD based on data published on Hamburg Port Authority website (www.hafen-hamburg.de/en/statistics/top-
20-container-ports), accessed July 2021.
-10
-8
-6
-4
-2
0
2
4
6
8
10
0
5
10
15
20
25
30
35
40
45
50
Shanghai
Singapore
Ningbo-Zhoushan
Shenzhen
Guangzhou
Qingdao
Busan
Tianjin
Hong Kong
Rotterdam
Dubai
Klang
Antwerp
Xiamen
Tanjung Pelepas
Kaohsiung
Los Angeles
Hamburg
Long Beach
New York
Million TEU 2019 - left axis Million TEU 2020 left axis
Percentage change 2019-2020 – right axis
Figure 1.11 Leading 20 global container ports, 2019–2020
(TEU, percentage annual change)
1. International maritime trade and port trafc
19
and smart port development (Greenport, 2021a). Elsewhere, the European Union granted €25 million to
a consortium led by the Port of Rotterdam to run pilot projects on sustainable and smart logistics. Project
partners will also design and implement digitalization and automation solutions for the energy transition
(Greenport, 2021b). Meanwhile, the United States’ $1.9-trillion spending plan includes funds earmarked
for transport infrastructure and resilience, including ports (Port Strategy, 2021).
B. OUTLOOK AND LONGER-TERM TRENDS
As the global economy moves towards its next normal, there are optimistic signs for maritime trade. Some
of the pandemic’s impacts and legacies could linger, but the short-term outlook is generally positive.
1. A positive short-term outlook but with risks and uncertainties
Global economic prospects improved by late 2020, supported by vaccine rollout in advanced regions,
the possibility of additional spending in some major economies, and the easing of containment measures
and restrictions in some parts of the world. While emerging trends are encouraging, uncertainty remains
as the sustainability of the nascent, fragile and divergent recovery depends on the pandemic's path and
a broader rollout of vaccines worldwide.
UNCTAD projects shipping volumes to increase by 4.3 per cent in 2021, and exceed their 2019 levels
(table 1.11). Containerized trade is expected to grow by 7.7 per cent. Over the 2022–2026 period, total
maritime trade is expected to grow 2.4 per cent annually – compared with 2.9 per cent over the previous
two decades. Maritime trade is projected to moderate along with GDP (IMF, 2021).
The intensied cost pressures, inefciencies, and vulnerabilities in the maritime supply chain, driven
primarily by the COVID-19 disruption and its knock-on effects on shipping and ports, could continue
to disrupt supply chains, raising both production
costs and consumption prices. But these
pressures are expected to ease when global
demand patterns are normalized, manufacturing
capacity comes online, and logistical assets are
optimized to improve the balance between supply
and demand.
A further concern is trade protectionism and
trade tensions between China and its trading
partners, including the United States and
Australia. Governments may also resort to trade
protectionism to mitigate discontent and social
tensions arising from the impact of COVID-19 on
employment and social inequalities.
On the upside, the recovery should be driven
by scal support measures, though there are
uncertainty regarding the duration of current
stimulus packages and government spending
while developing countries continue to be under
pressure – having limited scal policy space and
low access to vaccines.
Other positive trends include the signing
in 2020 of the Regional Comprehensive Economic
Partnership and the coming into force of the
African Continental Free Trade Area (AfCFTA)
in 2021. UNCTAD expects the AfCFTA to boost
intra-African trade by about 33 per cent and
cut Africa's trade decit by 51 per cent (Saygili,
Peters, Knebel, 2018). AfCFTA also has important
implications for maritime transport and services
trade (box 1).
Table 1.11 International maritime trade
developments forecasts,
2021–2026
(annual percentage change)
Annual
Growth Years
Seaborne
trade ows
UNCTAD
4.3 2021
Total seaborne
trade volume
3.2 2022
2.4 2023
2.3 2024
2.3 2025
2.2 2026
UNCTAD
7.7 2021
Containerized
trade volume
5.9 2022
4.7 2023
4.4 2024
4.2 2025
4.1 2026
Clarksons Research,
Seaborne Trade
Monitor, June 2021
4.3 2021
Total seaborne
trade volume
3.1 2022
5.9 2021
Containerized
trade volume
4.0 2022
Source: UNCTAD secretariat based on own calculations and
forecasts published by the indicated institutions and data
providers.
Note: Projections are based on the estimated elasticities of
maritime trade with respect to world GDP, export volumes,
investment share in GDP for the 1990-2020 period as well
as monthly seaborne trade data published by Clarksons
Research.
REVIEW OF MARITIME TRANSPORT 2021
20
2. Long-term outlook shaped by structural factors and lingering effects
of the pandemic
The long-term outlook will be shaped by a range of continuing structural trends. These include changing
patterns of globalization, the drive for more-resilient supply chains, changes in consumer spending and
the growth of ecommerce, the need for environmental sustainability, the global energy transition, and the
continuing uptake of digitalization.
Shift in globalization patterns
Even before the COVID-19 pandemic, global value chains were being increasingly shaped by rising demand
and new industry capabilities in the developing regions, and growth in automation and robotics, the shift
from tradeable goods to service, and limited growth in vertical specialization and global fragmentation
Box 1
Implications of AfCFTA for maritime transport in Africa
The African Continental Free Trade Area (AfCFTA) agreement entered into force in 2019, and its
implementation commenced in 2021. It aims to increase intra-African trade by eliminating import
duties, and to double this trade if non-tariff barriers are also reduced. Adequate transport infrastructure
and services in Africa, including maritime transport connectivity, are critical to the full realization of
the benets of AfCFTA. Moreover, the AfCFTA is expected to increase demand for different modes
of transport, including maritime transport, which in turn will increase investment requirements for
infrastructure and equipment – ports and vessels in the case of maritime transport.
The Services Protocol of AfCFTA sets out principles for enhanced continental market access and
services- sector liberalization. The ve priority sectors identied include transport, business services,
communication services, nancial services, and tourism. AfCFTA could therefore be a game-changer for
investment in transport infrastructure and services. Maritime transport infrastructure in Africa includes
several ports across the continent which landlocked countries access through road and rail corridors.
Some of these ports are congested and located in the middle of cities.
A study by the Economic Commission for Africa, with a time horizon of 2030, provides a forecast of the
requirements for transport infrastructure, services, and equipment as a result of the implementation of
AfCFTA. The analysis shows that in 2019, maritime transport accounted for almost a quarter of total
intra-African freight transport demand (22 per cent). It indicates that the number of tons transported
by vessels with the implementation of AfCFTA would increase from 58 million to 132 million tons.
The total maritime transport share is expected to increase only by 0.6 per cent, from 22.1 per cent to
22.7 per cent in the scenario where AfCFTA and priority infrastructure projects are implemented, and
by 1.5 per cent in the scenario where AfCFTA is implemented but priority infrastructure projects are not
implemented. If priority infrastructure projects are implemented some trafc is expected to shift to rail
and road as these projects focus mainly on road and rail transport.
The study shows that countries in different subregions of the continent will experience a surge in
trafc through their ports by 2030 owing to AfCFTA, including Gabon (Central Africa), Ghana, Gambia
(West Africa), Somalia, Comoros, Mauritius (East Africa) and Mozambique, Madagascar, Namibia
(Southern Africa). The study estimates the required size of Africa's maritime transport eet due to the
implementation of AfCFTA. In this regard, in the scenario where AfCFTA is not implemented and no
priority infrastructure projects are implemented by 2030 compared to 2019 (the baseline), the size of
the eet is estimated to increase by 43 per cent for bulk and 40 per cent for container cargo. However,
compared to 2019 and to satisfy intra-African trade demand, the size of the eet for bulk and container
cargo is estimated to increase by 200 per cent if AfCFTA is implemented and no infrastructure projects
are executed. In the scenario where AfCFTA and the different infrastructure projects are implemented
by 2030, the eet is estimated to increase by 188 per cent for bulk and 180 per cent for container
cargo.
The most signicant vessel demand to support trade ows resulting from AfCFTA, compared to the
baseline of 2019, is within North Africa (35 per cent of the total vessel eet), from North Africa to East
Africa (15 per cent), and from North Africa to West Africa (11 per cent). It is worth noting that the second
priority action plan of the Programme for Infrastructure Development in Africa (PIDA PAP II), endorsed
by the Summit of African Union Heads of State in February 2021, and to be implemented between 2021
and 2030, recognizes the importance of maritime transport to Africa's socio-economic development
and regional integration. In this regard, PIDA PAP II includes the following projects:
• Maritime connectivity between the islands of Comoros;
• Construction of petroleum jetty and associated storage facilities at Albion, Mauritius; and
• Praia-Dakar Shipping and Maritime Services Project.
Source: Economic Commission for Africa (forthcoming). Implications of the African Continental Free Trade Area
for Demand of Transport Infrastructure and Services. Addis Ababa, Ethiopia.
1. International maritime trade and port trafc
21
of production that reect maturing value chains in China and the United States. The hyper-globalization
of the late-1990s and early-2000s appears to be decelerating. Enterprises, particularly in automotive,
computer and electronics industries, are aiming to locate production closer to demand and consumption
markets. Developing countries are increasingly consuming their own products and reducing their imports
of intermediate goods while creating more comprehensive domestic supply chains (UNCTAD, 2019).
Decisions will also be shaped by recent episodes of shipping network disruption (Suez Canal blockage,
surge in COVID-19 cases in South China), chip shortages that close car manufacturing, shipping delays
and soaring costs. Existing shifts in globalization patterns can be expected to accelerate (Yap and
Huan, 2018).
Some countries are also aiming for greater self-reliance particularly in goods considered to be strategically
valuable, such as pharmaceuticals and medical equipment, and new technology (Fitch Solutions, 2020).
This is illustrated by initiatives such as Made in China 2025, Buy American, Strategic Autonomy in Europe,
and Self-sufcient India – as well as incentives to move supply chains closer to home in Japan, the
Republic of Korea and Taiwan Province of China.
In the United States, the new administration has already indicated its intention to build supply chains that
rely less on China for strategically important products (Wood and Helfgott, 2021). And in China the recent
14
th
Five-Year Plan is expected to boost domestic consumption and expand the domestic market for
China's manufactured goods. It also seeks to achieve technological self-sufciency and expand exports
(Fitch Solutions, 2021). Overall, the plan is expected to benet shipping while promoting energy, grains,
minor bulk commodities, and chemicals imports.
While the pandemic could deepen pre-existing changes to globalization patterns, it has also reafrmed
China's important role in sustaining international trade. With around one-third of global trade, China is
showing the resilience and determination to remain the ‘factory of the world’. West and South Asia, South
America, Western Europe and the Mediterranean regions recorded export growth in the fourth quarter
of 2020, although of a lower scale (Teodoro, 2021).
Since 2018 the United States has increased tariffs, but rather than inducing a return of production to the
United States this tended to shift manufacturing within Asia. In 2020 Cambodia, for example, took over a
large part of China's market share in United States imports of Christmas lights. During the same period,
exports of bikes to the United States from Cambodia jumped by 478 per cent and from Taiwan Province
of China by 30 per cent. Tariffs have not provoked a large-scale nearshoring and have had little impact
on ton-miles as containerized exports from China or neighbouring East Asian countries hardly affect the
distances travelled to the United States (Sand, 2020b).
Nevertheless, while China continues to lead world exports its predominance can be expected to moderate
as its economy matures and relies more on domestic than external demand. This implies that imports in
value terms are likely to increase faster than exports (Nicita and Razo, 2021), suggesting potential shifts in
shipping patterns and trade, and changes in maritime transport demand.
Nevertheless an outright reversal of globalization will be difcult. Global supply chains are the product
of years of investment, relationship-building, and knowledge acquisition, and China's large production
and logistical capacity and economies of scale are difcult to replace. This was demonstrated by the
increased imports of electronics in 2020, which triggered a shift of some production and sourcing back
to China. And while imports of machinery and electrical equipment, and computers from Mexico may
have increased over recent years, often components are exported from China to Mexico for assembly in
manufacturing facilities near the United States border (Cassidy, 2021a).
It may be fairly straightforward to change labour-intensive and low-value supply chains. Apparel and
textiles, for example, are already moving away from China to Bangladesh, Viet Nam, and Ethiopia. Turkey
is also a major producer of clothing, shipping goods to Europe. But it is more complex for mid- and
high-value-added manufacturing. For semiconductors, for example, one study estimated that only 9
to 19 per cent of trade ows could potentially shift. For car exports the estimate was 15 to 20 per cent
though for pharmaceuticals it was 38 to 60 per cent (Lund et al., 2020).
Some companies are nevertheless aiming to diversify production sites, with a ‘China +1’ strategy
and will continue to look for alternative sources which will require adjusting networks and inventory
management strategies and transport and shipping routes. This is resulting in new trade ows as
observed in the case of China-Mexico-United States, or from other countries in East Asia to the United
States. Morocco, and Central and Eastern Europe can be expected to strengthen their position as
new suppliers to the North American and European consumer market, for cars, electronics, and heavy
REVIEW OF MARITIME TRANSPORT 2021
22
machinery (Fitch Solutions, 2020). In the long term, automation could make reshoring and nearshoring
more economically viable.
The pandemic and its fallout are likely to hasten this transition, but the outcome will likely be a blended
approach, balancing localized and global sourcing depending on product and geography (UNCTAD, 2021c).
These trends have major implications for maritime transport, as carriers need to redene distances and
routes and offer more exible shipping services. A reconguration of supply chains has implications for
vessels, sizes, ports of call, and distance travelled.
Mainstreaming supply chain resilience, risk assessment and
preparedness
Over the years, global supply chains have become more sophisticated and extensively interlinked. They
have also become vulnerable to wide-ranging risks, with more potential points of failure. This became
clear from the COVID-19 disruption which tested existing supply chains and logistics networks and their
underlying business models.
Aiming for greater supply chain resilience will mean diversifying business partners and suppliers,
improving forecasting of demand and volumes, ensuring better management of inventories and safety
stocks, and carefully rethinking the trade-offs between just-in-time and just-in-case supply chain
business models (Cassidy, 2021b). While responses may be inuenced by sentiment at the height
of the pandemic, over 90 per cent of the supply chain executives that had responded to a May 2020
survey, were planning to enhance resilience (Lund et al., 2020). This can be achieved, for example by
allowing for redundancy across suppliers, nearshoring, regionalizing their supply chains, dual-sourcing
raw materials, backing up production sites, increasing inventory of critical products, strengthening
supply-chain risk management, improving end-to-end transparency, and minimizing exposure to
cybersecurity and other shocks.
Investors, rating agencies, and regulators increasingly expect ports and shipping companies to integrate
risks into their plans (Kim and Ross, 2019). For this they will need to devise and implement risk management
and business continuity strategies, and ensure visibility across extended supply networks, while building
strong relationships with key partners, including shippers and inland transport providers. To this end, they
can use new technologies that enable end-to-end visibility, collaboration, responsiveness, agility, and
optimization of operations (Koch, Vickers, and Ritzmann, 2020). It will also be important to support the
digitalization of smaller ports and inland terminals (Schwerdtfeger, 2021a).
Any effort to strengthen the resilience of the maritime supply chain would be in vain if the human resources
and labour dimension is not addressed as a matter of priority. The pandemic has underscored the critical
role of seafarers. Smooth delivery of trade by shipping and efcient handling of cargo by ports depend
mainly on their labour forces. Crew members need to rotate at the end of their contract periods. At the
height of the disruption, hundreds of thousands of seafarers could not be repatriated, while an equivalent
number were stuck at home and could not join their ships and provide for their families. As indicated
in Chapter 5, the shipping industry has asked that vaccines be secured and allocated specically for
seafarers. In May 2021, the International Maritime Organization called on Member States to support the
fair global distribution of COVID-19 vaccines.
In support of these efforts, Singapore, as a global hub port and international maritime centre, is considering
providing vaccines to crews on vessels calling at its port (Ang, 2021). Elsewhere, in June 2021 the Royal
Association of Netherlands Shipowners launched the Vaccination Programme for Seafarers.
The growth in ecommerce and change in consumption patterns
Pandemic-induced shifts in consumption and shopping habits together with digitalization have
accelerated growth in ecommerce. In 2019, around 16 per cent of retail sales were online, a proportion
which grew in 2020 to 19 per cent (UNCTAD, 2021b). UNCTAD estimates the global ecommerce market
in 2019 at $27 trillion, equivalent to 30 per cent of GDP. Ecommerce fullment provides new business
opportunities – in particular for warehousing and distribution facilities at seaports, inland rail hubs, and
near airports. This can reduce supply chain uncertainties enabling retailers to keep more inventory at
hand. Retailers are also seeking properties with large container yards to store containers on chassis
(Mongelluzzo, 2021b).
Ports close to, or well-connected to, large population centres could tap this business potential (Drewry
Maritime Research, 2021d). Already, some container shipping companies and ports are positioning
themselves to emerge as door-to-door service integrators (e.g., Maersk and DP World). Container shipping
1. International maritime trade and port trafc
23
companies have recently invested in other parts of the supply chain, including warehousing, aircraft, and
distribution (Steer and Dempsey, 2021).
The imperative for environmental sustainability and the energy transition
The COVID-19 pandemic has increased the focus on environmental sustainability. Maritime transport is
facing growing pressure to decarbonize and enable an effective energy transition – both as a transporter
and user of energy. Fossil fuels make up over one-third of global maritime trade but demand for these fuels
is expected to fall, with clear implications for tankers and coal carriers, while demand is likely to increase
for ships transporting hydrogen or ammonia.
At the same time ships are also expected to shift their own fuel mix and use new ship designs to cut fossil
fuel consumption and reduce carbon emissions. To mitigate these additional costs, shipping is set to rely
on technological and operational adjustments.
Ports are also expected to play their part and become smart and green. Some governments have
earmarked some of the pandemic-induced stimulus packages for smart and green maritime transport
projects.
Acceleration in digitalization
Port authorities, shippers, and freight forwarders that had invested in digital infrastructure and
connectivity and promoted data exchange navigated more smoothly through the COVID-19 disruption
(Schewerdtfeger, 2021a). But this also widened the digital divide between developed and developing
regions. Countries that were less advanced were less able to mitigate the pandemic and diversify their
economies.
UNCTAD expects the fast shift towards digitalization to strengthen the market positions of a few digital
mega platforms. If left unaddressed, the yawning gap between under-connected and hyper-digitalized
countries will widen, exacerbating inequalities (UNCTAD, 2020b).
Investing in digital infrastructure is crucial for information sharing and effective resource planning.
Automation and smart technologies, including articial intelligence, can solve many of the challenges
faced by the industry, such as how to process more cargo in an environmentally friendly manner
(Schewerdtfeger, 2021c). Developing countries should be supported in their efforts to implement digital
tools to advance environmental sustainability, economic efciency, and resilience.
C. POLICY CONSIDERATIONS AND ACTION AREAS
Against the backdrop of an already more challenging global geopolitical and trade policy landscape,
the COVID-19 disruption shone light on the vulnerabilities of the global supply chains, including their
underlying maritime transportation networks. Governments are forging ahead with ‘build back better’
policies and initiatives to ensure that risks, environmental sustainability, and technology are integrated
as pre-requisites for a sustainable and resilient post-pandemic world. While maritime trade is currently in
recovery mode, the pandemic is having a lasting impact. The recovery is uneven and fragile and some
pre-existing trends are being amplied or accelerated.
Maritime transport and trade are at the forefront of these trends, and the following priority actions areas
will help the sector navigate through the transition:
• Vaccination – Strengthen international efforts to tackle the pandemic and ensure wider vaccination
across regions and within the shipping industry, with vaccination plans for seafarers topping the
priority list. A two-paced vaccine approach widening the gap between countries, populations
and economic sectors will perpetuate asynchronous recovery patterns, which may have proved
helpful in preventing a protracted downturn when the pandemic hit but raises concerns about
the sustainability of the recovery. A multi-paced vaccine-led recovery entails risks, and would
exacerbate inequalities which could culminate in social tensions and disruptions. The International
Monetary Fund estimates that $50 billion is required to end the pandemic across the world and
ensure that vaccines are accessible to developing countries. The dividend for the world economy
extends beyond saving lives, as investing in global vaccination plans could accelerate economic
recovery and generate some $9 trillion in additional global output by 2025 (Georgieva et al., 2021).
• Digital divide – Help countries and their maritime industries to catch up and close the digital gap.
The pandemic may have exacerbated the digital divide between developed and developing regions
REVIEW OF MARITIME TRANSPORT 2021
24
and between the hyperconnected and weakly connected. Closing the gap is important and could
form part of relevant post-pandemic recovery plans and other support measures.
• Facilitate trade – The wheels of trade and shipping kept the world going when the pandemic hit
and helped lift the world economy. Going forward, trade should be further enabled by adopting
supportive policy measures that minimize trade restrictiveness and protectionist tendencies.
• Fiscal support – Carefully time the winding up and withdrawal of scal support measures, to avoid a
premature withdrawal that sties the nascent recovery. For most developing countries where scal
measures similar to those in developed regions could not be deployed, international cooperation
and targeted aids are becoming crucial.
• Stakeholder collaboration – Stakeholders in the maritime supply chain, including carriers, ports,
inland transport providers and shippers, should work together to ensure that maritime transport
remains a reliable, predictable, and efcient mode of transport that links supply chains and enables
trade. And to ensure visibility and transparency they should ensure enhanced communications, and
sharing of data and information.
• Ecommerce – Shipping and ports should explore the business opportunities arising from growth
in ecommerce, accelerated digitalization and the growing environmental sustainability imperative,
and take these opportunities to promote protability while also providing quality services that meet
customer and supply chain requirements.
• Sustainability – Expand efforts to promote environmental sustainability as part of the various
stimulus packages and post-pandemic recovery plans. Support for decarbonization under the IMO
framework should not waver, while ensuring that the implications for developing countries are well
understood.
• Energy transition – Promote investment in eets, technologies, and infrastructure, including ports
and hinterland connections, to support a maritime supply chain energy transition and environmental
sustainability.
• Resilience building and future proong – Prioritize preparedness, risk management, digitalization,
environmental sustainability, and improving data and forecasting. End-to-end visibility will increase
resilience while enhancing efciency and productivity gains. A portfolio of measures can improve
resilience including redundancy across suppliers, dual-sourcing, backing up production sites, and
managing inventory, and stocks, along with risk management, and end-to-end transparency. Hybrid
solutions can also be envisaged, involving extended supply chains with an element of nearshoring
and reshoring.
1. International maritime trade and port trafc
25
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2
This chapter reviews the supply of maritime transport,
covering the world eet, shipping companies, and port
services, and then adding insights from the UNCTAD
TrainForTrade Port Management Programme.
A. The world eet – This section examines the growth of the
world eet and changes to its structure and age. It also covers
parts of the maritime supply chain, such as shipbuilding, ship
recycling, ship ownership and ship registration. It nds that at
the beginning of 2021 the demand for shipping services was
exceeding supply, resulting in a surge in orders for new ships
and more activity in the second-hand market.
B. Regulation of shipping – This section examines regulatory
changes, in particular decarbonization targets. It explores the
implications for the shipping industry and for shipping-related
operations, fuel usage and technology. Adapting to these
changes will require signicant investment at a time of great
uncertainty.
C. Port services – This section explains how the pandemic
has induced a rethink of business resilience for ports. It
also covers their strategies for capitalizing on emerging
opportunities, notably ecommerce and greener industrial
activities.
D. The impact of COVID-19 – Using data from the UNCTAD
TrainForTrade port network, this section examines the impact
of the pandemic on nancial performance and on vessel and
cargo operations.
Maritime transport
and infrastructure
THE WORLD FLEET
of 100 gross tons and above,
equivalent to 2,134,639,907 dwt
of capacity
SHIPPING COMPANIES AND OPERATIONS
Maritime transport
services and
infrastructure supply
In early 2021,
the world eet totalled
99,800 ships
PORT SERVICES AND INFRASTRUCTURE SUPPLY
Ships between
The global shipping
eet grew by
+3%
in the 12 months prior
to 1 January 2021
represented the highest
proportion of the eet
carrying capacity
5–9 years old
Ship deliveries
declined by
Decarbonization
targets
Trade growth
Scaling up investment
to expand the eet
Retrotting or replacing
the existing eet
Since 2020, ports resilience
and adaptive capacity have
been tested:
Financial performance
Congestion
Equipment shortages
Supply chain disruption
New opportunities from
the COVID-19 crisis
E-commerce,
smart logistic hubs
and intermodal
connections
Greener
industrial port
activities
Potential changes from the Green Transition
Ship costs
Ship travel
distance
Fleet distribution Routing patterns
Use of
different
types
of vessels
Maritime
logistics
costs
-12 %
in 2020
Adapting maritime transport supply
2. Maritime transport and infrastructure
31
A. THE WORLD FLEET
1. Fleet structure, age, and vessel
size
Ships are getting bigger, though
with fewer new ships the eet is
ageing
In the 12 months to 1 January 2021, the global
commercial shipping eet grew by 3 per cent –
to 99,800 ships of 100 gross tons and above,
equivalent to 2,134,639,907 dwt of capacity
(table 2.1). But as indicated in gure 2.1, from a
peak of 11 per cent in 2011 this growth rate has
slowed.
An increasingly important concern is the ageing
of the eet, since older ships are generally less
efcient and generate higher emissions. At the
beginning of 2021, around 30 per cent of the
carrying capacity of the global eet was in ships
of between ve and nine years old (table 2.2).
As indicated in gure 2.2, since 2017 this age
cohort has represented the highest proportion
of capacity, but its proportion and that for
younger vessels has been falling, while that for
vessels of 10 to 14 years old has steadily been
rising.
The age distribution varies, however, between
different economies (gure 2.3). The oldest
ships are generally those in the least developed
countries (LDCs), where close to 30 per cent
are more than 20 years old. Compared to the
developing group, or the developed countries,
the LDCs also have a higher proportion of ships
of 15 to 19 years old.
Source: UNCTAD calculations, based on data from Clarksons
Research.
Notes: Propelled seagoing merchant vessels of 100 gross
tons and above, at 1 January.
Dead-weight tons for individual vessels have been estimated.
Principal types 2020 2021
Percentage
change 2021
over 2020
Bulk carriers 879 725 913 032 3.79%
42.47% 42.77%
Oil tankers 601 342 619 148 2.96%
29.03% 29.00%
Container ships 274 973 281 784 2.48%
13.27% 13.20%
Other types of ship: 238 705 243 922 2.19%
11.52% 11.43%
Offshore supply 84 049 84 094 0.05%
4.06% 3.94%
Gas carriers 73 685 77 455 5.12%
3.56% 3.63%
Chemical tankers 47 480 48 858 2.90%
2.29% 2.29%
Other/not available 25 500 25 407 -0.36%
1.23% 1.19%
Ferries and
passenger ships
7 992 8 109 1.46%
0.39% 0.38%
General cargo ships 76 893 76 754 -0.18%
3.71% 3.60%
World total 2 071 638 2 134 640 3.04%
Table 2.1 World eet by principal
vessel type, 2020–2021
(thousand dead-weight tons
and percentage change)
Source: UNCTAD calculations, based on data from Clarksons Research.
1.1
2.4
2.4
2.6
5.1
6.3
8.0
7.2
6.7
7.0
11.1
8.4
6.3
3.7
3.5
3.3
3.1
3.7
2.7
4.1
3.0
0
2
4
6
8
10
12
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Percentage
Figure 2.1 Annual growth rate of world eet, dead-weight tonnage, 2000–2020
(percentage)
THE WORLD FLEET
of 100 gross tons and above,
equivalent to 2,134,639,907 dwt
of capacity
SHIPPING COMPANIES AND OPERATIONS
Maritime transport
services and
infrastructure supply
In early 2021,
the world eet totalled
99,800 ships
PORT SERVICES AND INFRASTRUCTURE SUPPLY
Ships between
The global shipping
eet grew by
+3%
in the 12 months prior
to 1 January 2021
represented the highest
proportion of the eet
carrying capacity
5–9 years old
Ship deliveries
declined by
Decarbonization
targets
Trade growth
Scaling up investment
to expand the eet
Retrotting or replacing
the existing eet
Since 2020, ports resilience
and adaptive capacity have
been tested:
Financial performance
Congestion
Equipment shortages
Supply chain disruption
New opportunities from
the COVID-19 crisis
E-commerce,
smart logistic hubs
and intermodal
connections
Greener
industrial port
activities
Potential changes from the Green Transition
Ship costs
Ship travel
distance
Fleet distribution Routing patterns
Use of
different
types
of vessels
Maritime
logistics
costs
-12 %
in 2020
Adapting maritime transport supply
REVIEW OF MARITIME TRANSPORT 2021
32
Vessel type, country grouping by ag
of registration and indicator
Years Average age
0–4 5–9 10–14 15–19
More
than 20
2021 2020
World
Bulk
carriers
Percentage of total ships 18 37 24 10 10 10.6 10.2
Percentage of dead-weight tonnage 22 40 23 9 6 9.5 9.3
Average vessel size (dead-weight tonnage) 90 447 78 409 68 583 68 087 46 623 NA NA
Container
ships
Percentage of total ships 14 19.21 32 17 17 13.2 12.7
Percentage of dead-weight tonnage 20 29 29 14 7 10.4 9.9
Average vessel size (dead-weight tonnage) 74 632 78 802 46 897 42 345 21 975 NA NA
General
cargo
Percentage of total ships 5 10 16 9 59 27.1 26.3
Percentage of dead-weight tonnage 8 20 23 10 40 19.9 19.3
Average vessel size (dead-weight tonnage) 5 992 7 493 5 494 4 372 2 660 NA NA
Oil tankers Percentage of total ships 14 17 21 13 35 19.5 19
Percentage of dead-weight tonnage 25 21 28 19 8. 10.9 10.4
Average vessel size (dead-weight tonnage) 96 122 65 148 72 208 80 802 12 346 NA NA
Other
types of
ships
Percentage of total ships 10 17 17 9 47 23.6 23.0
Percentage of dead-weight tonnage 20 16 23 11 30
16.1 15.8
Average vessel size (dead-weight tonnage) 9 236 4 562 6 524 5 953 3 014 NA NA
All ships Percentage of total ships 11 18 19 10 42 21.6 21.1
Percentage of dead-weight tonnage 22 29 25 13 11 11.2 10.80
Average vessel size (dead-weight tonnage) 43 364 34 175 28 112 27 809 5 505 NA NA
Developing economies (all ships)
Percentage of total ships 10 20 19 10 41 20.8 20.2
Percentage of dead-weight tonnage 21 29 22 13 15 11.9 11.6
Average vessel size (dead-weight tonnage) 33 788 24 295 18 871 21 144 6 190 NA NA
Developed economies (all ships)
Percentage of total ships 12 17 20 10 40 21.3 20.8
Percentage of dead-weight tonnage 23 30 28 13 7 10.5 10.2
Average vessel size (dead-weight tonnage) 54 908 50 000 39 696 35 466 5 132 NA NA
Small Islands Developing States (all ships)
Percentage of total ships 6 8 10 8 68 30.9 30.3
Percentage of dead-weight tonnage 3 30 18 20 30 17.5 17.8
Average vessel size (dead-weight tonnage) 2 009 16 865 8 077 11 326 2 036 NA NA
Least developed countries (all ships)
Percentage of total ships 12 13 8 6 61 28.6 28.6
Percentage of dead-weight tonnage 9 19 25 18 29 17.0 16.5
Average vessel size (dead-weight tonnage) 7 551 15 032 33 414 31 782 4 956 NA
NA
Table 2.2 Age distribution of world merchant eet by vessel type,
2021 and average age 2020–2021
(percentage and average vessel size)
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing vessels of 100 gross tons and above, as at 1 January.
Dead-weight tons for individual vessels have been estimated.
The LDC and SIDS country grouping are based on the denitions of the Ofce of the High Representative for the Least
Developed Countries, Landlocked Developing Countries and Small Island Developing States (UNOHRLLS). For more
information see: https://www.un.org/ohrlls/content/ldc-category and https://www.un.org/ohrlls/content/list-sids.
2. Maritime transport and infrastructure
33
Increasing ship sizes: what we have learnt from the Ever Given incident
Since the early 2000s, more of the world’s cargo has been carried in mega-container ships – those with a
container capacity greater than 10,000 twenty-foot equivalent units (TEU): between 2011 and 2021 their
proportion of carrying capacity rose from 6 to almost 40 per cent (gure 2.4). In the last 10 years, there
have been 97 new ships of between 15,000 and 19,990 TEU, and since 2018 74 ships of 20,000 TEU and
above (gure 2.5). These larger ships, facilitated by technological advances, have been part of broader
corporate strategies to pursue economies of scale (Sanchez, 2021). However, this has resulted in excess
supply – ‘over-tonnaging’ – in the world’s major liner routes, with greater pressure on infrastructure and
on logistics at ports.
This pressure on infrastructure was dramatically illustrated from 23 to 29 March 2021 when the Suez Canal
was blocked by the Ever Given, a container ship with a carrying capacity of 20,000 TEU. Larger ships
are more difcult to steer, and harder and more costly to rescue in cases of collisions and groundings.
In addition to safety and salvage issues, the higher risks entail higher insurance costs. (Hayden, 2015;
Lockton, 2019; Allianz, 2019; and Boulougouris, 2021).
This is a critical issue for key nodes of the global maritime transport network such as the Suez and
Panama canals, which have constrained capacities and where any disruption sends shockwaves through
global supply chains. The Ever Given incident delayed the passage of hundreds of vessels through the
canal, disrupted global trade, and exacerbated the shortage of shipping containers, leading to congestion
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above; beginning-of-year gures.
0
5
10
15
20
25
30
35
40
45
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Percentage of dead-weight tonnage
5-9 years
10-14 years
0-4 years
15-19 years
20+ years
Figure 2.2 Age distribution of the global eet, share of the global carrying capacity,
2012–2021
Source: UNCTAD calculations, based on data from Clarksons Research.
Note: The LDC and SIDS country grouping are based on the denition by UNOHRLLS. For more information see:
https://www.un.org/ohrlls/content/ldc-category and https://www.un.org/ohrlls/content/list-sids.
0
5
10
15
20
25
30
35
Developed economies
Developing economies
Small island
developing states
Least developed countries
10-14 years
15-19 years
20+ years
0-4 years
5-9 years
Percentage
Figure 2.3 Age distribution of the eet, as at beginning of 2021, per development status
groups
REVIEW OF MARITIME TRANSPORT 2021
34
in many ports and an increase in container freight rates (Hellenic Shipping News, 2021). As indicated in
gure 2.6, since 2012 these mega-vessels have been making more journeys through the Panama and
Suez canals.
Source: UNCTAD calculations, based on data from Clarksons Research.
0
10
20
30
40
50
60
70
80
90
100
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Less than
10,000 TEU
Megavessels
(more than
10,000 TEU)
Figure 2.4 Share of mega-vessels in the global container ship eet carrying capacity
by TEU, 2011–2021
(percentage)
Source: UNCTAD calculations, based on data from Clarksons Research.
0
50
100
150
200
250
300
350
400
450
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Number of ships
10,000 - 14,999 TEU
15,000 - 19,999 TEU
20,000 TEU and above
Figure 2.5 Number of mega-containerships
Source: UNCTAD calculations, based on data from VesselsValue.
Notes: In the case of the Panama Canal the mega-vessel category includes bulk carriers (Capesize), containerships (Neo-Panamax
and Post Panamax), gas carriers (Q Flex and VLGC) and oil tankers (VLCC). In the case of the Suez Canal, in addition to the ship
types mentioned before, the mega-vessel category includes an additional type of gas carrier (Q-Max) and containership (ULCV).
0
5
10
15
20
25
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Daily average of distinct journeys
Panama Canal Suez Canal
Figure 2.6 Mega-vessel distinct journeys through the Panama and Suez canals,
daily averages, from 2012 until 4 June 2021
2. Maritime transport and infrastructure
35
2. Ship ownership and registration
The principal ship-owning countries mostly ag their ships abroad
As of 1 January 2021, the top three ship-owning countries, in terms of both dead-weight tons and
the commercial value of their eets, were Greece, China, and Japan (table 2.3) (table 2.4). Over the
previous year, among the top 35 shipowners, the greatest increases in shares of carrying capacity
were in the United Arab Emirates, from 1.01 to 1.18 per cent, and Viet Nam from 0.52 to 0.59
per cent. In terms of value, the highest increases in shares of the world merchant eet value were
in Taiwan Province of China, from 1.49 to 1.86 per cent, and the Republic of Korea, from 2.77 to
3.08 per cent.
Table 2.3 Top 25 ship-owning economies, as of 1 January 2021
(millions of United States dollars)
Source: UNCTAD calculations, based on data from Clarksons Research, as of 1 January 2021 (estimated current value).
Note: Value is estimated for all commercial ships of 1,000 gross tons and above.
Country or Territory of
Ownership
Bulk
Carriers
Container
Ships
Offshore
vessels
Oil
Tankers
Ferries and
Passenger
Ships
Gas
Carriers
General
Cargo
Ships
Chemical
Tankers
Other/ not
available
Total
1 Japan 39 564 15 101 4 746 9 529 3 236 15 436 3 130 5 203 7 888 103 833
2 Greece 39 853 11 670 197 32 602 2 512 14 572 182 977 402 102 968
3 China 34 735 20 632 9 967 12 838 4 979 4 115 5 120 3 344 3 207 98 936
4 United States 3 734 1 938 15 494 5 117 51 259 1 454 1 320 1 098 791 82 206
5 Singapore 14 564 9 274 4 304 12 569 32 4 377 870 4 778 534 51 301
6 Norway 4 384 2 514 21 748 5 570 3 208 7 620 900 2 433 2 719 51 096
7 Germany 6 207 24 166 687 1 767 9 460 1 627 2 789 704 347 47 754
8 United Kingdom 4 001 7 123 10 064 3 829 5 661 5 816 791 1 354 2 239 40 878
9 China, Hong Kong SAR 11 117 12 982 73 6 288 2 387 1 114 918 269 886 36 032
10 Republic of Korea 9 123
5 363 240 5 558 433 4 791 680 1 480 2 673 30 340
11 Bermuda 5 863 2 301 5 198 5 919 8 107 297 51 27 736
12 Denmark 1 526 12 847 1 701 3 416 1 032 2 049 751 1 032 108 24 462
13 Switzerland 822 9 012 3 056 596 9 521 213 183 169 12 23 584
14 Netherlands 704 412 13 273 441 526 686 2 969 1 892 2 046 22 949
15 Taiwan Province
of China
8 145 7 372 48 1 483 74 363 563 148 107 18 304
16 Italy 1 116 6 2 441 1 866 9 475 256 1 801 418 621 18 000
17 Brazil 179 465 14 312 810 64 116 30 77 2 16 054
18 Monaco 3 390 2 004 6 381 29 3 300 26 24 15 153
19 France 374 5 325 5 183 112 1 860 476 155 132 144 13 761
20 Russian Federation 256 110 1 346 3 320 76 1 740 1 449 637 1 828 10 762
21 Turkey 3 406
1 011 677 1 269 353 131 1 793 1 156 51 9 847
22 Indonesia 1 110 1 103 1 137 2 131 2 020 565 1 174 369 51 9 659
23 Malaysia 142 110 6 748 219 19 1 811 189 150 159 9 548
24 Belgium 1 747 491 134 3 305 860 761 210 2 018 9 526
25 United Arab Emirates 1 959 469 2 858 2 361 57 544 90 621 179 9 138
Others 14 436 4 971 23 462 18 470 12 008 13 971 7 863 4 050 2 297 101 529
World total 212 455 158 771 149 093 147 764 120 282 96 110 36 470 33 026 31 384 985 356
REVIEW OF MARITIME TRANSPORT 2021
36
Table 2.4 Ownership of the world eet, ranked by carrying capacity in dead-weight tons, 2021
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing vessels of 1,000 gross tons and above, as of 1 January 2021. For the purposes of this table, second
and international registries are recorded as foreign or international registries, whereby, for example, ships belonging to owners
in the United Kingdom but registered in Gibraltar or on the Isle of Man are recorded as being under a foreign or international
ag. In addition, ships belonging to owners in Denmark and registered in the Danish International Ship Register account for
48 per cent of the Denmark-owned eet in dead-weight tonnage, and ships belonging to owners in Norway registered in the
Norwegian International Ship Register account for 28 per cent of the Norway-owned eet in dead-weight tonnage.
For a complete listing of nationally owned eets, see http://stats.unctad.org/eetownership.
Country or territory of
ownership
Number of vessels Deadweight tonnage
National
ag
Foreign
ag Total National ag Foreign ag Total
Foreign
ag as a
percentage
of total
Total as a
percentage
of world
1 Greece 642 4 063 4 705 58 067 003 315 350 152 373 417 155 84.45% 17.64%
2 China 4 887 2 431 7 318 105 657 323 138 898 420 244 555 743 56.80% 11.56%
3 Japan 914 3 115 4 029 35 107 223 206 741 103 241 848 326 85.48% 11.43%
4 Singapore 1 459 1 384 2 843 73 258 302 65 805 758 139 064 059 47.32% 6.57%
5 China, Hong Kong SAR 886 878 1 764 72 367 151 31 851 549 104 218 700 30.56% 4.92%
6 Germany 198 2 197 2 395 7 437 473 78 759 307 86 196 779 91.37% 4.07%
7 Republic of Korea 787 854 1 641 15 096 916 70 995 920 86 092 836 82.46% 4.07%
8 Norway 387 1 655 2 042 1 899 017 62 144 480 64 043 497 97.03% 3.03%
9 Bermuda 13 540 553 300 925 63 733 226 64 034 151 99.53% 3.03%
10 United Kingdom
(excl. Channel Islands)
309 1 014 1 323 7 160 493 46 524 174 53 684 667 86.66% 2.54%
11 United States of America
(incl. Puerto Rico but
excluding Virgin Islands)
790 1 020 1 810 10 395 172 44 576 019 54 971 191 81.09% 2.60%
12
Taiwan Province of China 147 867 1 014 6 998 235 46 284 542 53 282 777 86.87% 2.52%
13 Monaco 0 478 478 0 43 426 478 43 426 478 100.00% 2.05%
14 Denmark 26 902 928 47 415 42 185 673 42 233 088 99.89% 2.00%
15 Belgium 108 249 357 8 974 783 21 969 171 30 943 954 71.00% 1.46%
16 Turkey 429 1 112 1 541 5 994 812 21 970 706 27 965 518 78.56% 1.32%
17 Indonesia 2 232 89 2 321 24 139 035 2 704 715 26 843 751 10.08% 1.27%
18 Switzerland 18 396 414 928 432 25 794 797 26 723 229 96.53% 1.26%
19 India 875 195 1 070 16 396 087 10 013 434 26 409 521 37.92% 1.25%
20 United Arab Emirates 119 941 1 060 525 959 24 431 420 24 957 380 97.89% 1.18%
21 Russian Federation 1 464 322 1 786 9 184 626 14 682 694 23 867 320 61.52% 1.13%
22 Iran (Islamic Republic of) 246 8 254 18 898 257 352 889 19 251 146 1.83% 0.91%
23 Netherlands 692 515 1 207 5 577 088 13 185 003 18 762 090 70.27% 0.89%
24 Saudi Arabia 151 111 262 13 397 363 3 422 203 16 819 566 20.35% 0.79%
25 Italy 481 170 651
10 296 714 5 900 509 16 197 223 36.43% 0.77%
26 Brazil 292 91 383 4 735 593 9 120 015 13 855 608 65.82% 0.65%
27 France, metropolitan 98 327 425 1 592 919 12 004 098 13 597 017 88.28% 0.64%
28 Viet Nam 929 166 1 095 9 491 311 3 043 458 12 534 769 24.28% 0.59%
29 Cyprus 134 177 311 5 166 089 7 174 723 12 340 812 58.14% 0.58%
30 Canada 210 164 374 2 569 373 7 212 024 9 781 397 73.73% 0.46%
31 Oman 5 58 63 5 704 8 926 419 8 932 123 99.94% 0.42%
32 Malaysia 456 163 619 6 587 734 2 158 859 8 746 592 24.68% 0.41%
33 Qatar 57 69 126 1 123 717 6 145 431 7 269 149 84.54% 0.34%
34 Nigeria 198 73 271 3 517 645 3 429 887 6 947 532 49.37% 0.33%
35 Sweden 90 208 298 1 004 333 5 448 524 6 452 857 84.44% 0.30%
Subtotal, top 35 shipowners 20 729 27 002 47 731 543 900 223 1 466 373 485 2 010 273 707 72.94% 94.99%
Rest of the world unknown 3 096 3 146 6 242 37 011 088 69 116 093 106 127 181 65.13% 5.01%
World 23 825 30 148 53 973 580 911 310 1 535 489 578 2 116 400 888 72.55% 100.00%
2. Maritime transport and infrastructure
37
Rising value of the eet: a sign of condence?
The commercial value of a vessels depends on many considerations, including: size, type, builder, age,
classication status, certications, ship condition and maintenance, added technology, and engine and
fuel efciency. Values are also inuenced by prevailing conditions in shipping and nancial markets. As of
1 June 2021, the highest value was in bulk carriers at 27 per cent, followed by container ships at 25 per
cent, and tankers at 22 per cent (gure 2.7). For ships on order, the highest value was in container ships
30 per cent, followed by tankers at 20 per cent and LNG carriers at 16 per cent.
Source: UNCTAD, based on data from VesselsValue, as of 1 June 2021.
Note: Includes all vessels above 1,000 GT.
0
50
100
150
200
250
Bulk
carriers
Container
ships
Oil
tankers
LNG
carriers
Offshore
supply
vessels
Small
dry cargo
vessels
LPG
carriers
Vehicle
carriers
Roll-on
roll-off
cargo ships
Reefers
USD bn
Live Fleet On Order Fleet
Figure 2.7 Live and on-order global eet by ship type
(billions of United States dollars)
Second-hand ship prices can be quite volatile. Since the last quarter of 2020, there have, for example,
been signicant increases in the value of container ships. Between end-2020 and mid-June 2021
the Containership Secondhand Price Index increased by 71 per cent. Sales were at their highest
since 2013, reecting the demand for smaller container ships of between 5 and 15 years old (Clarksons
Research, 2021a).
There have also been signicant increases in the prices for second-hand bulk carriers. Since October 2020,
the Bulk Carrier Secondhand Price Index has been steadily increasing – during the rst half of 2021
prices of various vessel sizes aged between 5 and 10 years rose by between 25 and 50 per cent
(Miller, 2021). Higher prices reect strong short-term market condence, based on rising commodity
prices, high earnings for bulk carriers and projections for increasing global seaborne bulk trade (Clarksons
Research, 2021b). Since the beginning of 2021, sales have been at their highest for the past ve years
(Roussanoglou, 2021a).
To a great extent, selling and purchasing decisions are driven by expected future protability
(Haralambides et al. 2005). In times of tight vessel supply, higher freight rates drive up the prices of ships
(see chapter 3). The stronger market for used vessels may also signal a return in investor condence. By
buying second-hand ships, companies can expand rapidly by acquiring almost instantly available tonnage
(Sancricca, 2016).
Developing economies remain the main providers of ship registration
As of 1 January 2021, in terms of both carrying capacity (table 2.5) and commercial value of the eet,
the top three ags of registration remained those of Panama, Liberia and Marshall Islands (table 2.6).
Among the top 35 ags of registration, the greatest increases were in Viet Nam by 12.1 per cent,
from 9,868 to 10,269 thousand dwt, and in the Russian Federation, by 10.4 per cent, from 9,164 to
10,899 thousand dwt. In terms of value, the greatest increase was in Nigeria whose share of the world
merchant eet value increased from 0.50 to a 0.78 per cent.
REVIEW OF MARITIME TRANSPORT 2021
38
Table 2.5 Leading ags of registration by dead-weight tonnage, 2021
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above, as of 1 January 2021. For a complete listing of
countries, see http://stats.unctad.org/eet.
Dead-weight tons for individual vessels have been estimated.
Flag of registration
Number
of vessels
Share
of world
vessel total
(percentage)
Dead-weight
tonnage
(thousands
dead-weight
tons)
Share of
total world
dead-weight
tonnage
(percentage)
Cumulative
share of
dead-weight
tonnage
(percentage)
Average
vessel size
(dead-weight
tonnage)
Growth in
dead-weight
tonnage
2020 to 2021
1 Panama 7 980 8 344 200 16.1 16.1 43 133 4.6
2 Liberia 3 942 4 300 088 14.1 30.2 76 126 8.9
3 Marshall Islands 3 817 4 274 041 12.8 43.0 71 795 4.7
4 Hong Kong, China 2 718 3 205 092 9.6 52.6 75 457 1.8
5 Singapore 3 321 3 136 400 6.4 59.0 41 072 -2.6
6 Malta 2 137 2 116 407 5.5 64.5 54 472 0.5
7 China 6 653 7 107 583 5.0 69.5 16 171 5.0
8 Bahamas 1 323 1 74 289 3.5 73.0 56 152 -4.3
9 Greece 1 236 1 64 850 3.0 76.0 52 468 -6.0
10 Japan 5 201 5 39 091 1.8 77.9 7 516 -3.6
11 Cyprus 1 051 1 33 976 1.6 79.5 32 328 -1.6
12 Indonesia 10 427 10 28 750
1.3 80.8 2 757 6.0
13 Danish International
Register
602 1 24 735 1.2 82.0 41 089 6.9
14 Madeira 578 1 22 726 1.1 83.0 39 318 9.7
15 Norwegian Int'l Register 671 1 22 093 1.0 84.1 32 926 5.7
16 Isle of Man 319 0 22 011 1.0 85.1 68 999 -8.7
17 Iran (Islamic Republic of) 893 1 20 417 1.0 86.0 22 863 3.1
18 India 1 801 2 17 054 0.8 86.8 9 469 -2.1
19 Republic of Korea 1 904 2 15 723 0.7 87.6 8 258 4.9
20 Saudi Arabia 392 0 13 662 0.6 88.2 34 853 -1.7
21 United States 3 625 4 12 456 0.6 88.8 3 436 -0.4
22 United Kingdom 927 1 12 063 0.6 89.4 13 013 -0.2
23 Italy 1 296 1 11 255 0.5 89.9 8 685 -6.1
24 Russian Federation 2 873 3 10 899 0.5 90.4 3 794 10.4
25 Viet Nam 1 926 2 10 269 0.5 90.9 5 332 12.1
26 Malaysia 1 769 2 10 231 0.5 91.4 5 783 -1.6
27 Belgium 201
0 9 603 0.4 91.8 47 774 -4.5
28 Bermuda 147 0 8 053 0.4 92.2 54 781 3.0
29 Germany 598 1 7 618 0.4 92.6 12 740 -10.7
30 Taiwan Province of China 429 0 7 136 0.3 92.9 16 635 5.3
31 Netherlands 1 199 1 6 807 0.3 93.2 5 677 -3.4
32 Cayman Islands 160 0 6 725 0.3 93.5 42 032 0.1
33 Turkey 1 217 1 6 425 0.3 93.8 5 279 -9.2
34 Antigua and Barbuda 677 1 6 402 0.3 94.1 9 456 -3.5
35 Philippines 1 805 2 6 240 0.3 94.4 3 457 -5.3
Top 35 75 815 76 2 015 370 94.4 94.4 26 583 2.7
World total 99 800 100 2 134 640 100.0 100.0 21 389 3.0
2. Maritime transport and infrastructure
39
3. Shipbuilding, new orders and ship recycling
Two-thirds of world ship building was of dry bulk carriers and tankers
In 2020, ship deliveries declined by 12 per cent, mainly due to lockdown-induced labour shortages during
the rst half of the year that disrupted marine-industrial activity. As in 2018 and 2019, the ships delivered
were mostly bulk carriers, followed by oil tankers and container ships (table 2.7). Since 2015, an increasing
proportion of shipbuilding has taken place in just four countries – China, the Republic of Korea, Japan,
and the Philippines. In 2020, their combined market share rose to 96 per cent.
Table 2.6 Leading ags of registration, ranked by value of total tonnage, 2021
(million US dollars) and principal vessel types
Source: UNCTAD calculations, based on data from Clarksons Research, as at 1 January 2019 (estimated current value).
Note: Value is estimated for all commercial ships of 1,000 gross tons and above.
Flag of Registration
Bulk
carriers
Container
ships
Offshore
vessels
Oil
tankers
Ferries and
passenger
ships
Gas
carriers
General
cargo
ships
Chemical
tankers
Other/ not
applicable
Total
1 Panama 46 903 23 289 14 056 12 065 12 786 10 108 3 768 5 260 6 314 134 550
2 Marshall Islands 32 671 8 217 12 787 26 845 1 513 14 537 430 4 470 1 917 103 388
3 Liberia 29 781 26 351 10 520 20 941 430 5 977 796 2 862 1 439 99 097
4 Bahamas 5 177 706 22 781 6 521 28 250 12 000 65 74 2 303 77 878
5 Hong Kong, China 25 050 25 442 260 10 404 42 6 439 1 318 1 687 105 70 747
6 Malta 10 205 14 925 4 240 9 448 15 166 6 407 1 740 1 661 834 64 626
7 Singapore 13 509 16 531 7 589 11 445 7 947 803 3 560 1 189 62 571
8 China 16 555 5 609 7 728 8 023 4 159 731 2 885 1 668 3 079 50 436
9 Italy 650 196 284 852 15 027 200 1 826 327 621 19 985
10 Greece 3 305 245
1 8 375 1 338 5 388 52 82 22 18 808
Subtotal top 10 183 806 121 512 80 246 114 918 78 711 69 735 13 684 21 651 17 823 702 087
Other 28 649 37 260 68 847 32 846 41 571 26 375 22 785 11 375 13 561 283 269
World total 212 455 158 771 149 093 147 764 120 282 96 110 36 470 33 026 31 384 985 356
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above. For more data on other shipbuilding countries,
see http://stats.unctad.org/shipbuilding.
Table 2.7 Deliveries of newbuildings by major vessel types and countries
of construction, 2020
(thousand gross tons)
Vessel type China
Republic
of Korea Japan Philippines
Rest of the
world Total Percentage
Bulk carriers 15 051 1 442 9 383 551 311 26 738 46
Oil tankers 2 702 7 071 1 901 1 478 12 152 21
Container ships 2 665 5 357 394 56 200 8 671 15
Gas carriers 869 4 046 353 7 5 275 9
Ferries and passenger ships 251 64 76 1 208 1 600 3
Chemical tankers 488 88 465 55 1 095 2
General cargo 390 1 142 360 893 2
Offshore 340 101 7 118 566 1
Other 501 4 107 162 775 1
Total 23 257 18 174 12 827 608 2 898 57 765 100
Percentage 40 31 22 1 5 100
REVIEW OF MARITIME TRANSPORT 2021
40
China has the largest share at around 40 per cent. Since the 1980s, based on cost advantages
and with strong government policy support, China's shipbuilding industry has sought to improve
its capabilities and expand capacity. In 1982, the shipbuilding ministry was ‘corporatized’ as the
China State Shipbuilding Corporation (CSSC) which now administers most commercial and military
shipbuilding. This prioritized development in prosperous coastal regions through decentralized
organization of diverse related industries. Focussing on international demand, the industry also had
greater access to foreign capital, and in the last two decades Chinese companies have entered into
technology-sharing agreements with foreign shipbuilders giving them access to foreign equipment,
materials and technical expertise. R&D institutes and academic organizations in China have also
enhanced their research, development and design capabilities (Market and Research News, 2021
and Medeiros et al. 2021). As a result, over recent years China has improved its building techniques
and efciency and increased its market share not just for bulk carriers and container ships but also for
segments where it has previously not operated, such as passenger ships and LNG carriers (Hellenic
Shipping News, 2021).
New orders
Between January 2020 and January 2021, the global orderbook declined by 16 per cent. The sharpest
reductions were for bulk carriers, down 36 per cent, followed by ferries and passenger ships, down 32 per
cent. By contrast, other segments grew: liqueed gas carriers, up 10 per cent, and general cargo ships,
up 6 per cent (gure 2.8).
From a longer-term perspective, the eet orderbook has been shrinking since 2011, reaching
165,520,744 dwt in January 2021, the lowest level for the last decade. This is largely the result of constraints
on nance combined with uncertainty over future choices of energy sources, and compounded from 2020
by the impacts of COVID-19 on trade volumes and economic activity. At the beginning of 2021, order
levels for container ships were similar to those in 2018, for bulk carriers to those in 2004–2006, and for oil
tankers to those in 2001, 2003 and 2020 (gure 2.9).
Since early 2021, however, there has been a surge of new orders. As world trade gradually recovered
during the second half of 2020 and the rst half of 2021, demand for ships increased – responding
to severe eet capacity constraints and the uptick in freight rates. In the rst half of 2021, newbuild
investment was at its highest since the rst half of 2014 (Bak, 2021), with record-breaking orders for
container ships – almost eight times those in the rst half of 2020. New building orders were spearheaded
by those for Panamax container ships (ShipInsights, 2021). There has also been an increase for LNG
carriers (Roussanoglou, 2021b).
The largest increases in orders during this period were for Chinese and Korean shipbuilders (Maritime
Executive, 2021). However, these orders appear to be concentrated in a few shipyards – which could
increase average contract lead times and hinder eet growth (Springer, 2021, and Walia, 2021).
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above; beginning-of-year gures.
-80
-60
-40
-20
0
20
40
60
80
100
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Percentage
Bulk carriers
Oil tankers
Container ships
Liqueed gas carriers
General cargo ships
Ferries and
passenger ships
Figure 2.8 Growth of world eet orderbook, 2012–2021, percentage change in dead-weight
tonnage
2. Maritime transport and infrastructure
41
Ship recycling
Even through the COVID-19 disruption, the tonnage of ships sold for recycling increased by 44 per cent
in 2020, reaching 17,400,564 GT. Nevertheless, recycling levels remain lower than in the 2014–2017
period. Despite high scrap metal prices, ship owners believe they can continue to earn high incomes by
continuing to operate older vessels.
In 2020, almost half of the recycling was of bulk carriers, reecting declining charter rates and following
the trend of recycling ageing tonnage (Jiang, 2021 and Clarksons Research, 2021c). Around two-thirds
of reported tonnage sold for recycling in 2020 was in Bangladesh and India. With the addition of Pakistan
and Turkey, the share of the top four countries reached 93 per cent (table 2.8). The highest increases in
shares were for Pakistan, by 14.7 percentage points, and for India by 3.2 percentage points.
In contrast, there were noticeable reductions in Bangladesh, by 15 percentage points, and in China by
2 percentage points. In China, this follows a ban on receiving international vessels for recycling, which
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing vessels of 100 gross tons and above. Estimates for all countries available at http://stats.unctad.org/
shiprecycling.
Table 2.8 Reported tonnage sold for ship recycling by major vessel type and country
of ship recycling, 2020
(thousand gross tons)
Vessel type Bangladesh India Pakistan Turkey China
Rest of the
world World total Percentage
Bulk carriers 5 254 1 317 1 718 34 125 61 8 509 48.9
Container ships 160 1 428 282 206 68 2 143 12.3
Oil tankers 616 410 617 159 10 226 2 038 11.7
Offshore supply 125 257 4 308 3 273 969 5.6
Ferries and passenger ships 26 279 545 3 26 879 5.1
General cargo ships 176 219 175 203 47 29 848 4.9
Liqueed gas carriers 169 241 8 176 594 3.4
Chemical tankers 12 125 94 1 10 241 1.4
Other/ n.a. 157 786 135 9 93 1 180 6.8
Total 6 694 5 061 2 890 1 598 195 962 17 401 100.0
Percentage 38.5 29.1 16.6 9.2 1.1 5.5 100.0
Source: UNCTAD calculations, based on data from Clarksons Research.
Notes: Propelled seagoing merchant vessels of 100 gross tons and above; beginning-of-year gures.
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
General cargo ships
Container ships
Oil tankers
Dry bulk carriers
Figure 2.9 World tonnage on order, selected ship types, 2000–2021
(thousand dead-weight tons)
REVIEW OF MARITIME TRANSPORT 2021
42
entered into force in 2018. Between 2017 and 2020, China’s share of global recycling tonnage fell from 16
to 1 per cent.
The extent of ship recycling depends on a number of factors, including vessel age, freight markets, and
trade patterns (OECD, 2019). In addition, ship owners have to take into account new environment-related
regulations, such as IMO limits on the sulphur content of ship fuel oil, the IMO Ballast Water Management
Convention, and emerging IMO regulations on decarbonization. When capital expenditures for retro-tting
older ships to comply with new regulations exceed the return on investment, owners are likely to favour
recycling.
B. SHIPPING COMPANIES AND OPERATIONS: ADAPTING MARITIME
TRANSPORT SUPPLY IN AN UNCERTAIN ENVIRONMENT
1. Expanding and renewing the global eet
Until recently, there was a structural oversupply of maritime transport and, especially from the onset of
the pandemic, ship owners had been cutting capacity. Since 2021, however, supply has lagged behind
demand, leading to higher freight rates (UNCTAD, 2021a).
This situation poses fundamental questions about the future of maritime transport. Owners now have
to decide what ships they require to expand and renew their eets, and must do so in an uncertain
environment. This also means taking into account signicant regulatory changes, particularly those
related to decarbonization and the aim of zero emissions (Shell and Deloitte, 2020). To achieve this,
the industry needs to consider measures and technologies that can improve ship efciency. These
include:
• Lightweight materials
• Slender hull design
• Propulsion improvement
• Bulbous bows
• Air lubrication systems
• Advanced hull coating
• Ballast water-system design
• Engine and auxiliary systems improvement
• Higher efciency standards
Some of these options are being incorporated in newbuilds or in the orderbook but, as indicated in
table 2.9, they have yet to be widely deployed in the global eet. Others are not yet economically viable
(Balcombe et al. 2019).
Source: Clarksons Research (2021). Tracking “Green” Technology Uptake - June 2021 and Eco-eet dashboard. Shipping
Intelligence Network.
Notes: As of 14
th
June 2021, the global eet (vessels above 100GT) stood at 100,500 ships, as per Clarksons data. Energy-
saving technologies encompass waste heat recovery systems, exhaust gas economizers, propeller ducts, pre-Swirl or stator
ns, rudder bulbs, rigid sails, air lubrication system, bow enhancement and solar panels. Modern eco-engine refers to a vessel
with an electronic injection main engine contracted after 1
st
January 2012.
Data based on reported equipment in merchant eet, which may underestimate total uptake.
Table 2.9 Status of uptake of selected technologies in global shipping, as of 14 June 2021
Equipment type Energy-saving technologies Ballast water management systems (Modern) eco-engine
Fleet, number of ships 3 929 18 925 6 698
Percent of eet
(Percent of GT capacity)
3.9%
(19.0%)
18.8%
(59.5%)
6.7%
(25.7%)
Orderbook 254 2 078
Percent of orderbook
(Percent of GT capacity)
6.8%
(13.2%)
55.3%
(91.6%)
2. Maritime transport and infrastructure
43
Responding to this challenge will require signicant investment. Expanding the eet to cater for trade
growth over the coming three decades could cost around $0.2 trillion while retrotting or replacing the
existing eet over the next 30 years, could cost an additional $2.19 trillion (Ovcina, 2021).
1
Since it is
impossible to renew the whole eet by 2050, innovation and new technologies will also need to be applied
to existing vessels.
2. Decarbonization without a crystal ball
Uncertain decarbonization scenarios
In 2018, the IMO adopted a sector reduction pathway consistent with the Paris Agreement. The aim is
by 2050 to reduce total annual greenhouse gas emissions by at least 50 per cent of 2008 levels, while
reducing carbon intensity by at least 40 per cent by 2030, and 70 per cent by 2050. These objectives are
to be achieved through a combination of short-, mid- and long-term measures, with quantitative targets
until 2050. Table 2.10 summarizes some proposed measures.
At present, the regulatory outlook is uncertain. The IMO has yet to agree on a number of issues, such as
the market-based mechanism, and the outcome is likely to be combination of measures. Moreover, the
IMO regulations will be accompanied by those from other bodies such as the EU. On 14 July 2021 the EU
announced a series of measures:
• Including ships of 5,000 GT and above in its Emissions Trading System for all intra-EEA voyages
and for 50 per cent of voyages starting and ending in the bloc.
• Establishing greenhouse gas intensity standards for ship fuels.
• Introducing taxes on bunkers sold in the European Economic Area.
The interplay between different regulatory regimes, combined with volatility in carbon prices is generating
considerable uncertainty – which is compounded by the difculty in modelling the outcome of each
measure (ING, 2021). Total emissions will depend on ship type, size and engine, as well as on sea routes
1
These projections exclude fuel transition-related investments, such as storage and transport of alternative fuels.
Category Subcategories Examples of measures
Short-term measures, to be
agreed upon between 2018
and 2023
• Technical and operational
energy-efciency measures
• Use of alternative low-carbon
or zero-carbon fuels for marine
propulsion and other technologies
• New operational energy-efciency standards for new
and existing ships (EEXI)
• Consider and analyse the use of speed optimization and
reduction
• Developments of port infrastructure to support
alternative fuels
• Progressive tightening of standards on minimum energy
efciency levels and emissions, based on ship design
and engine performance data (CII)
• R&D efforts on marine propulsion with alternative fuels
• Encourage the development of national action plans to
develop policies and strategies to address greenhouse
gas emissions from international shipping
Mid-term measures, to be
agreed upon between 2023
and 2030
• Market-based measures – carbon
pricing mechanisms to give rms
economic incentives to emit less
• Operational energy efciency
measures for new and existing ships
• Market-based measures could include an offsetting
scheme, a maritime emissions trading scheme, or a
carbon levy
• Specify in the national action plan measures to increase
the uptake of low- and zero-carbon fuels
Long-term measures
(to be agreed beyond 2030)
• Measures to ensure zero-carbon and
fossil-free fuels
Table 2.10 Some proposed IMO measures to reduce greenhouse gas emissions
Sources: IMO (2018), Kachi et al. (2019).
Note: Some measures mentioned in this table have been agreed at the IMO (short-term measures including EEXI and CII)
whereas others have not.
REVIEW OF MARITIME TRANSPORT 2021
44
and navigation conditions – information which may not be easily accessible (Sanchez et al, 2020 and
Plevrakis, 2020).
Since 2020, UNCTAD has been collaborating with IMO on assessing the impact of short-term measures.
In a report published in 2021, UNCTAD looks at the combined impact of two measures: a new energy
standard, the energy efciency existing ship index; and a new operational requirement, the carbon intensity
indicator (UNCTAD, 2021b). The report considers their potential impacts on ship costs, travel distances,
eet distribution, routing patterns, and the use of different types of vessels as well as on maritime logistics
costs. The report concludes that the greatest impact will be on smaller vessels plying shorter routes and
on container ships and tanker vessels (gure 2.10).
Source: UNCTAD compiled from DNV and MarineTrafc data.
Notes: Size of the bubbles stands for the average ship size per DWT. This gure represents the percentage change in
total cost intensity between (i) the most ambitious greenhouse gas reduction scenario (regulatory scenario including
both EEXI and CII requirements, with an average CII reduction requirement of 21.5 per cent between 2019 and 2030)
and (ii) the 2030 “current regulations scenario (with only adopted EEDI requirements, including those entering into force
in 2022)”.
Bulk carrier 60000-99999 dwt
Container 0-999 TEU
Liqueed gas tanker
200000-+ cbm
Oil tanker 120000-199999 dwt
Oil tanker 200000-+ dwt
Oil tanker 5000-9999 dwt
Oil tanker 60000-79999 dwt
0
10
20
30
40
50
60
1000 2000 3000 4000 5000 6000 7000
Median distance travelled (nm)
Percentage change
in total cost intensity
Figure 2.10 Percentage change in cost intensity by ship segment,
average size and median distance travelled
The easiest and cheapest way to reduce emissions is to reduce ship speed. Operating at less than full
power cuts fuel consumption, and thus carbon emissions, while reducing operating costs. However,
transporting the same cargo volumes at slower speeds will also require more ships. The report estimates
that the IMO short-term measures will require 13 per cent more vessel capacity. This will entail considerable
capital expenditure and have important implications for shipbuilders. Drewry estimates that global
shipbuilding capacity is equivalent to 7 per cent of the global eet and that, while maintaining also normal
eet replacement and growth, increasing vessel capacity by 13 per cent would require a ramp-up period
of around ve years (UNCTAD, 2021b).
The study points out that reducing speeds will also mean reconguring services – especially for Pacic
and Caribbean SIDS where the maritime trade typically depends on smaller cargo ships on shorter routes.
Smaller ships will also be needed, when a deep-sea liner that is going slower now needs to skip a
port – which would require more transhipment, thereby increasing costs.
Uncertain energy transition pathways
The path towards shipping decarbonization involves not just ship design and improvements in technology
but also the use of alternative fuels. As indicated in table 2.11, the shipping industry uses a range of fuels,
though the predominant ones are traditional liquid ones, such as very-low-sulphur intermediate fuel oil
(VLS IFO) and intermediate fuel oil with a maximum viscosity of 380 centistokes (IFO380), along with VLS
marine diesel oil.
There is certainly signicant scope for moving the existing eet to alternative fuels but there are many areas
of uncertainty, and the shift to net-zero fuels has barely begun. For alternative fuels it is important to ensure
their safety and consider upstream emissions from their production (see box 2.1).
2. Maritime transport and infrastructure
45
Table 2.11 World eet by fuel type as of 1 January 2021
Fuel type Ships GT TEU dwt Ships % GT % TEU % Dwt %
Ships % of
known fuel type
GT % of known
fuel type
TEU % of known
fuel type
Dwt % of known
fuel type
Very Low-Sulphur (VLS) Intermediate Fuel Oil (IFO) 36 188 993 715 259 18 384 210 1 534 083 046 36.26 69.08 70.97 72.11 47.12 72.26 71.29 74.54
VLS Marine Diesel Oil (MDO) 33 118 29 698 675 149 929 27 886 341 33.18 2.06 0.58 1.31 43.12 2.16 0.58 1.36
IFO 380* 3 635 283 299 533 6 949 482 437 386 040 3.64 19.69 26.83 20.56 4.73 20.60 26.95 21.25
VLS Marine Gasoil (MGO) 2 539 7 441 142 34 467 6 769 951 2.54 0.52 0.13 0.32 3.31 0.54 0.13 0.33
Ultra-Low Sulphur (ULS) MDO 381 697 587 7 000 661 627 0.38 0.05 0.03 0.03 0.50 0.05 0.03 0.03
LNG, VLS IFO 373 36 964 811 144 014 30 159 817 0.37 2.57 0.56 1.42 0.49 2.69 0.56 1.47
LNG, VLS MDO 168 10 814 060 12 703 8 190 743 0.17 0.75 0.05 0.39 0.22 0.79 0.05 0.40
IFO 180 166 7 351 589 75 955 9 536 173 0.17 0.51 0.29 0.45 0.22 0.53 0.29 0.46
ULS IFO 43 352 580 15 617 438 639 0.04 0.02 0.06 0.02 0.06 0.03 0.06 0.02
LNG, VLS MGO 37 424 846 10 430 662 0.04 0.03 0.00 0.02 0.05 0.03 0.00 0.02
LNG 32 459 380 260 139 039 0.03 0.03 0.00 0.01 0.04 0.03 0.00 0.01
MDO 22 652 797 1 629 188 652 0.02 0.05 0.01 0.01 0.03 0.05 0.01 0.01
ULS MGO 22 26 594 16 571 0.02 0.00 0.00 0.03 0.00 0.00
Biofuel 18 360 677 11 684 386 434 0.02 0.03 0.05 0.02 0.02 0.03 0.05 0.02
MGO 12 880 222 122 003 0.01 0.06 0.01 0.02 0.06 0.01
Methanol, VLS IFO 11 336 377 552 044 0.01 0.02 0.03 0.01 0.02 0.03
Ethane, VLS IFO 7 292 595 264 750 0.01 0.02 0.01 0.01 0.02 0.01
Nuclear 6 144 573 1 324 50 079 0.01 0.01 0.01 0.00 0.01 0.01 0.01 0.00
LPG, VLS IFO 5 236 752 272 690 0.01 0.02 0.01 0.01 0.02 0.01
Biofuel, LNG 4 43 851 3 907 0.00 0.00 0.00 0.01 0.00 0.00
Compressed Natural Gas (CNG), VLS MDO 3 111 058 105 325 0.00 0.01 0.00 0.00 0.01
0.01
IFO 380, LNG 2 251 144 18 400 0.00 0.02 0.00 0.00 0.02 0.00
MDO, MGO 2 183 254 16 030 0.00 0.01 0.00 0.00 0.01 0.00
Biofuel, VLS MGO 2 6 810 9 876 0.00 0.00 0.00 0.00 0.00 0.00
VLS IFO, Well Fuel 1 86 952 166 546 0.00 0.01 0.01 0.00 0.01 0.01
CNG, VLS MGO 1 30 742 31 473 0.00 0.00 0.00 0.00 0.00 0.00
LNG, MDO 1 65 314 600 22 437 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IFO 380*, MGO 1 149 215 19 189 0.00 0.01 0.00 0.00 0.01 0.00
Methanol 1 51 837 10 670 0.00 0.00 0.00 0.00 0.00 0.00
Nuclear, VLS MDO 1 33 500 9 000 0.00 0.00 - 0.00 0.00 0.00 - 0.00
Unknown fuel type 22 998 63 435 988 115 238 69 356 421 23.04 4.41 0.44 3.26
Grand Total 99 800 1 438 599 714 25 904 122 2 127 304 575 100.00 100.00 100.00 100.00
World total known fuel type 76 802 1 375 163 726 25 788 884 2 057 948 154 100.00 100.00 100.00 100.00
Source: UNCTAD, based on data provided by Clarksons Research.
Notes: * Intermediate fuel oil with a maximum viscosity of 380 centistokes (<3.5 per cent sulphur).
All variations of MGO, MDO and IFO are traditional fuel types.
Alternative fuels encompass: LNG, LPG, methanol, biofuels, hydrogen, ammonia; synthetic methane and nuclear - highlighted in green.
Fuels that mention a traditional fuel type, along with an alternative fuel (for example: “Ethane, VLS IFO”; “Biofuel, VLS MGO” or “Nuclear, VLS MDO” refer to dual-fuel ships highlighted in light orange.
REVIEW OF MARITIME TRANSPORT 2021
46
C. PORT SERVICES AND INFRASTRUCTURE SUPPLY
The past year has been very testing for port operations. The impacts of COVID-19, compounded by the
Ever Given incident in the Suez Canal, have resulted in congestion and equipment shortages and have
disrupted supply chains. Nevertheless, ports have remained operational and continued to serve diverse
ows of trade. Their experience has conrmed the importance of preparing for the unexpected and of
building resilience (box 2.2). But the COVID-19 crisis has also opened up new opportunities to diversify
and to create better links between maritime and other modes of transport.
Box 2.1
Divided views on whether oil should be replaced by LNG
An alternative fuel already widely in use is liquefied natural gas. This is the greenest fossil energy
source, which compared to heavy fuel oil (HFO), could reduce sulphur emissions by 99 per
cent, nitrogen oxides by 80 per cent, and CO2 emissions by up to 20 per cent, along with most
particulate matters. The 2020 Sphera report demonstrated that LNG/dual-fuel engines emit fewer
grams of CO2 equivalent per kw than diesel engines. Dual-fuel engines can use existing technology,
enabling ships to be operated on different types of fuel and comply with regulations while remaining
competitive.
In January 2021 the IMO sulphur cap entered into force, prompting greater investment in bunkering
port infrastructure and in LNG-fuelled ships. Currently, these represent a small share of the eet and of
the orderbook. But their numbers are expected to grow signicantly in the 2021–2022 period.
The major disadvantage of LNG is that it consists primarily of methane which is a far more potent
greenhouse gas than CO2. Even small escapes during production or use could result in a net increase
in GHG emissions. In April 2021, the World Bank published a report that considered holistic lifecycle
emissions and highlighted the impact of LNG on climate change. It recommended countries to avoid
supporting LNG as a bunker fuel and advocated for regulation of methane emissions.
Shipping industry voices, such as Maersk and Euronav, have also questioned the suitability of LNG as a
transition fuel and point to the high costs of investing in new ships and infrastructure while not reducing
lifecycle greenhouse gas emissions – with the danger of technological lock-in since new infrastructure
with be in operation for 20 years. They also perceive such investment as extending the use of carbon
in the maritime energy supply chain and delaying the energy transition.
Sources: Gaztransport Technigaz (GTT). LNG as a marine fuel. Gilbert, P., Walsh C., Traut M., Kesieme U.,
Pazouki K. and Murphy A. (2018). Assessment of full life-cycle air emissions of alternative shipping fuels,
Journal of Cleaner Production, Volume 172, 20 January 2018. Clayton, R. (2019). LNG will be transitional fuel
for 2030, Nor-Shipping hears. Lloyds List News, 03 Jun 2019. Ovcina, J. (2020). Clarksons: 27 per cent of the
order book to run on alternative fuels. Offshore Energy, 1/12/2020. Lloyd’s Register (2021). The complexities
of the fuel supply chain as we move towards zero-carbon. 20/01/2021. World Bank (2021). The role of LNG in
the transition toward low-and zero carbon shipping. Lloyds List (2021). Is LNG really borderline greenwashing?
Lloyds’ List Shipping Podcast, 14/05/2021.
Box 2.2
Building port resilience UNCTAD experience
The UNCTAD TrainForTrade Port Management Programme helps ports in developing countries become
more efcient and competitive. During the pandemic, the programme worked with other United Nations
entities on a joint project to keep transport networks and borders operational – by implementing
standards, guidelines, metrics, tools and methodologies to facilitate the ow of goods and services,
while containing the spread of COVID-19. The project supports governments, including customs and
other border agencies, port authorities, and the business community.
This work includes a course on Building Port Resilience Against Pandemics which addresses four
areas: crisis protocols and communications strategy; staff management, well-being, and resilience;
technology preparedness; and cargo ow continuity.
Discussions during the course indicate that building resilience requires signicant changes in port
operations. These would necessarily differ from country to country but this forum allows practitioners
to discuss and exchange experience and ideas and explore responses and actions. They have
concluded that port clients, operators and governmental entities can cooperate to improve their
information systems – aiming for uniformity, consistency and predictability, while minimizing confusion
and uncertainty at times of disruption.
Key to the programme’s success is South-South cooperation. Local instructors deliver training
supported by experts from UNCTAD and other port partners.
Source: Information provided by the UNCTAD TrainForTrade Port Management Programme.
2. Maritime transport and infrastructure
47
Ecommerce, smart logistic hubs and intermodal connections
During the pandemic, consumers sought a safe way to meet their needs, leading to a boom in online
retail sales – which in 2020 amounted globally to $4.28 trillion. This trend is expected to continue: in 2022
e-retail revenues are projected to grow to $5.4 trillion (Statista, 2021).
These higher volumes, combined with expectations for rapid delivery, have boosted the demand for better
logistic facilities – in particular for sufcient warehouses to store products along with space to full and
despatch orders, while also providing value-added services.
Indeed investment decisions and port planning are increasingly being inuenced by the expectations
of retailers and logistic operators – who are looking to reduce costs by using seaports close to
warehousing or distribution facilities and their end markets (Drewry 2021). To avoid congestion and
ensure rapid replenishment, ports can offer storage and warehousing capacity and space for modern
logistics.
Ports are also investing in more technology for monitoring supply chains, detecting potential disruption
and generally tracking shipments to their destinations. In 2021, several Asian ports, including Sichuan
and Hainan in China, launched or announced investments in smart logistics (American Journal of
Transportation, 2021 and South China Morning Post, 2021).
To maximize ecommerce logistics operations, port operators need to be able to handle data efciently
(Drewry, 2021). For this purpose, port logistic are increasingly relying on digitalization – for exchanging
information among customers, partners, suppliers and other actors, and for offering new services
(Logmore, 2019). For example, one of the world’s largest global terminal operators, DP World, has
acquired Syncreon, a global provider of supply chain services (van Marle, 2021).
To take advantage of ecommerce, ports also need to be well connected to their hinterlands. Using
new technology they can become smart logistic hubs that connect maritime and other modes of
transport – facilitating supply chain connections, domestically, regionally and internationally. These need to
operate in a more agile, intermodal fashion at times of congestion and disruption (Schwerdtfeger, 2021).
Box 2.3 describes how intermodal connections can be advanced by best practices, standards and
regulations.
Box 2.3
Guidance and standards for intermodal operations
The UN Economic Commission for Europe (ECE) promotes best practices and standards for sustainable
transport while also developing, and overseeing the implementation of, legal instruments. ECE aims
to support inland freight transport, by improving trafc safety, environmental performance, energy
efciency, security and efcient service provision.
A recent ECE report, the Handbook for National Masterplans for Freight Transport and Logistics,
provides guidance to governments on how transport and logistic services can, in post-pandemic times,
contribute to economic development and recovery. The report highlights the critical importance for
intermodal operations of intelligent transport systems (ITS) and telematics that enable operators to shift
freight seamlessly across transport modes and networks – to plan routes and deliveries, and optimize
cargo ows and the use of infrastructure.
Maximizing the benets of ITS to transport operations will mean training the workforce for increased
specialization and technological innovation, and supporting ITS research and development in cost-
efcient solutions. At the same time, there needs to be signicant investment, partly through public-
private partnerships, in high-performance digital infrastructure, while ensuring efcient data exchange
and interoperability.
It is also important to agree on legal instruments and standards. An example is the 1991 European
Agreement on Important International Combined Transport Lines and related installations (AGTC). This
agreement aims to make international combined transport in the ECE region more efcient and attractive
to customers, by developing a common infrastructure quality standard for combined transport on the
main European corridors. The framework’s important nodal points include transport terminals, border
crossing points, stations for exchanging wagon groups, gauge-interchange stations, and ferry links and
ports. Facilitating modal shifts enables international freight movements while reducing the damaging
environmental impacts from transporting international freight by road.
Implementing AGTC minimum standards is expected to strengthen critical Euro-Asian railway routes
that can connect Central Asian landlocked ECE members to international markets. To avoid temporary
closure of borders as a result of pandemics, ECE is also considering an agreement for uninterrupted
operation of designated core lines of the network.
REVIEW OF MARITIME TRANSPORT 2021
48
Greener industrial port activities
The world is now embarking on the transition to greener energy. This will be costly. Halving shipping
emissions by 2050 is estimated to require an annual average investment of between $40 to $60 billion
between 2030 and 2050. Most of this is for producing alternative fuels such as ammonia, hydrogen, and
methanol among others, while also developing new land-based infrastructure for storage and bunkering
(Krantz et al, 2020).
The energy transition has major implications for ports. Less trade in oil will reduce revenue from storing
and distributing fossil fuels. Preparing for a future without carbon fuels, ports are therefore aiming to
develop new markets and value-added services (The Conversation, 2021 and Manners-Bell, 2021). And
despite the pressures faced in 2020, many have maintained their plans for investing in environmental
sustainability (IAPH-WPSP, 2021). These include production of alternative energy, infrastructure to
import alternative fuels, and for bunkering and storage to facilitate onward distribution (table 2.12).
Some ports have benetted from infrastructure green recovery plans and others from incentives for
foreign investment.
Box 2.3
Guidance and standards for intermodal operations (cont.)
At present, digital exchange between different modes of transport, sectors and countries is quite
fragmented, so ECE is working on digital standards for harmonizing digital exchange of data and
documents based on existing UN/CEFACT semantic standards and reference data models. These will
allow for interoperability along multimodal supply chains, using a common foundation for converting
data between modes of transport, sectors and authorities.
Tests to prove the concept are taking place. For example, UN/CEFACT and FIATA experts have
prepared a digital version of the FIATA multimodal Bill of Lading, aligned to the MMT RDM. Another test
has focused on exports of wood and cellulose from Belarus to Central Europe via Ukraine, the Black
Sea and the Danube, combining rail, road, river and maritime transport information exchanges. These
tests demonstrate the benets of seamless data exchange between different modal consignment notes
and maritime bills of lading. Experts are also currently working on IMO/FAL forms in Ukraine with a view
to using them along multimodal transport routes.
Source: Inputs provided by the ECE Secretariat and ECE (2021) Handbook for National Masterplans for Freight
Transport and Logistics.
Alternative energy Bunkering infrastructure
Facilitating import of alternative
energy and storage infrastructure
• Project to develop hydrogen-based
exports from the Port of Fujairah
(United Arab Emirates)
• Project to develop offshore wind energy
to generate hydrogen at North Sea Port
(Belgium)
• Pilot hydrogen lling stations in the
port of Antwerp
• Proposed hydrogen infrastructure at
Kobe, Chita, Yokkaichi and Hibikinada
ports (Japan), capitalizing on existing
hydrogen pipeline
• Project to develop a terminal in
Germany for import and onward
distribution of LNG, encompassing
storage and ancillary services
(Brunsbüttel Ports, Germany)
Table 2.12 Industrial port projects capitalizing on green opportunities to generate
new revenue streams
Sources: Argus Media (2021): Japan studies options to cut coastal shipping emissions. ArgusMedia, 2/7/2021. OffshoreWind.
Biz (2021) Equinor, Ørsted, Boskalis Join AquaVentus Offshore Wind-to-Hydrogen Project 4/5/2021. Savvides; Nick (2021).
Antwerp and CMB team up to launch multimodal hydrogen lling station. The Loadstar, 10/6/2021. Liebig; L. (2021). The
United Arab Emirates is well placed to capitalise on the pivot to hydrogen 13/4/2021. Pekic, Sanja (2021). North Sea Port to
get hydrogen pipeline network. Offshore Energy, 3/6/2021.
There is also now greater interest in smarter and greener ports. Beyond transforming ports into
carbon-neutral ecosystems this means using new data environments and articial intelligence to enhance
competitiveness and sustainability. Some factors affecting the development of such ports are indicated
in table 2.13.
2. Maritime transport and infrastructure
49
Dimension Inuencing factors Indicators of success
Greenness Energy-saving and emission-reducing capability Port’s capability in saving energy and controlling pollutant
discharges
Pollution treatment capability Responsiveness and degree in treating pollutants
Efcient utilization of resources Whether a port has the capability to utilize resources
effectively to reduce resource waste
Environmental protection concept and policy system Knowledge and practices of port management personnel
and policymakers in green concepts
Agility Agile production capability Port’s capability in fully utilizing the limited resources and
responding quickly to orders
Comprehensive logistic capability. Levels of a port’s
comprehensive logistic services and supply
Whether a port adopts rened operation modes and has JIT
capabilities
Personalization Port-differentiated service levels Levels of a port’s services that are different from those at
other ports
Personalized service levels for customers Levels of personalized services provided by the port to
customers
Emergency and quick response capabilities Port’s response capabilities to multiple emergencies and
adjustability to changes
Cooperation International port-shipping cooperation Degree and model of international port-shipping
cooperation
Port-city integration Port-city cooperation
Cooperation between subsidiary and parent ports Cooperation between subsidiary and parent ports
(international dry ports, feeder ports and inland port areas)
Intelligence* Intelligent production infrastructure and operation Intelligence degree of port infrastructure operation and
production
Intelligent administration Intelligence degree of port administration
Intelligent facility security Intelligence degree of port facility security
Innovative R&D and technology application Port’s technical innovation R&D capability and degree of
application
Liberalization Liberalization of trade and economic policies Port’s liberalization degree in domestic and foreign trade
Facilitation of logistics and customs clearance Port’s coordination with the Customs and quarantine
departments and degree of cargo transportation facilitation
Openness of investment and nancing Openness of a port in market investment and nancing
Table 2.13 Factors affecting the development of smart green ports
Source: Chen, J.; Huang, Tiancun, Xie, X; Lee, P. and Hua, C. (2019). Constructing the Governance Framework of a Green
and Smart Port. Journal of Marine Science and Engineering.
* Dened as “more modern intelligent technologies integrated into port working environments to improve port operations”.
D. THE IMPACT OF COVID-19 ON PORTS: LESSONS FROM THE UNCTAD
TRAINFORTRADE PORT MANAGEMENT PROGRAMME
The TrainForTrade Port Management Programme brings together a strong network of ports across several
continents, for which the programme has continued to upgrade its Port Performance Scorecard (PPS). Each
April member ports complete a survey on their performance in the previous calendar year. This provides valuable
data for strategic planning within ports and for evidence-based policy analysis at regional and state levels.
The data are collected through 82 questions from which the PPS derives 26 agreed indicators under
the following categories: nance, human resources, gender, vessel operations, cargo operations, and
environment (table 2.14). The same approach has been used each year since the inception of the PPS
in 2012 thus ensuring consistency and comparability over time.
For the current scorecard for the ve-year period 2016–2020, 51 port entities provided 3,301 data
points – an average of 98 data points per indicator. Around half of the ports were small, less than ve
million tons, or medium, between ve million and 10 million tons. The annual volume throughput for the
largest port in the sample was 80.9 million tons and for the smallest was 1.5 million tons. Two-thirds were
landlord ports – owning the basic infrastructure and leasing it out to operators – or used a mixed model.
REVIEW OF MARITIME TRANSPORT 2021
50
Table 2.14 Port Performance Scorecard indicators, 2016–2020
Source: UNCTAD, based on data provided by selected member ports of the TrainForTrade network.
Abbreviations: CAPEX, capital expenditure; EBITDA, earnings before interest, taxes, depreciation and amortization.
Category Indicator number Indicator Number of values Mean
Finance 1 EBITDA / revenue (operating margin) 98 33.1%
2 Labour / revenue 102 22.9%
3 Vessel dues / revenue 101 15.8%
4 Cargo dues / revenue 101 36.7%
5 Concession fees / revenue 91 13.7%
6 Rents / Revenue 96 5.7%
Human resources 7 Tons / employee 108 65 054
8 Revenue / employee 101 $189 180
9 EBITDA / employee 97 $98 029
10 Labour cost / employee 96 $32 985
11 Training cost / wages 96 1.3%
Gender 12 Female participation rate – all categories 108 17.5%
12.1 Female participation rate – management 108 42.0%
12.2 Female participation rate – operations 100 16.0%
12.3 Female participation rate – cargo handling 74 5.7%
12.4 Female participation rate – other employees 46 29.1%
Vessel operations 13 Average waiting time (hours) 92 14
14 Average gross tonnage per vessel 106 18 184
15.1 Average of oil tanker arrivals 114 9.8%
15.2 Average of bulk carrier arrivals 115 10.5%
15.3 Average of container ship arrivals 114 30.7%
15.4 Average of cruise ship arrivals 113 1.1%
15.5 Average of general cargo ship arrivals 116 27.4%
15.6 Average of other ship arrivals 114 22.5%
Cargo operations 16 Average tonnage per arrival (all) 117 8 162 t
17 Tons per working hour, dry or solid bulk 77 317 t
18 Tons per hour, liquid bulk 55 367 t
19 Boxes per ship hour at berth 70 27
20 Twenty-foot equivalent unit dwell time (days) 63 6
21 Tons per hectare (all) 107 141 704 t
22 Tons per berth meter (all) 113 6 482 t
23 Total passengers on ferries 89 959 899
24 Total passengers on cruise ships 92 91 068
Environment 25 Investment in environmental projects / Total CAPEX 54 6.3%
26 Environmental expenditure/revenue 77 1.8%
2. Maritime transport and infrastructure
51
1. Impact of COVID-19 pandemic across the TFT port network
In 2020, the COVID-19 pandemic had a signicant impact on ports worldwide. As well as creating
health risks for port workers and seafarers in all regions it also substantially reduced the volume of trade.
Between 2016 and 2018 cargoes had been growing at a median value of ve per cent per year and
revenues by six per cent. In 2020, however, volumes fell by 4 per cent and revenues by 9 per cent
(gure 2.11). The impacts on individual ports are illustrated in box 2.4, by the experience of the Port of
Gijon in Spain, and in box 2.5, by the port system in Peru.
Source: UNCTAD, based on data provided by selected member ports of the TrainForTrade network.
-10
-8
-6
-4
-2
0
2
4
6
8
2016 2017 2018 2019 2020
Cargo
Revenue
Figure 2.11 Cargo and revenue, 2016–2020
(percentage change)
Box 2.4
Port performance analysis of the Port of Gijon in 2020
Although 2020 was a tough year for ports in general, and for Europeans in particular, for the port of
Gijon it was what we could call the ‘perfect storm’.
On the one hand, COVID-19 hit. On the other hand, the ght for a more sustainable world caused the
closure of the ve thermal power plants that the port served; consequently causing a loss of ve million
tons of coal. In addition, the shutdown of an Arcelor Mittal blast furnace caused a loss of almost four
million tons.
Other trafc, such as the import, mix and export of coals from Russia to the Maghreb helped offset
the large losses mentioned above. And despite the ‘three storms’, the Port of Gijon has rmly held
the wheel while at the same time helping its clients, allowing them to delay payments for a year and
rewarding companies affected by COVID-19.
Losses meant a 7 per cent drop over the previous year (2019). The total tons handled, amounted to
16 million tons. Trafc was broken down into 80 per cent solid bulks, 12 per cent general merchandise
and 8 per cent made up of liquid bulks.
Iron ore, steel coal and cement made the port the rst in solid bulk in the Spanish port system. Other
solid bulks, like cereals and fertilizers, contributed to its leadership.
As for general merchandise, 75 per cent was containerized, with 85,000 TEU moved. This represented
75 per cent of the port’s hinterland and is expected to expand in the coming years following a new
rail connection with the centre of the country. The remaining 25 per cent of the total, 1.5 million ton of
general merchandise, was steel products.
Liquid bulks represented 8 per cent of the mix – petroleum products, gasoline, and gasoil, intended for
nal consumption.
Despite the wind and seas from the bow, nancial results have been positive and increased by a little
over two million euros. The year 2021 is born full of new projects and hopes that will undoubtedly help
turn the page of these challenging times.
Source: Port Authority of Gijon.
REVIEW OF MARITIME TRANSPORT 2021
52
Financial performance
Financial performance of ports can be measured as the average gross revenue per ton of cargo. This
ranged from $1.9 per ton in Europe, and $2.26 in Asia, to $5.31 in Africa. At the global level the sources
of revenues are indicated in gure 2.12, showing the split between port dues on vessels and cargo
throughput, port service charges, and income derived from land and concession rights.
Around half of revenues come from vessel and cargo charges for the use of primary port infrastructure.
This proportion is likely to fall over time with the development of digitalized ports and energy hubs, using
either the concession or landlord model.
Protability is measured as earnings before interest, taxes, depreciation, and amortization (EBITDA).
Businesses with high demands for infrastructure investment require elevated levels of EBITDA to be
sustainable. In 2020 average protability declined by 12 per cent in Europe, by 17 per cent in Asia and
by 25 per cent in Africa. Latin America showed no
change. These declines can be partly explained
by the impacts of COVID-19, though in Africa
there must be other major factors since volumes
and revenues showed only a minor impact from
the pandemic.
In performance terms, the reported numbers
show a falloff in 2020. While there have been
protability drops in other periods this decline can
be partially explained by the COVID-19 pandemic.
Last year the scorecard covered the
period 2015–2019, for which EBITDA as
a proportion of revenue was 38.8 per cent
(indicator 1). The 2021 scorecard covered the
period 2016–2020 for which the proportion
Box 2.5
Port performance analysis of the national port system in Peru in 2020
In Peru, in 2020 there was a 10.9 per cent fall in volumes to 97.4 million tons while the number of
containers (in TEU) handled remained stable nationally. However, there was a drop in container trafc
at the larger international terminals of 3 per cent compared to 2019 due to the impact of the COVID-19
health emergency (see table).
The main types of goods, containers, solid bulk, and break-bulk cargo, decreased by 0.3 per cent,
3.7 per cent and 4.9 per cent, respectively, as shown in the table, which illustrates the movement of
cargo at public and private port terminals for 2019/2020.
Type of Merchandise Unit of measure Year 2019 Year 2020
Change (%)
2020/2019
LoLo containers
TEU 2 678 258 2 654 289 -0.9%
units 1 618 433 1 592 256 -1.6%
tons 25 905 625 25 832 736 -0.3%
Break Bulk tons 4 057 174 3 858 419 -4.9%
Bulk Solids tons 12 165 301 11 714 440 -3.7%
Bulk Solid Minerals tons 33 122 675 27 978 125 -15.5%
Liquid Bulks tons 33 756 658 27 883 897 -17.4%
RoRo tons 333 213 207 063 -37.9%
Total Load tons 109 340 647 97 474 680 -10.9%
However, these reductions are moderate compared to those for bulk minerals, liquid, and roro cargo,
which decreased by 15.5 per cent, 17.4 per cent, and 37.9 per cent, respectively.
During the year 2020, the National port system handled a total of 2.6 million TEUs, presenting a slight
drop of 0.9 per cent, compared to the year 2019.
Source: National Port Authority of Peru.
Source: UNCTAD, based on data provided by selected
member ports of the TrainForTrade network.
Cargo dues
37%
Vessel dues
16%
Concession fees
14%
Rents
5%
Other
28%
Figure 2.12 Average revenue mix of
ports, 2016–2020
2. Maritime transport and infrastructure
53
declined to 33 per cent. The impact was, however, lower in Europe where averages remained at 59 per
cent and in Latin America at 41 per cent.
A high-level comparison of revenue proles shows the mix between port dues on vessels and cargos, port
service charges and incomes derived from lands and concession rights. Between 2020 and 2021 scorecards,
the proportion of total capital expenditure for environmental purposes fell from 7.2 to 6.4 per cent, while the
proportion of operating costs for environmental purposes fell from 2.3 to 1.8 per cent. In some countries the
environmental data are difcult to extract since they can be embedded in the total capital or operating spends.
Gender equality
Sustainable Development Goal 5.5 calls for full and effective participation of women and equal opportunities
for leadership at all levels of decision making in political, economic, and public life. In this respect, ports
still do not perform well. Between 2020 and 2021 scorecards, the average female proportion of the port
entity workforce fell slightly, from 17.6 to 17.5 per cent. The proportion in Europe is signicantly higher at
24.8 per cent, though most of these women work in management or administration.
Overall, the gures are more encouraging for management and administrative roles. Between 2020 and 2021
scorecards, the proportion of women rose from 38 to 42 per cent. Asia led the way at 52 per cent, followed by
Europe at 39 per cent. Female participation is however far lower for cargo handling and port operations. There
is thus still a lot to be done to achieve the SDG target to “Achieve gender equality and empower all women
and girls.” Box 2.6 illustrates how the Philippines Ports Authority is making the changes to meet this objective.
Box 2.6
Gender and development in the Philippine Ports Authority and its journey
The Philippine Ports Authority (PPA), under the present leadership of Atty. Jay Daniel R. Santiago,
General Manager, has continued its commitment to institutionalize gender and development (GAD) in
all the ports under its jurisdiction. For SDG 5: “Gender Equality” PPA now satises target 5.5 “Ensure
women’s participation and leadership in decision-making”.
The port industry in the Philippines is undeniably male-dominated. However, in recent years, women
have been making remarkable progress, within the Authority particularly at management levels and
PPA continues to put a premium on women’s empowerment. In its GAD journey there have been many
rsts in entrusting some of highest managerial positions to female ofcers: rst female Assistant General
Manager on Finance and Administration (executive level); rst female Port Manager (managerial level in
eld ofces); and rst female Department Manager (managerial level in head ofce).
As of May 2021, women made up half of PPA’s workforce, amounting to 1,026 female personnel. The
highest women-occupied positions are at the middle management level with two department managers,
ve port managers and 56 division managers. Some women employees are also taking male-dominated
positions such as terminal supervisor, safety ofcer, civil security ofcer, engineer, terminal operations
ofcer, or industrial security ofcer. This shows that the authority values the immense contributions of
women employees in the areas of decision-making, management, operations, and even security.
To further strengthen GAD initiatives the Authority ensures compliance with statutory laws upholding the
welfare and development of Filipino women. For instance, PPA strictly observes the provisions of the
General Appropriations Act and Republic Act 9710, also known as the Magna Carta of Women, which
directs government agencies to formulate a GAD plan, the cost of which shall be not less than 5 per cent
of the annual budget. Annually, PPA appropriates 5 per cent of its corporate budget for implementing
the Authority’s GAD plans and programmes. Among the GAD agship projects and programmes are the
construction of gender-neutral facilities and halfway houses, along with capacity-building to increase
awareness among employees.
In recent years, PPA has been crafting and implementing gender-responsive policies, plans and
programmes to advocate gender equality and women’s empowerment. This has been given an added
impetus by the UNCTAD TrainForTrade port management programme in the Philippines. Many women
have participated in the three cohorts of the programme and more are expected to join subsequent cycles.
Source: Philippine Ports Authority.
Vessel and cargo operations
PPS data provide interesting insights into the differences between regions. At the global level, for
the 2016–2020 period, compared with the previous ve-year average, the average cargo load per vessel
per arrival rose from 7,865 to 8,162 tons, a 3.9 per cent increase (indicator 16). However, these average
loads vary greatly between regions, reecting different types of operations and distances to market. Asia,
for example, has a high proportion of passenger ferry operations and an average load of only 2,313 tons,
REVIEW OF MARITIME TRANSPORT 2021
54
while Africa on average has longer journeys made by larger vessels and an average load of 15,681 tons.
Globally, there was little change in average vessel size which rose from 18,124 to 18,184 Gross Tons (GT)
(indicator 14) in the 2016–2020 period compared with the previous ve-year average (2015–2019).
One of the most direct impacts of COVID-19 was on the number of passengers. For the 2016–2020 period,
compared with the previous ve-year average, passenger numbers fell by 34 per cent (indicator 23). There
was similar fall in the number of cruise passengers, by 28 per cent (indicator 24). Between years 2019
and 2020 only, the number of passengers on ferries fell by 71 per cent and on cruise ships by 76 per cent.
Overall, modern ports show many similarities in their nancial and operations data as well as in their
declared policy proles and corporate structures. Nonetheless, each port entity has its own unique
characteristics. Some may have greater autonomy on pricing while for others this might require national-
level approval. Control over major investments, however, appears to be retained at the political level.
The pandemic has accelerated digitalization and decarbonization and key theme of future data analysis
will be on how performance levels are affected by such changes.
E. SUMMARY AND POLICY CONSIDERATIONS
This chapter has provided recent information in some key areas:
• Fleet size – Between 1 January 2020 and 1 January 2021, the world eet grew at the historically
low rate of 3 per cent, reaching 99,800 ships of 100 gross tons and above, equivalent to 2.13 billion
dwt of capacity in January 2021. Ships delivered in 2020 were mostly bulk carriers, followed by oil
tankers and container ships. During this period, ship deliveries declined by 12 per cent, partly due
to lockdown-induced labour shortages for marine-industrial activity. The number of ships sold for
recycling increased in 2020, although levels remained low by historical standards.
• Ship orders – During 2020, ship ordering declined by 16 per cent, continuing the downward trend
observed in previous years, though newbuilding orders surged during the rst half of 2021. As
owners and operators tried to cope with tight vessel supply, they turned to the second-hand
market, leading to higher second-hand prices. In several shipping segments, the current imbalance
between supply and demand has pushed up freight rates.
• Regulation – Regulatory changes to align shipping operations with decarbonization targets, along
with the energy transition creates an uncertain environment that will affect shipping, trade and
energy use and entail signicant costs. The short-term measure agreed recently at the IMO could
affect ship costs, ship travel distance, eet distribution, routing patterns, and use of different types
of vessels and may increase maritime logistics costs. Slow steaming to reduce fuel consumption
could result in the need to increase the number of ships.
To cater for the high demand for ships, shipping companies will need to expand their eets and scale
up investment. Meeting the decarbonization target will require retrotting or replacement. In developing
countries in particular it will be important to assess the implications of regulatory measures. For replacing
older vessels with larger and more fuel-efcient ships and making the corresponding landside investments,
investors will need more predictable regulatory environments, and greater certainty when trialling and
scaling up alternative fuels.
While adding to the pressures, the pandemic has often accelerated necessary changes. Many ports
for example, are embracing new strategies, capitalizing on ecommerce opportunities and preparing for
a future without carbon fuels by embarking on greener industrial port activities – evolving into green
smart ports that can become catalytic hubs for revenue generation and industrial growth. Key to all these
changes is digitalization which is redening port business success and facilitating intermodal operations.
Both seaports and inland ports will need support to keep up with digitalization, so as to function efciently
and seize opportunities as they arise.
2. Maritime transport and infrastructure
55
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3
This chapter reports on recent developments in freight
rates and transport costs. It covers 2020 and the rst half
of 2021, tracking changes in demand and supply across
key shipping markets. It considers the immediate outlook
for freight markets and examines the impact on prices.
As indicated in previous chapters, the COVID-19 pandemic
led to a sudden dip in international seaborne trade. But by
late 2020 there had been a swift rebound mainly in container
and dry bulk shipping. The recovery in container trade ows,
which was mainly on East-West containerized trade lanes,
created a series of logistical challenges and hurdles, pushed
up rates and prices, increased delays and dwell times,
and undermined service reliability. As a result, there have
been calls for more government intervention and regulatory
oversight to mitigate any unfair market practices.
Sustained higher container freight rates would increase costs
in global supply chains which could work their way through
to higher consumer prices, with adverse economic effects
globally – but particularly on the small island developing
states (SIDS) and the least developed countries (LDCs) whose
consumption and production depend more on international
trade. There have been similar surges in trade and prices for
dry bulk freight. The situation for tanker shipping, however,
has been very different: a drop in global fuel demand and high
carrying capacity have pushed tanker rates to record lows.
This chapter also highlights the structural determinants
that shape transport cost such as port infrastructure, trade
facilitation measures, liner shipping connectivity, and bilateral
trade imbalances.
Freight rates,
maritime transport
costs and their
impact on prices
MARITIME FREIGHT RATE MARKETS
SIMULATED IMPACT OF CONTAINER FREIGHT RATE SURGES
Hardest hit will be SIDS
Freight rates, maritime
transport costs and
their impact on prices
Record-breaking
freight rate levels
Tanker markets came under
pressure with tanker rates
reaching low levels
As of late 2020 and into 2021
freight rates surged across
containerised and dry bulk
shipping markets and hit
record highs
Skyrocketed amid
surge in demand for
container shipping
and limited capacity
including container
shortages and
congestion
at ports
Reached record
breaking levels,
driven by solid
growth in demand
that exceeded
eet growth
Fell to record lows as
global fuel demand
decreased and the
supply of vessel
carrying capacity
remained high
Container freight rates Dry bulk freight rates
Tanker freight rates
Increase in global
import price levels
LDC
+2.2%
LLDC
+0.6%
World
+1.5%
SIDS
+7.5%
SIMULATED IMPACT OF IMPROVING MARITIME TRANSPORT COST DETERMINANTS
Simulation is
conducted using
the new dataset
developed by
UNCTAD and
the World Bank
Port
infrastructure
Shipping
connectivity
-3.7%
Trade facilitating
environment
+243%
Simulation assumption:
Sustained increase in
container freight rates
Simulation results:
Increase in consumer
price levels by
country groupings
-4.4%
-4.1%
+11
%
Simulation
assumption:
Simulation results:
Reduction in
maritime import
transport costs
Improving
structural
determinants
3. Freight rates, maritime transport costs and their impact on prices
59
A. RECORD-BREAKING CONTAINER FREIGHT RATES
In 2020, lockdown measures and other impacts of COVID-19 suddenly cut the demand for containerized
goods. April and May 2020 were the worst months: by the end of May 2020, a record 12 per cent of global
container capacity was idle or inactive – 2.7 million TEU (BIMCO, 2020. Clarksons Research, 2021a). Liner
shipping companies responded with measures to mitigate costs, manage capacity and sustain freight
rates. By the second half of 2020, the situation had reversed, but this sudden boost in demand stumbled
into limited capacity and congested ports.
1. In mid-2020 high demand and limited capacity led to rocketing
spot freight rates
In the second half of 2020, demand for container shipping started to pick up and absorb spare capacity.
Vessel supply capacity remained limited but idle container shipping capacity levels started to decline
in line with growing demand as trade continued to recover. By the end of June 2020, idling was 9 per
cent, but by July this proportion had fallen to 6 per cent, and by August to 4 per cent. By the end of
September 2020, it was down to 3.5 per cent (going below the 4.1 per cent average level of idling for full
year 2019) (Clarksons Research, 2021a).
In 2020, global container eet capacity expanded by almost 3 per cent, to 281,784,000 dwt (see also
chapter 2), while container trade contracted by 1.1 per cent to 149 million TEU (gure 3.1).
Source: UNCTAD secretariat calculations. Demand is based on data from chapter 1 – gure 1.5, and supply is based on data
from Clarksons Research, Container Intelligence Monthly, various issues.
Notes: Supply data refer to total capacity of the container-carrying eet, including multipurpose and other vessels with some
container-carrying capacity. Demand growth is based on million TEU lifts.
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(estimate)
Demand
Supply
-10
-5
0
5
10
15
20
Figure 3.1 Growth of demand and supply in container shipping, 2007–2021, percentage
In an effort to maintain freight rates during the period of lower demand, carriers restricted capacity.
Then as demand picked up, they released more capacity but by that time the supply was being
constrained by other factors, notably port congestion and equipment shortages which kept vessels
waiting, especially in West Coast North America. The result was exacerbated disruption and
inefciency at port.
By the end of 2020, freight rates had surged to unexpected levels. This was reected in the China
Containerized Freight Index (CCFI) for both short- and long-term contracts (gure 3.2). In the second
quarter of 2020, the CCFI stood at 854 points, but by the fourth quarter was 1,250 points, and for the rst
and the second quarters of 2021 had reached new records, beyond 2,000 points.
MARITIME FREIGHT RATE MARKETS
SIMULATED IMPACT OF CONTAINER FREIGHT RATE SURGES
Hardest hit will be SIDS
Freight rates, maritime
transport costs and
their impact on prices
Record-breaking
freight rate levels
Tanker markets came under
pressure with tanker rates
reaching low levels
As of late 2020 and into 2021
freight rates surged across
containerised and dry bulk
shipping markets and hit
record highs
Skyrocketed amid
surge in demand for
container shipping
and limited capacity
including container
shortages and
congestion
at ports
Reached record
breaking levels,
driven by solid
growth in demand
that exceeded
eet growth
Fell to record lows as
global fuel demand
decreased and the
supply of vessel
carrying capacity
remained high
Container freight rates Dry bulk freight rates
Tanker freight rates
Increase in global
import price levels
LDC
+2.2%
LLDC
+0.6%
World
+1.5%
SIDS
+7.5%
SIMULATED IMPACT OF IMPROVING MARITIME TRANSPORT COST DETERMINANTS
Simulation is
conducted using
the new dataset
developed by
UNCTAD and
the World Bank
Port
infrastructure
Shipping
connectivity
-3.7%
Trade facilitating
environment
+243%
Simulation assumption:
Sustained increase in
container freight rates
Simulation results:
Increase in consumer
price levels by
country groupings
-4.4%
-4.1%
+11
%
Simulation
assumption:
Simulation results:
Reduction in
maritime import
transport costs
Improving
structural
determinants
REVIEW OF MARITIME TRANSPORT 2021
60
2. Container shortages, port congestion and delays result in higher freight
rates, fees and surcharges
Towards the end of 2020 and into 2021, container shortages and congestion at ports, along with other
disruption, led to record container freight rates, notably on the routes from China to Europe and the
United States. These are reected in the Shanghai Containerized Freight Index (SCFI) which covers
cargo departing from Shanghai, China (gure 3.3). In June 2020, SCFI spot rate on the Shanghai-Europe
route was less than $1,000/TEU but by the end of 2020 had reached around $4,000/TEU and remained
rm throughout the rst quarter of 2021. By the end of April, despite a 3 per cent increase in supply
capacity (Clarksons Research, 2021a), the SCFI spot freight rate on the Shanghai-Europe route surged
to $4,630/TEU, and by the end of July has reached $7,395/TEU.
Freight rates also escalated on the China-United States trade lane, and, faced with backlogs and longer
waiting times, shipping lines have also been adding extra fees and surcharges. In the last quarter of 2020,
on the Shanghai-West Coast North America route capacity expanded by 5 per cent and in the rst quarter
of 2021 by a further 7 per cent (Clarksons Research, 2021a). Nevertheless, the SCFI spot rate reached around
$4,500/ forty-foot equivalent unit (FEU) in April 2021, compared to $1,600/FEU in April 2020, and climbed
further to $5,200/FEU in July 2021. The trend was similar on routes from Asia to the East Coast. In the rst six
months of 2021, SCFI spot rates on the Shanghai-East Coast North America route more than doubled, and
Source: UNCTAD secretariat, based on data from Clarkson Shipping Intelligence Network.
0
2 000
4 000
6 000
8 000
10 000
12 000
July 2011
July 2012
July 2013
July 2014
July 2015
July 2016
July 2017
July 2018
July 2019
July 2020
July 2021
Shanghai-Europe
(base port) ($/TEU)
Shanghai-WC America
(base port) ($/FEU)
Shanghai-EC America
(base port) ($/FEU)
Shanghai-W Africa
(Lagos) ($/TEU)
Shanghai-S Africa
(Durban) ($/TEU)
Shanghai-S America
(Santos) ($/TEU)
10 067
30 July 2021
9 720
30 July 2021
8 102
30 July 2021
Figure 3.3 Shanghai Containerized Freight Index weekly spot rates,
1 July 2011 to 30 July 2021, selected routes
Source: Clarkson Shipping Intelligence Network Timeseries, Shanghai Shipping Exchange.
Note: The CCFI tracks spot and contractual freight rates from Chinese container ports for 12 shipping routes across the
globe, based on data from 22 international carriers.
0
500
1 000
1 500
2 000
2 500
2011
Q1
2011
Q3
2012
Q1
2012
Q3
2013
Q1
2013
Q3
2014
Q1
2014
Q3
2015
Q1
2015
Q3
2016
Q1
2016
Q3
2017
Q1
2017
Q3
2018
Q1
2018
Q3
2019
Q1
2019
Q3
2020
Q1
2020
Q3
2021
Q1
854
2020-Q2
2 164
2021-Q2
1 961
2021-Q1
1 250
2020-Q4
910
2020-Q3
Figure 3.2 CCFI composite index, 2011-2021 (quarterly)
3. Freight rates, maritime transport costs and their impact on prices
61
by the end of July 2021 had reached $10,067/FEU (gure 3.3). Moreover, this does not take into account the
premiums cargo owners were often charged to get any certainty that their boxes would be moved promptly.
The surge in spot freight rates also extended across developing regions, including South America and Africa.
On the China to South America (Santos) route the rate had been $959/TEU in July 2020 but by the end of
July 2021 had reached $9,720/TEU. Over the same period, rates on the Shanghai to West Africa (Lagos)
route increased from $2,672/TEU to $8,102/TEU. There was also a surge in rates from China to the Arab
region. Box 3.1 provides further information on the impact of COVID-19 on maritime freight in the Arab region.
Box 3.1
Impact of COVID-19 on maritime freight rates in the Arab region
Fluctuations in freight rates reect changes in lockdown policies and varying speeds of recovery, as
well as the impact of shortages of both containers and ships and congestion in key ports and shipping
nodes. These surges are likely to be amplied in most of the low- and middle-income countries of the
Arab region, especially those suffering from conicts or economic or nancial crises which have had
major impacts on patterns of production and consumption – and on maritime freight rates. Between
October 2020 and June 2021 the SCFI from Shanghai to Dubai rose by 176 per cent and from Shanghai
to the Mediterranean ports by 400 per cent.
Source: UNCTAD/ESCWA calculations based on data from Clarksons Research.
To alleviate the impact on consumer prices, some countries have adopted special measures. In Lebanon,
for example, when calculating the customs fees on imported goods, the customs authorities are still using
the ofcial exchange rate, which is far below the black-market exchange rate. In Jordan, when calculating
customs fees on imported goods, customs authorities have put a ceiling on freight rates. According
to the International Chamber of Navigation in Beirut, both measures did slightly alleviate the impact on
consumers. But these subsidies may be difcult to sustain, so it will be important to consider the economic
and nancial evidence, to see how they compare with more conventional trade facilitation procedures.
There have also been initiatives to address the impact of COVID-19 at the regional level. In October 2020,
ESCWA/UNCTAD published a working paper ‘COVID-19: Impact on Transport in the Arab Region’, which
was summarized in a policy brief. On 24 November and 8 December there was a remote round table within
the activities of the 21
st
session of ESCWA committee on Transport and Logistics. This was serviced by a
parliamentary paper on the ‘Impact of the COVID-19 pandemic on transport in the Arab region’.
In addition, in partnership with UNCTAD and other UN regional commissions, ESCWA implemented
several activities within the UN Development Account project on transport and trade connectivity in the
age of pandemics. This included producing material on ‘Coronavirus Disease (COVID-19): Trade and
Trade Facilitation Responses in the Arab Region’ as well as a report on the ‘Collective Application of eTIR
Across a Land Transport Corridor Connecting East Mediterranean to GCC countries (Lebanon-UAE)’.
On 16–17 December 2020, in cooperation with ECE, International Road Transport Union (IRU) and
the Euromed Transport Support Project, ESCWA developed three questionnaires for banks, rms and
policy makers aimed at gauging the conditions for trade nancing in the region.
ESCWA also organized an online capacity building workshop on ‘Implementation of the eTIR International
System in the ESCWA region’. Also, in cooperation with ECE, it helped connect the national customs
system of Tunisia to the international eTIR system.
Finally, ESCWA has provided substantive support and input to the initiative led by the Department of
Transport and Tourism of the League of Arab States on addressing the impact of COVID-19 – with
recommendations that were categorized according as short term (containing), medium term (recovery)
and long term (resilience to future crises). These recommendations were adopted by the 33
rd
session
of the Council of the Arab Ministers of Transport, held in Alexandria, Egypt, on 21–22 October 2020.
Contribution from ESCWA.
2 000
3 000
4 000
5 000
6 000
7 000
1 000
Evolution of SCFI spot rates from Shanghai to Arab ports
0
Jan 2019
Mar 2019
May 2019
Jul 2019
Sept 2019
Nov 2019
Jul 2020
Mar 2021
Jan 2021
Nov 2020
Sept 2020
May 2021
Jan 2020
Mar 2020
May 2020
Shanghai-Mediterranean
(Base port) $/TEU
Shanghai-Persian Gulf
and Red Sea (Dubai) $/TEU
REVIEW OF MARITIME TRANSPORT 2021
62
High shipping costs arising from logistical bottlenecks and lack
of containers and equipment
Since late 2020, shipping costs have increased in part because of a shortage of containers. Containers are
shipped full from export-oriented locations, notably in Asia, and many usually return empty. As Asia slowly
began to recover, other countries remained under national lockdown and restriction so the importing
countries could not return containers. The resulting shortage of empty containers was exacerbated as
carriers introduced blank sailings where empty containers were left behind and failed to be repositioned.
These impediments led to higher container dwell times at ports, and empty containers not returning to
the system where they were most needed (UNCTAD, 2021). This increased shipping costs as shippers
were reported to be paying premium rates to get containers back (CNBC, 2021), in addition to surcharges
arising from port congestion and delays, including delays in returning equipment.
With containers scarce and ports suffering from congestion, shippers, freight forwarders, and importers
were charged increasingly higher demurrage and detention fees. Between 2020 and 2021, across the
world’s 20 biggest ports, the average demurrage and detention charge doubled – equivalent to $666 for
each container (Container xChange, 2021).
3. Surge in spot freight rates leading to increases in contracted rates
An important part of containerized trade is carried out at condential contract rates negotiated between
shippers and shipping lines. These rates are inuenced by prevailing market conditions so in 2021 when
spot rates were high, contract rates were correspondingly high and some were negotiated quickly to
secure deals. Shipping lines typically gave priority to larger and more established shippers – leaving out
smaller ones who were often unable to renegotiate. For their part, shippers aiming to hedge against
future increases and uncertainties were increasingly seeking multi-year contracts. In 2021, many shippers
signed trans-Pacic volume contracts for between $2,000/FEU and $3,000/FEU (Hellenic Shipping
News, 2021b) – far higher than previous rates on the same routes. See also table 3.1 on contract freight
rates which includes all surcharges including terminal handling charges.
Source: UNCTAD, based on data provided by TIM Consult Market Intelligence https://timconsult.com/service_areas/transport/
benchmarking/.
Note: The data set provides regional averages for forty-foot container dry cargo freight, as negotiated for routes where rates were
available for at least 5 shippers and at least 500 TEU per year on port-pair basis.
Rates are “gate-in gate-out”, i.e., including terminal handling charges and all charges and surcharges of ocean transport. Not included are
pre- and on-carriage as much as classical administrative services of forwarders (customs clearance, booking and invoice control fees, etc.).
The average is unweighted, based on representative main ports. Trade imbalance is also impacting freight rates.
Table 3.1 Contract freight rates, inter-regional, 2018–2020, $ per 40-foot container
(FEU)
From To Average 2018 2019 2020
Africa
Africa 1 862 1 812 1 849 1 924
Asia 758 748 750 775
Europe 1 607 1 431 1 643 1 747
Latin America 1 950 2 010 1 860 1 979
Asia
Africa 1 946 1 800 1 927 2 112
Asia 768 737 747 821
Europe 1 848 1 782 1 847 1 916
Latin America 2 198 2 290 2 075 2 230
North America 2 580 2 426 2 603 2 711
Oceania 1 803 1 770 1 790 1 850
Europe
Africa 1 701 1 595 1 650 1 858
Asia 947 967 870 1 004
Europe 887 804 881 976
Latin America 1 232 1 019 1 302 1 376
North America 1 838 1 518 1 742 2 256
Oceania 2 002 1 996 1 933 2 077
Latin America
Africa 1 910 1 778 1 951 2 000
Asia 1 796 1 623 1 963 1 802
Europe 1 751 1 313 1 977 1 961
Latin America 1 529 1 349 1 699 1 539
North America 1 716 1 521 1 882 1 745
North America
Africa 2 994 2 890 3 112 2 981
Asia 1 129 1 009 1 111 1 269
Europe 1 097 858 1 109 1 323
Latin America 1 353 1 254
1 318 1 486
North America 1 516 1 534 1 429 1 584
Oceania 2 722 2 538 2 634 2 996
3. Freight rates, maritime transport costs and their impact on prices
63
The new data set, provided by TIM Consult Market Intelligence as per table 3.1, enables an overview
of actual basic freight rates on different routes, including inter-regional routes, and their development
over time.
1
Imbalanced trade ows mean that transport costs tend to be higher in the direction of the
high-demand region thereby impacting freight rates (Jonkeren, Olaf, et al, 2011). Between 2018 and 2020,
rates on the Asia-Europe leg, for example, were twice as high as those on the Europe-Asia leg. Similarly,
rates for exports from Asia to North America were twice as import rates. As for the Asia-Africa trade the
ratio was 2.6, and intra-African freight rates were 2.4 times higher than intra-Asian rates. Over this period
the most volatile rates were those to and from Latin America.
4. Trends in charter market rates in sync with spot freight rates
In the rst half of 2020, the COVID-19 crisis also reduced container ship charter rates, especially for larger
ships. This was a period of falling demand, ship idling, capacity withdrawal, and blank sailings. But the
situation reversed in the second half of 2020 with increasing demand for ships of all sizes. In June 2020,
the New ConTex index fell to 308 points but by December 2020 had more than doubled to 687 points
(gure 3.4). In 2021, the continuing imbalance between demand and supply pushed the ConTex average
to unforeseen levels reaching 1,645 points in June and 2,348 in July.
5. Container shipping prots are high, as are short and medium terms
freight rates
High freight rates have boosted the prots of global container shipping companies. In the rst quarter
of 2020 their operating prots – earnings before interest and tax – were $1.6 billion, but in the same
quarter of 2021 reached $27.1 billion. In 2020 the full-year prot of these carriers was around $25.4 billion,
but 2021 it is likely to be an unprecedent $100 billion (Drewry, 2021). And this at a time of pandemic-related
disruptions, congestion at ports and a persistent shortage of containers.
1
TIM Market Intelligence Initiative Global Ocean Transport.
Overview & Methodology: TIM Consult are operating the Market Intelligence Initiative (MII) in global ocean transport
(Full Container Load and Less Than Container Load) in support of a Community (consortium) of world-class enterprises
(shippers only). The analyses cover ocean transport on more than 12,000 port pairs, pre- and on-carriage (all modes) and
door-door-transport. The benchmarking as well as the monitoring of freight indices and service levels is updated on a
monthly, quarterly, and annual basis. All input data is provided by shippers and represents actual agreements and volume
allocations. No unnegotiated or not actually allocated rate information is included. Continuous data input is equivalent
to approximately ve per cent of world container transport. Data input is carefully cleansed by an expert team plus all
strategic and operative drivers of rate and service levels as much as procurement performance claried. The analyses and
assessment of shippers’ agreements are conducted by accurate segmentation (by box type, box size, port pair, process
setup) and harmonization (normalization), taking into account all cost and service level drivers in full transparency. The
rate benchmarking and the index information provided to UNCTAD are given on gate-in-gate-out level including all ocean
transport-related charges and surcharges. Not included are pre- and on-carriage as much as classical administrative
services of forwarders (customs clearance, booking and invoice control fees, etc.). MII members range from 1,000 TEU
to 500,000 TEU per year. www.timconsult.com.
Source: UNCTAD secretariat, based on data from the New ConTex index produced by the Hamburg Shipbrokers Association.
See http://www.vhss.de (Accessed on 25 July 2021).
Notes: The New ConTex is based on assessments of the current day charter rates of six selected container ship types, which
are representative of their size categories: Type 1,100 TEUs and Type 1,700 TEUs with a charter period of one year, and
Types 2,500, 2,700, 3,500 and 4,250 TEUs with a charter period of two years.
Index base: October 2007 – 1,000 points.
0
500
1 000
1 500
2 000
2 500
July 2011
July 2012
July 2013
July 2015
July 2016
July 2017
July 2018
July 2019
July 2020
July 2021
July 2014
2 348
21 July 2021
308
18 June 2020
Figure 3.4 New ConTex index, July 2011–July 2021
REVIEW OF MARITIME TRANSPORT 2021
64
Increased earnings have encouraged carrier to order new ships. At the beginning of 2021 the orderbook
for container ships was similar to that in 2018. As noted in chapter 2, the surge in new orders was also
prompted by low prices for new, larger vessels and by the availability of ship nancing.
Following the 2008–2009 nancial crisis there was a similar rush in orders such that the container ship
order book represented about 60 per cent of the global eet, and new vessels started entering the market
only a year after the crisis, leading to overcapacity and low freight rates. This is unlikely to happen now.
Indeed the new ships are still unlikely to meet the demand. In recent years, shipping companies were
faced with low earnings and uncertainties about complying with new IMO emission requirements, so
had postponed placing orders (FitchRatings, 2021a). As it usually takes two to three years between the
placement of vessel orders and delivery, the supply-demand imbalance is unlikely to be resolved in the
short term so rates should remain high.
Indeed even the arrival of new ships may not be enough to reduce and stabilize container freight rates.
Global freight rates will remain high until shipping supply-chain disruptions are unblocked and back to
normal, and port constraints and terminal efciencies are tackled (Hellenic Shipping News, 2021a). This
would entail investing in new solutions, including infrastructure, freight technology and digitalization, and
trade facilitation measures.
Moreover, even when they have new capacity, container lines faced with prolonged port congestion and
closures may take capacity out of the system – keeping freight rates high. It can be argued that port
congestion on the United States West Coast was initially caused by carriers responding to increased
demand by inserting more capacity – but ports were then unable to handle the resulting surge. Moreover,
despite recent improvements, overall port performance remains the lowest it has been in ten years of
records (Global Maritime Hub, 2021).
All the above suggests that high freight rates may be sustained in both short and medium terms. This
could have lasting effects on trade and global supply chains. By end of 2020 and early 2021, Europe was
facing shortages of consumer goods imported from Asia – from home furnishings, bicycles and sports
to children’s toys and dried fruits. Some companies have stopped exporting to certain locations while
others have been looking to shorten their supply chains by looking for goods or raw materials from nearer
locations (Financial Times, 2021).
Another example is Viet Nam’s exports of pepper. According to the Viet Nam Pepper Association, higher
logistics costs have resulted in a loss of export markets. In 2020, for exports to the United States, the
cost per 40-foot container was $2,000 to $3,000 but in the rst six months of 2021 this had soared to an
average $13,500. For exports to the European Union there was a corresponding increase, from $800-1,200
to $11,000. This caused importers to switch to pepper from Brazil; for the United States the shipping cost
is only a third of that from Viet Nam and for the European Union only one tenth (Vietnamplus, 2021).
Shipping cost escalation, if sustained, would not only affect exports and imports, as well as production
and consumer prices, but also the prospects for short- and medium-term economic recovery. A
number of governments are worried about this, including China, Republic of Korea, United States, and
Viet Nam, and have raised concerns about the shipping companies.
2
In China, faced with record highs in
September 2020, the authorities had put pressure on carriers on the Transpacic routes for both pricing
and capacity management and there were suggestions of setting a ceiling (Financial Times, 2020). In the
Republic of Korea, to ensure that small and mid-sized shippers have access to capacity the government
has announced a plan to subsidize shipping rates – a 20 per cent discount on freight rates and guaranteed
shipping space if they sign long-term service contracts with domestic shipping lines (JOC.com, 2021).
B. DRY BULK FREIGHT RATES ALSO REACH HIGHS
In the rst half of 2020, the demand shock from the COVID-19 pandemic added downward pressure to an
overly supplied market and led to a drop in dry bulk shipping freight rates. The second half, in contrast, saw
a rebound in demand for dry bulk cargo, particularly for iron ore and grain into China. Together with slower
growth in the active eet this pushed up freight rates. This was reected in the Baltic Exchange Dry Index,
which measures the cost of shipping various raw materials, such as coal, iron ore, cement, grain and fertiliser
(gure 3.5). In February 2020 this stood at only 461 points but by July 2021 had reached 3,257 points.
2
See: https://www.ft.com/content/a013548c-9038-4798-9b2e-f431c4eb2fba; https://splash247.com/chinese-
authorities-say-there-needs-to-be-a-rates-ceiling-saade/; https://www.lloydsloadinglist.com/freight-directory/news/EU-
shippers-call-for-box-line-competition-scrutiny/78198.htm#.YN3KJ0w6-Uk; and https://www.bloomberg.com/news/
articles/2021-02-04/freight-cost-pain-intensies-as-pandemic-rocks-ocean-shipping.
3. Freight rates, maritime transport costs and their impact on prices
65
Freight rates were high through the rst half of 2021 as a result of continuing higher demand, combined
with fewer new vessel deliveries and increased scrapping activity. Rates were also affected by delays
caused by port congestion. The number of vessels caught up in port congestion rose from 4 per cent
of the eet in the fourth quarter of 2020 to 5 per cent in the rst quarter of 2021. This was mainly due
to increases of exports of iron ore and grain products from Brazil which blocked up to 100 Capesize
and Panamax vessels in Brazilian ports during February and March 2021 (Danish Ship Finance, 2021).
The strength of the dry bulk market was good for carriers. In May 2020 the average monthly earnings of
all bulkers were $4,894/day, but by June 2021 they were $27,275/day – the highest rates in a decade
(gure 3.6).
Source: UNCTAD, based on data from Clarkson Shipping Intelligence Network.
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
Jan 2010
Jun 2010
Nov 2010
Apr 2011
Sept 2011
Feb 2012
Jul 2012
Dec 2012
May 2013
Oct 2013
Mar 2014
Aug 2014
Jan 2015
Jun 2015
Nov 2015
Apr 2016
Sept 2016
Feb 2017
Jul 2017
Dec 2017
May 2018
Oct 2018
Mar 2019
Aug 2019
Jan 2020
Jun 2020
Nov 2020
Apr 2021
3 838
May 2010
3 257
July 2021
461
February 2020
Figure 3.5 Baltic Exchange Dry Index, January 2010–July 2021
Source: UNCTAD, based on data from Clarkson Shipping Intelligence Network.
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2018
2019
2020
2021
15 934
July 2010
8 158
March 2019
8 971
June 2020
Figure 3.6 Average weighted earnings all bulkers ($/day), July 2001–July 2021
Looking ahead, dry bulk demand should continue to grow and the capacity should be manageable so
rates are likely to remain high. The orderbook is only around 6 per cent of the existing eet capacity, the
lowest level in three decades (Clarksons Research, 2021b). Future freight rates will be largely determined
by demand growth, particularly from China, but the market will also be affected by the ongoing energy
transition and shifts in fuel mix choices. However, high freight rates could stimulate newbuild orders so that
in the medium term, supply capacity could exceed demand.
C. TANKER FREIGHT RATES DIP TO THE LOWEST LEVELS EVER
In the rst half of 2020, there was a surge in tanker freight rates, boosting prots for tanker shipping
companies. In the second half of the year the COVID-19 impacts weakened demand and rates started to
drop in an oversupplied market. By January 2021, oil tanker spot earnings were $5,237/day, and by July
had fallen to $2,753/day, the lowest levels ever (gure 3.7). Given current low global demand and future
uncertainties, short-term tanker freight rates will probably remain low.
REVIEW OF MARITIME TRANSPORT 2021
66
D. ECONOMIC IMPACT OF HIGH CONTAINER FREIGHT RATES,
PARTICULARLY IN SMALLER COUNTRIES
Containers offer efcient shipping services for a wide range of consumer and industrial commodities,
including meats, beverages, textiles, and computers and by 2020 accounted for 17 per cent of the total
volume of seaborne trade.
3
So, a surge in container freight rates will add to production costs which can
feed through to consumer prices. This can slow national economies, particularly the structurally weak ones
such as SIDS, LDCs, and landlocked developing countries (LLDCs) – whose consumption and production
patterns are highly trade dependent. In 2019, for LDCs and LLDCs, merchandise imports made up 24 per
cent of GDP, and for SIDS 58 per cent – compared with the global average of 21 per cent.
4
1. High freight rates increase import and consumer prices, especially
in SIDS
UNCTAD has simulated the impact of the current surge in container freight rates, concluding that at the
global level import price levels will rise by 10.6 per cent, with an estimated one-year time lag (gure 3.8).
This is an average for 200 economies for which data are available. The container freight rate surge refers
to a 243 per cent increase in the CCFI between August 2020 and August 2021 and the simulation
assumes that the levels in August 2021 will be sustained over the simulation period (technical note 1).
The impact is greatest in SIDS most of whose imports arrive by sea. In 2019, globally 27 per cent of total
imports were seaborne, but for SIDS the proportion was 79 per cent.
5
As a result, the impact on their
import prices is more than twice the global level, at 24 per cent. The situation is reversed for LLDCs:
on average only one per cent of imports are transported by sea, so their import prices are simulated to
increase by only 3.2 per cent.
6
Increases in import prices also feed through to consumer prices. On average, for 198 economies for which
data were available the global increase in prices between 2020 and 2023 is simulated at 1.5 per cent
(gure 3.8). Consumer prices are less affected compared with import prices, due to the lower proportion
of products that involve international shipping in the consumer basket. The level of increase also depends
3
UNCTAD estimation.
4
UNCTADstat (https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=90759, accessed 26 July 2021).
For the purposes of the analyses in this chapter, the denitions of LDC, LLDC, and SIDS follow the denitions of the
Ofce of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island
Developing States (UNOHRLLS) (https://www.un.org/ohrlls/content/proles-ldcs, https://www.un.org/ohrlls/content/
list-lldcs, https://www.un.org/ohrlls/content/list-sids, accessed 26 July 2021). The denition of SIDS includes Non-UN
Members and Associate Members of the Regional Commissions.
5
The share of maritime transport in SIDS total merchandise imports is calculated based on Comtrade Plus
(https://comtrade.un.org/, accessed 16 June 2021) data for nine economies for which import value by mode of transport
is available (i.e., Antigua and Barbuda, Belize, Comoros, Grenada, Guyana, Mauritius, São Tomé and Príncipe, Seychelles,
and Suriname). The corresponding gure for non-SIDS is calculated based on Comtrade Plus data for 59 economies for
which import value by mode of transport is available.
6
The share of maritime transport in LLDC total merchandise imports is calculated based on Comtrade Plus data for
12 economies for which import value by mode of transport is available (i.e., Armenia, Azerbaijan, Botswana, Eswatini,
Kyrgyzstan, Lao People’s Democratic Republic, Mongolia, North Macedonia, Plurinational State of Bolivia, Republic of
Moldova, Rwanda, and Zambia).
Source: UNCTAD, based on data from Clarkson Shipping Intelligence Network.
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
Jul 2011
Jan 2012
Jul 2012
Jan 2013
Jul 2013
Jan 2014
Jul 2014
Jan 2015
Jul 2015
Jan 2016
Jul 2016
Jan 2017
Jul 2017
Jan 2018
Jul 2018
Jan 2019
Jul 2019
Jan 2020
Jul 2020
Jan 2021
Jul 2021
3 749
June 2021
2 753
July 2021
5 237
January 2021
Figure 3.7 Average earnings, all tankers, July 2011–July 2021 (United States dollar per day)
3. Freight rates, maritime transport costs and their impact on prices
67
on the extent to which wholesalers and retailers pass on the price increases; concerned about market
share they may choose to absorb the import price increases by reducing their prots.
7
In SIDS, the simulated increase is higher than the global average, at 7.5 per cent, because of their
dependence on imports. The increase is also higher in LDCs than the global average at 2.2 per cent,
partially because in high-ination economies
8
rms tend to assume that increases in import prices will be
persistent, and respond by increasing their prices.
9
In LLDCs, the increase in consumer prices is lower, at
0.6 per cent, owing to their limited dependence on maritime transport for imports.
2. Variations in price impacts across economies and types of goods
The adverse impacts of higher freight prices are not limited to SIDS and LDCs. Many other countries
could see signicant increases in consumer prices – ranging from 1.2 per cent in Brazil to 4.2 per cent
increase in Slovakia (gure 3.9). It should be noted, however, that the simulation is limited to 27 European
Union countries and 16 other major countries because it requires detailed information on sectoral-level
input-output structures. The simulation assumes that all current freight increases and the corresponding
increases in production costs are fully passed to consumers – with no change in other value-added
components of production costs, such as wages and salaries (technical note 2).
The impact is generally greater in smaller economies. Thus, in Estonia consumer prices would rise by
3.7 per cent and in Lithuania by 3.9 per cent compared with only 1.2 per cent in the United States
and 1.4 per cent in China. This partly reects their greater ‘import openness’ – the ratio of imports to
GDP – which is typically higher in smaller economies – 55 per cent in Lithuania and 60 per cent in Estonia,
compared with 11 per cent in the United States and 15 per cent in China. Smaller economies are also
likely to have a higher proportion of intermediate imported goods such as raw materials and components
used for domestic production of consumer goods and services – 16 per cent in Lithuania and Estonia,
compared with only 4 per cent in China and the United States.
7
An empirical literature on exchange rate pass-through provides evidence that the low sensitivity of consumer prices to
import price and exchange rate uctuations can be explained by “double marginalization”, wherein local wholesalers and
retailers reduce their margins in response to exchange rate depreciations and import price increases to maintain market
share at the retail level (Campa and Goldberg, 2010, and Hellerstein, 2008).
8
Consumer price ination in LDCs recorded 22.4 per cent in 2020, while the global ination rate was 2.8 per cent
(excluding the Bolivarian Republic of Venezuela due to its exceptionally high rate of ination) according to UNCTADstat
(https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=37469, accessed 6 August 2021).
9
An empirical literature on exchange rate pass-through provides evidence that emerging economies generally display
higher sensitivity of domestic prices to exchange rate and import price uctuations than developed countries, and the
degrees of price sensitivity are affected by ination rate levels and monetary policy credibility (Schmidt-Hebbel and
Tapia, 2002; Choudhri and Hakura, 2006; McCarthy, 2007; Reyes, 2007; World Bank, 2014; Ha et al., 2020). The
rationale for the correlation between price sensitivity and ination is provided by the Taylor’s hypothesis that rms in a
higher and persistent ination environment perceive exchange rate uctuations to be more persistent and respond via
price-adjustments (Taylor, 2000; Ca’ Zorzi, et al., 2007).
Sources: UNCTAD calculations based on data provided by Clarksons Research, Shipping Intelligence Network (accessed
2 September 2021), the IMF, International Financial Statistics and Direction of Trade Statistics (accessed 1 June 2021),
UNCTADstat (accessed 1-2 June 2021), and the World Bank, World Integrated Trade Solution (accessed 2 June 2021) and
Commodity Price Data (The Pink Sheet, accessed 23 August 2021).
Note: Scenario with a 243 per cent freight rate increase compared to no freight rate increase (i.e., same freight rate level as
August 2020) as a percentage of the import or consumer price level. The impacts of the container freight rate surge on prices
are based on a 243 per cent increase in the CCFI between August 2020 and August 2021. See technical note 1 for the detail
of the methodology.
0
5
10
15
20
25
30
8.7
LDC
3.2
LLDC
24.2
SIDS
10.6
World
(%)
0
1
2
3
4
5
6
7
8
2.2
LDC
0.6
LLDC
7.5
SIDS
1.5
World
(%)
Import price increases Consumer price increases
Figure 3.8 Simulated impact of current container freight rate surge on import and consumer
price levels
REVIEW OF MARITIME TRANSPORT 2021
68
Higher freight rates have a greater impact on the consumer prices of some goods than others, notably
those which are more highly integrated into global supply chains, such as computers, and electronic
and optical products (gure 3.9).
10
These often have to be shipped from East Asia towards consumption
markets in the West with correspondingly higher shipping costs. For these goods, international shipping
costs account for 2.6 per cent of the consumer price, compared with 1.2 per cent on average for other
goods.
11
Higher prices will make such goods less affordable, so reduce consumer welfare.
Other goods for which surging freight rates are likely to increase consumer prices include low-value-added
items such as furniture and textiles, wearing apparel and leather products.
12
Production of these goods
is often fragmented across low-wage economies remote from major consumer markets. For example,
international shipping costs account for 2.2 per cent of the consumer price for furniture and 1.8 per cent
for textiles, wearing apparel and leather products.
3. Impact on global production processes and costs
Besides the consumer goods and services, other products that are closely integrated into global supply
chains will be affected by surging freight rates. This is the case, for example, for investment-related
products – capital goods and services used to create xed assets, such as construction and computer
programming (gure 3.10, technical note 2). Capital goods are more dependent than non-capital goods
on supplies from foreign countries (Lian et al., 2020).
10
Asia-Pacic Economic Cooperation (APEC), 2021 identied three key global value chain (GVC) industries in the APEC
region based on their high values of GVC-related trade. They are computer, electronic and optical equipment, chemicals,
and motor vehicle, trailers and semi-trailers. Among these three industries, computer, electronic and optical equipment
showed the highest GVC participation rate in the APEC region.
11
World average gures based on the World Input-Output Database (WIOD) used for the simulation. For this calculation (and
the following calculations for furniture and textiles, wearing apparel and leather products), international shipping costs
refer to only direct shipping costs of the nal products from producer countries to consumer countries, and do not include
shipping costs to source intermediate goods (i.e., raw materials and parts and components) used in the production
process of the nal products.
12
For the purpose of the present analysis, furniture refers to furniture and other manufacturing sectors
(i.e., divisions 31 and 32 in International Standard Industrial Classication, Rev.4, https://unstats.un.org/unsd/publication/
seriesm/seriesm_4rev4e.pdf, accessed 30 July 2021).
Sources: UNCTAD calculations based on the WIOD (accessed 7–8 June 2021) developed by Timmer et al., 2015, Clarksons
Research, Shipping Intelligence Network (accessed 2 September 2021), UNCTADstat (accessed 24 June 2021), and the
Centre d'Études Prospectives and d'Informations Internationales, Gravity Database (accessed 21 May 2021).
Note: The impacts of the container freight rate surge on prices are based on a 243 per cent increase in the CCFI between
August 2020 and August 2021. The simulated impacts on price levels are long-term impacts, i.e., the simulation assumes that
the current container freight rate surge and the corresponding increases in production costs are fully passed to consumers.
See technical note 2 for the detail of the methodology.
By country
AUS
AUT
BEL
BGR
BRA
CAN
CHE CHN
CYP
CZE
DEU
DNK
ESP
EST
FIN
FRA
GBR
GRC
HRV
HUN
IDN
IND
IRL
ITA
JPN
KOR
LTU
LUX
LVA
MEX
MLT
NLD
NOR
POL
PRT
ROU
RUS
SVK
SVN
SWE
TUR
TWN
USA
1
2
3
4
100 1 000 10 000
GDP (billions of US dollars)
Impact on consumer prices (%)
Figure 3.9 Simulated impacts of the container freight rate surge on consumer price levels,
by country and by product
By product (top 10 products)
6.4
Machinery and equipment N.e.c.
6.8
Fabricated metal products,
except machinery and equipment
6.9
Motor vehicles, trailers and
semi-trailers
7.2
Other transport equipment
7.5
Electrical equipment
7.5
Basic pharmaceutical products and
pharmaceutical preparations
9.4
Rubber and plastic products
10.2
Textiles, wearing apparel and
leather products
10.2
Furniture; other manufacturing
11.4
Computer, electronic and
optical products
Impact on
consumer prices (%)
3. Freight rates, maritime transport costs and their impact on prices
69
Similarly, intermediate products are more strongly embedded in global supply chains than consumer
products. These include raw materials, parts and components, and services used in production processes,
such as banking and consultancy. For the dataset in the simulation, imported goods account for 14.6 per
cent of total intermediate products used in domestic production processes, compared with 9.0 per cent
for consumption products.
The impact is naturally lower for locally produced or assembled goods. Their production costs include
not only the costs of intermediate products but also local value-added components such as labour. In the
dataset used for the present simulation, globally these production factors account on average for 46 per
cent of production costs. However, if the increase in prices triggers wage increases, this would increase
the costs beyond those simulated.
Sustained increases in freight rates will cause greater increases in production costs in smaller economies
and thus undermine their comparative advantages (gure 3.11). Smaller countries will also nd it more
difcult to move up the value chain if they face higher costs of importing high-technology machinery and
industrial materials. This will hamper their efforts to achieve the Sustainable Development Goals.
4. Higher costs and maritime transport disruption threaten the recovery
in global manufacturing
Manufacturers in the United States and Europe rely mainly on industrial supplies from China and other
East Asian economies, so continued cost pressures, disruption and delays in containerized shipping will
hinder production. The present analysis shows that a 10 per cent increase in container freight rates, along
with supply chain disruptions, is expected to decrease industrial production in the United States and
the euro area by more than 1 per cent cumulatively (gure 3.12, technical note 3).
13
In China, production
is expected to decrease by 0.2 per cent. In the short to medium term these disturbances are likely to
undermine recovery in manufacturing in major economies.
13
In the present analysis, the euro area refers to 16 countries out of 19 euro area countries where all data are available for
the simulation.
Sources: UNCTAD calculations based on the WIOD (accessed 7-8 June 2021) developed by Timmer et al., 2015, Clarksons
Research, Shipping Intelligence Network (accessed 2 September 2021), UNCTADstat (accessed 24 June 2021), and the
Centre d'Études Prospectives and d'Informations Internationales, Gravity Database (accessed 21 May 2021).
Note: The impacts of the container freight rate surge on price levels are based on a 243 per cent increase in the CCFI between
August 2020 and August 2021. The simulated impacts on price levels are long-term impacts, i.e., the simulation assumes
that the current container freight rate surge and the corresponding increases in production costs are fully passed to nal users
(i.e., consumers and rms). See technical note 2 for the detail of the methodology.
11.9
3.1
1.7
3.3
1.4
Import prices
Consumer prices
Investment−related
product prices
Intermediate product
prices
Production costs
Impact on prices (%)
Figure 3.10 Simulated impacts of
container freight rate surges
on prices for importers,
consumers and rms, global
average
AUS
AUT
BEL
BGR
BRA
CAN
CHE
CHN
CYP
CZE
DEU
DNK
ESP
EST
FIN
FRA
GBR
GRC
HRV
HUN
IDN
IND
IRL
ITA
JPN
KOR
LTU
LUX
LVA
MEX
MLT
NLD
NOR
POL
PRT
ROU
RUS
SVK
SVN
SWE
TUR
TWN
USA
1
2
3
4
5
100 1 000 10 000
GDP (billions of US dollars)
Impact on production costs (%)
Figure 3.11 Simulated impact of
container freight rate
surges on production costs,
by country and size of
economy
REVIEW OF MARITIME TRANSPORT 2021
70
As of July 2021, industrial production in the United States had recovered considerably from the decline
caused by the COVID-19 pandemic in 2020, but remained below the pre-pandemic level despite
strong consumer demand for goods. By early 2021, production in the United States had started to
recover. Nevertheless compared with February 2020, by July 2021, industrial production was 0.1 per
cent lower while real personal consumption expenditure on goods was 14.8 per cent higher.
14 15
These
trends are consistent with the simulation for industrial production, suggesting that the container freight
rate surge and the corresponding disruption in maritime transport are delaying a recovery in global
manufacturing.
E. STRUCTURAL DETERMINANTS OF MARITIME TRANSPORT COSTS
As well as responding to global market factors such as strong shipping demand, limited supply and
container shortages, maritime transport costs on specic routes are also determined by structural factors,
including port infrastructure, trade facilitation measures and liner shipping connectivity. Indeed, compared
with pandemic-induced uctuations these can have a greater impact on transport costs and trade
competitiveness in the long term. Improving these structural factors can mitigate future external shocks
such as freight rate surges and maritime transport disruptions.
To investigate the structural determinants of maritime transport costs, UNCTAD has collaborated with
the World Bank and Equitable Maritime Consulting to develop the Global Transport Costs Dataset for
International Trade (GTCDIT).
16
This is a unique and comprehensive dataset disaggregated by mode of
transport at commodity level (HS code 6-digit level). Transport costs are measured as differences between
cost, insurance, and freight (CIF) values, and free on board (FOB) values. As of September 2021, data
had been published for the year 2016. The dataset is currently being rened to improve data quality and
add subsequent years.
14
Based on data provided by the United States Board of Governors of the Federal Reserve System, Industrial Production
and Capacity Utilization (https://www.federalreserve.gov/releases/g17/current/, accessed 27 September 2021).
15
Based on data provided by the United States Bureau of Economic Analysis, Personal Income and Outlays
(https://www.bea.gov/data/income-saving/personal-income, accessed 27 September2021).
16
https://unctadstat.unctad.org/EN/TransportCost.html (accessed 24 June 2021).
Sources: UNCTAD calculations based on data provided by Clarksons Research, Shipping Intelligence Network
(accessed 3 June 2021), the World Bank, World Development Indicators (accessed 10 June 2021), Bank for International
Settlements, Effective exchange rate indices (accessed 10 June 2021), and Feldkircher et al., 2020 (accessed 10 June 2021).
Note: Global Vector Autoregression, consisting of 8 variables and 31 countries, is estimated using GVAR toolbox 2.0
(Smith and Galesi, 2014). Included endogenous variables for individual countries are the industrial production index, the
consumer price index, the equity price index, the real effective exchange rate index, nominal short-term interest rates, and
nominal long-term interest rates. Global variables are oil prices and container freight rates. See technical note 3 for the detail
of the methodology.
Industrial production (%)
Freight rate (%)
0 20 40 60
0
2.5
5
7.5
10
−1.0
−0.5
0
Lag (months)
China
Euro Area
US
Figure 3.12 Simulated dynamic impacts of container freight rate increase on industrial
production
3. Freight rates, maritime transport costs and their impact on prices
71
1. LDCs incur higher maritime transport costs
To capture overall trends in the GTCDIT, transport cost data have been aggregated for three importing
country groups – LDCs, LLDCs and the world as a whole (gure 3.13). In 2016 the highest all-mode
transport costs are for LLDCs at 11.6 per cent of FOB value, compared with 9.4 per cent for the world
as a whole, and 9.7 per cent for LDCs. This is not surprising since many LLDCs are hampered by their
geographical locations and depend on more expensive modes of transport such as air and road. For
example the heatmap in gure 3.14 indicates especially high transport costs for Mongolia, Zimbabwe,
Kyrgyzstan, the Republic of Moldova and Mali.
For maritime transport costs, gure 3.13 shows that the highest costs, at 7.6 per cent of FOB value,
are in LDCs compared with a world average of 5.6 per cent. For LDCs, reducing maritime transport
costs is a crucial development challenge as they rely on maritime shipping more frequently than others.
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Note: Transport costs of each transport mode are aggregated by group of importing countries. The aggregation is the sum
of transport costs over all commodities, importing countries in the respective importing country group, and trading partners,
divided by the corresponding sum of the trade value (in FOB), for commodities and country pairs for which both transport
costs and FOB values are available.
9.4
5.6
7.9
7.7
2.3
6.1
9.7
7.6
11.1
9.3
6.6
7.7
11.6
6.0
10.5
9.3
4.4
8.5
0
2
4
6
8
10
12
14
All transport modes Sea Air Road Rail Non-standard
World LDCs
LLDCs
% of FOB
Figure 3.13 Transport costs for importing goods by transport mode, world, LDCs,
and LLDCs, 2016, percentage of FOB value
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Note: Grey colour indicates countries where import transport costs data are not available.
Transport costs are aggregated by importing country. Importers’ maritime transport costs are summed up over all commodities
and trading partners and, divided by the corresponding sum of the trade value (in FOB), for commodities and country pairs
for which both maritime transport costs and FOB values are available.
Transport cost
(% of FOB value)
5 10 1520 25 30
Figure 3.14 Transport costs heatmap for importing goods, all modes of transport, 2016,
percentage of FOB value
REVIEW OF MARITIME TRANSPORT 2021
72
Maritime transport carried 56 per cent of the LDCs’ total imports compared with a world average
of 40 per cent.
17
2. Better port infrastructure and trade facilitation would reduce maritime
transport costs
The GTCDIT provides granular information on transport costs, which is useful to better understand the
underlying relationships between these shipping costs and their determinants. This shows, for example,
that, controlling for differences in product structure and local factors such as port infrastructure, the ad
valorem maritime transport costs increase with the distance between trading partners, reecting greater
costs for fuel and crews. This relationship is visible in the granular data disaggregated at the commodity
and bilateral country level (gure 3.15).
18
But it may not be evident in aggregated country level for average
distance from trading partners. This is because some long-distance routes, such as between the United
States and China, have larger volumes of trade that permit economies of scale, for example, by using
larger vessels. Trade routes with longer distances and lower transport costs tend to have higher weights
in the aggregation process.
In ad valorem terms, maritime transport costs tend to be higher for smaller economies (gure 3.16).
This may be due to the lack of liner shipping connectivity, the lower quality of port infrastructure, and
inadequate trade facilitation measures. These countries would benet from upgrading their ports to enable
better shipping services, and permit larger vessels with shorter waiting times before entering ports. They
17
The world average of the maritime transport share in terms of FOB value (i.e., 40.2 per cent) is lower than the maritime
transport share in terms of volume (i.e., 85.9 per cent in 2016 according to Clarksons Research, Shipping Intelligence
Network) indicating that goods transported by air and over land have on average a higher price than goods transported
by sea.
18
In the granular data, the elasticity of the maritime transport costs in ad valorem terms with respect to the distance is
estimated at 0.059 after controlling commodity and trading partner xed effects (and 0.028 without the xed effects), and
it is statistically different from zero at a signicance level of 1 per cent. In contrast, in the country level data, the estimated
elasticity is -0.091 and it is not statistically different from zero at a signicance level of 10 per cent.
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Notes: Left-hand side: The granular data is the bilateral trade data at the HS code 6-digit level. Distances from trading
partners are divided into ten quantile groups. The y-axis shows the percentage deviation of maritime transport costs from
their conditional average based on commodities and trading partners (obtained as residuals from a regression of maritime
transport costs (as percentage of the FOB value) on commodity dummies and trading partner dummies). The boxplot shows
the 25
th
percentile (lower line), median (middle line), and the 75
th
percentile (upper line) of maritime transport costs in each
quantile group.
Right-hand side: Importers’ maritime transport costs are summed up over all commodities and trading partners and, divided
by the corresponding sum of the trade value (in FOB), for commodities and country pairs for which both maritime transport
costs and FOB values are available.
Figure 3.15 Maritime transport costs for importing goods and distances from trading
partners
-30
-20
-10
0
10
20
300 1 000 3 000 10 000 30 000
Distance from trading partners (km)
Maritime transport costs (% of FOB) in 2016
(% deviation from conditional average)
Based on the granular data
ALB
AGO
BRN
BGR
KHM
CMR
DEU
HUN
IRL
LAO
MDG
MLI
MNE
PAN
SVK
SVN
SWE
CHE
USA
3
5
10
3 000 5 000 10 000
Average distance from trading partners (km)
Maritime transport costs (% of FOB) in 2016
Based on the country-level data
3. Freight rates, maritime transport costs and their impact on prices
73
would also benet from introducing paperless systems for trade facilitation, as well as from more direct
liner shipping connections to reduce the need for transhipping containers.
The consequence of improving these determinants – from their 25
th
percentiles to 75
th
percentiles – is
illustrated in gure 3.17. Improving the quality of port infrastructure would reduce world average maritime
transport costs by 4.1 per cent, better trade facilitation measures by 3.7 per cent, and better liner shipping
connections by 4.4 per cent (technical note 4). In LDCs, the greatest benets would come from better trade
facilitation, with a decrease of 8.6 per cent compared with 0.7 per cent from better port infrastructure.
19
It should be noted that these impacts are measured at border-to-border prices. As these transport costs
determinants (quality of port infrastructure, trade facilitation measures, and liner shipping connection)
would also reduce border-to-door transport costs, changes in total transport costs (door-to-door transport
costs) can be expected to be higher than the changes in the border-to-border transport costs.
3. Trade imbalances produce asymmetric maritime transport costs,
alleviated by economies of scale
Maritime transport costs are also affected by bilateral trade imbalances – especially for containerized
trade. For sailings from high-demand to low-demand countries many vessels have to return with empty
containers making shipping costs higher to cover part of the ballast sailing costs for the return journey.
This imbalance effect is conrmed in the data provided by TIM Consult (see section A.3). It is also evident
in the GTCDIT dataset. Trade routes with trade imbalances on average have maritime transport costs
2.4 per cent higher for one direction than the other (gure 3.18). The greater the imbalance the greater
19
Among trade facilitation measures, cross paperless trade and trade facilitation institution are estimated to have higher
impacts in LDCs. Improving cross paperless trade and trade facilitation institution from the 25
th
percentile to 75
th
percentile
is associated with a reduction in maritime transport costs by 8.8 per cent and 7.6 per cent, respectively.
Sources: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021), World Development Indicators published by the World Bank (accessed 24 June 2021),
Global Competitiveness Index published by the World Economic Forum (accessed 24 June 2021), UN Global Survey on
Digital and Sustainable Trade Facilitation conducted by the UN Regional Commissions (accessed 24 June 2021), and a
dataset provided by MDS Transmodal.
Notes: Figure 3.16: Maritime transport costs are aggregated by importing country. The aggregation is the sum of transport
costs over all commodities and trading partners, divided by the sum of trade values (in FOB) over the corresponding
commodities and trading partners, for commodities and country pairs where transport costs data are available.
Figure 3.17: The impact on maritime transport costs is the impact of improving each transport costs determinant from
the 25
th
percentile to the 75
th
percentile. See technical note 4 for the detail of the methodology and the data sources.
AUS
BGR
CAF
CHN
HUN
IRL
MLI
MNE
PAN
SVN
SWE
CHE
USA
GBR
3
5
10
10 100 1 000 10 000
Current GDP (billions of USD) in 2016
Maritime transport costs (% of FOB) in 2016
Figure 3.16 Maritime transport costs for
importing goods, by country
and size of economy
-4.1
-3.7
-4.4
-0.7
-8.6
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
Quality
of port
infrastructure
Trade
facilitation
measures
Direct liner
shipping
connections
World
LDCs
Impacts on maritime transport costs (%)
Figure 3.17 Impact of structural
determinants on maritime
transport costs for importing
goods
REVIEW OF MARITIME TRANSPORT 2021
74
the increase. Thus, if the imbalance increases by 10 per cent, maritime transport costs are expected to
increase by 0.3 per cent (gure 3.19, technical note 5).
20
The trade imbalance effect on maritime transport costs can be alleviated by other factors. For example,
boosting cargo volumes to generate economies of scale could help cut maritime transport costs. The role
of economies of scale effect in mitigating high transport costs is also conrmed when looking at the new
transport costs dataset. An analysis based on this dataset shows that a 10 per cent increase in the trade
volume is associated with a 2.6 per cent decrease in maritime transport costs (gure 3.19).
F. SUMMARY AND POLICY CONSIDERATIONS
Since late-2000 and into 2021, freight rates across containerized and dry bulk shipping markets have hit
record highs, while tanker rates have plummeted. The surge in container rates in the second half of 2020
reected higher-than-expected demand. As demand continued to surge, even an expansion of capacity
was insufcient to constrain prices, because other supply-side factors came into play, including a global
shortage of shipping containers, port congestion, delays, unreliable liner schedules, and increased fees
and surcharges. Freight rates are expected to remain high – fuelled by continued strong demand against
a background of growing supply uncertainty and concerns about the efciency of transport systems and
port operations.
The upward trajectory in freight rates has also raised questions about market behaviour and transparency
in freight pricing – and about whether that situation has been exacerbated by greater market concentration.
The current surge in freight rates – if sustained – could have global economic impacts. The UNCTAD
simulation suggests that it could increase global import price levels by 10.6 per cent, and consumer price
levels by 1.5 per cent. The impact will be even greater in SIDS which could see import prices increase
by 24 per cent and consumer prices by 7.5 per cent. In LDCs consumer price levels could increase by
2.2 per cent.
20
In the quantitative analysis, the trade imbalance is dened as a ratio of the shipping value in one direction over the
shipping value in the opposite direction.
Source: UNCTAD calculations based on the GTCDIT developed by UNCTAD, the World Bank, and Equitable Maritime
Consulting (accessed 24 June 2021).
Notes: Figure 3.18: The gure shows the median of maritime transport costs in the sample of positive trade imbalances and
the sample of negative trade imbalances. Maritime transport costs are percentage deviations from conditional averages based
on commodities and bilateral country pairs (i.e., residuals from the regression of maritime transport costs (per unit of goods)
on commodity dummies and bilateral country pair dummies). Differences in measurement unit of goods volume are controlled
by the commodities dummies.
Figure 3.19: The gure shows the estimated elasticities (multiplied by 10) of maritime transport costs with respect to the trade
(im)balance and the trade volume. See technical note 5 for the detail of the methodology and the data source.
-1.0
1.4
-1.5
-1
-0.5
0
0.5
1
1.5
2
Negative
trade imbalance
Positive
trade imbalance
Maritime transport costs per unit of goods
(% deviation from conditional averages)
Figure 3.18 Maritime transport costs
by direction of the trade
imbalance
0.3
-2.6
-3
-2.5
-2
-1.5
-1
-0.5
0
0.5
10% increase
in trade imbalance
10% increase
in trade volume
Maritime transport costs per unit of goods
(% change)
Figure 3.19 Impacts of trade imbalance
and trade volume on
maritime transport costs
3. Freight rates, maritime transport costs and their impact on prices
75
Higher price increases are expected in important products. Globally, prices of computers are simulated
to increase on average by 11 per cent, followed by 10 per cent increases in furniture and textiles, and a
7.5 per cent increase in pharmaceutical products. Some of these are low-value-added items produced in
smaller economies which could face erosion of their comparative advantages.
Higher freight levels are also threatening to undermine a recovery in global manufacturing. In the short to
medium term, a 10 per cent increase in container freight rates could lead to a cumulative contraction of
around 1 per cent in industrial production in the United States and the euro area.
Over the longer term, maritime transport costs are also inuenced by structural factors including port
infrastructure quality, the trade facilitation environment, and shipping connectivity. There is potential for
signicant improvements that could reduce maritime transport costs by around 4 per cent.
If global trade is to ow more smoothly in future, and ports and maritime transport are to thrive and
navigate through the historic disruption caused by the pandemic, this will require actions in some key
policy areas, to:
• Monitor markets – To ensure a fair transparent and competitive commercial environment,
governments will need to monitor freight rates, as well as fees and charges applied by carriers
and port terminals. Policy makers should strengthen maritime transport competition authorities so
that they can better understand market development and provide the requisite regulatory oversight
(UNCTAD, 2021).
• Share information and strengthen collaboration – To enhance transport efciency and operations
there should be greater collaboration and sharing of data between various stakeholders along the
maritime supply chain, including carriers, ports, inland transport providers, customs and shippers.
• Analyse trends – Relevant organizations, including UNCTAD, should continue to monitor trends in
shipping markets, collect data and deepen their analysis of the structural determinants of transport
costs. They can consider ways of cutting costs, enhancing efciency and smoothing delivery of
international maritime trade.
• Upgrade ports – To address congestion and ensure efcient and sustainable trade, port operations
should be upgraded by improving infrastructure, and investing in new technology and digital
solutions. Similar efforts should extend to trade facilitation to improve hinterland connectivity,
particular for LDCs, SIDS and LLDCs.
• Move up the value chain – If smaller economies are to be more resilient to external shocks, including
freight rate surges and maritime transport disruptions, they should be able to diversify by graduating
to higher-value-added products.
REVIEW OF MARITIME TRANSPORT 2021
76
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78
TECHNICAL NOTES
Technical note 1: Simulation of import/consumer price impacts (section D.1)
The analysis in section D.1 simulated the impacts of the current container freight rate surge on import and
consumer price levels at the world level and for three country groupings, i.e., LDCs, LLDCs, and SIDS. The
simulated price impacts are dened as percentage differences in import/consumer price levels in 2023
between the following two scenarios:
1. Container freight rate surge scenario: The level of the CCFI Composite Index in August 2021
(i.e., 3,027.91 points) is assumed to be sustained over the remaining simulation period (i.e., from
September 2021 to December 2023).
2. No container freight rate surge scenario: The CCFI Composite Index is assumed to stay at the
level observed before the freight rate surge (i.e., 884.02 points in August 2020) over the remaining
simulation period (i.e., from September 2020 to December 2023).
Estimation of the elasticities
The regression in the present analysis extended the exchange rate pass-through equation in Goldberg
and Campa, 2010 and Sekine, 2006, to add container freight rates as an explanatory variable and expand
the country coverage to include small countries such as LDCs, LLDCs and SIDS. Given that only annual
data are available for most of the small countries, the number of observations is signicantly reduced for
each country. To overcome the small sample size problem, the estimation is conducted at the world level
and the country group level instead of at the individual country level, applying a panel data estimation.
The rst difference of logarithm of import prices is regressed on country dummies and the rst differences
of logarithms of container freight rates, nominal effective exchange rates, foreign prices, GDP, commodity
prices, and lagged variables:
L L
∆ln IPI
t
c
= α
c
+
∑
(β
1,l
∆ln CCFI
t
c
-l
+ β
2,l
∆ln e
t
c
-l
+ β
3,l
∆ln w
t
c
-l
+ β
4,l
∆ln GDP
t
c
-l
+ β
5,l
∆ln Com
t
c
-l
) +
∑
β
6,l
∆ln IPI
t
c
-l
l=0
l=1
where IPI
t
c
is local currency import price index of country c in year t, α
c
is country xed effects (i.e., dummy
variables for country
c), CCFI
t
c
-l
is container freight rates of country c (i.e., freight rates of the closest trade
lane for country
c, to be discussed below) in year t-l, e
t
c
-l
is the inverse of the nominal effective exchange
rate of country
c, w
t
c
-l
is foreign prices (i.e., a weighted average of consumer prices of trading partners) of
country
c, GDP
t
c
-l
is the real GDP of country c, and Com
t
c
-l
is global commodity prices in terms of country c’s
local currency unit. For the construction of
CCFI
t
c
-l
, each country is matched with the closest trade lane from
the 12 trade lanes covered in the CCFI. For example, a country in Sub-Saharan Africa region is matched
with the CCFI China-South Africa Freight Index. For
e
t
c
-l
, the inverse of the nominal effective exchange rate
is used in the equation, so that an increase in this variable represents a currency depreciation.
With regard to the impact on consumer prices, the rst difference of logarithm of consumer prices is
regressed on country dummies and the rst differences of logarithms of import prices, GDP, and lagged
variables.
L L
∆ln CPI
t
c
= α
c
+
∑
(γ
1,l
∆ln IPI
t
c
-l
+ γ
2,l
∆ln GDP
t
c
-l
) +
∑
γ
3,l
∆ln CPI
t
c
-l
l=0
l=1
where CPI
t
c
is consumer price index of country c in year t.
The above equations are estimated by OLS based on annual panel data. The import price equation
covers 200 economies from 2003 to 2019, and the consumer price equation covers 198 economies
from 1981 to 2019. As the coefcients (
βs and γs) are common to all economies, estimated elasticities
can be interpreted as the world average (simple average). For the estimation at the country group level
(i.e., LDCs, LLDCs, and SIDS), the estimation samples are restricted to the respective country groups. For
the import price equation, the sample sizes are 44 economies for LDCs (out of 46 LDCs), 31 economies
for LLDCs (out of 32 LLDCs), and 42 economies for SIDS (out of 58 SIDS). For the consumer price
equation, the sample sizes are 43 economies for LDCs, 31 economies for LLDCs, and 42 economies
for SIDS. Insignicant explanatory variables are dropped from the equations, and consequently the lag
lengths became 1 year for most cases.
3. Freight rates, maritime transport costs and their impact on prices
79
Simulation of the impacts
To simulate the impacts of the current container freight rate surge on import prices, the estimated
elasticities of import prices with respect to container freight rates is multiplied by the difference in freight
rate between the container freight rate surge scenario and the no container freight rate surge scenario:
3
β
1,0
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)
(
∑β
l
6,1
+ β
6,2
+ 2β
6,1
β
6,2
+ β
6,3
)
2020 2020
l=0
+
[
β
1,0
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)
2021 2021
2
+ β
1,1
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)]
(
∑β
l
6,1
+ β
6,2
)
2020 2020
l=0
+
[
β
1,0
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)
+ β
1,1
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)
2022 2022 2021 2021
+ β
1,2
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)]
(1 + β
6,1
)
2020 2020
+
[
β
1,1
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)
+ β
1,2
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)
2022 2022 2021 2021
+ β
1,3
(
∆ln CCFI
Composite
- ∆ln CCFI
Composite*
)]
2020 2020
where CCFI
t
Composite
is CCFI Composite Index in year t under the container freight rate surge scenario,
and
CCFI
t
Composite*
is CCFI Composite Index in year t under the no container freight rate surge scenario.
Actual simulation equations are simpler because insignicant variables are dropped from the estimation
equations. In the simulation, the CCFI Composite Index (instead of individual freight indices used in the
estimation) is used for container freight rates to simplify the calculations.
A corresponding equation for the consumer price simulation can be obtained by replacing
CCFI
t
Composite
,
CCFI
t
Composite*
,β
1,l
, β
6,l
with IPI
t
, IPI
t
*
,γ
1,l
, γ
3,l
, respectively, where IPI
t
is import price index at the world level
(or LDC, LLDC, or SIDS) in year
t under the container freight rate surge scenario, and IPI
t
*
is import price
index under the no container freight rate surge scenario.
IPI
t
and IPI
t
*
are calculated during the process of
applying the above equation for the import price simulation.
Data
Import prices, consumer prices, real GDP, container freight rates,
and commodity prices
Unit value indices of imports are reported in the UNCTADstat database (https://unctadstat.unctad.org/
wds/TableViewer/tableView.aspx?ReportId=184185, accessed 2 June 2021). Given that the reported unit
value indices are denominated in US dollars, they are converted to local currency units using market
exchange rates. Data on market exchange rates are retrieved from the IMF, International Financial Statistics
(https://data.imf.org/?sk=4c514d48-b6ba-49ed-8ab9-52b0c1a0179b, accessed 1 June 2021) and
UNCTADstat (https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=117, accessed
1 June 2021). For the 19 Euro area countries, the unit value indices of imports are converted to the former
local currency units (before the Euro) because the dataset for the present analysis starts from 2003, which
is before the adoptions of the Euro in some countries (i.e., Slovenia adopted the Euro in 2007, followed
by Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015).
Consumer price indices (CPI) and real GDP are retrieved from UNCTADstat (https://unctadstat.unctad.
org/wds/TableViewer/tableView.aspx?ReportId=37469 for CPI and https://unctadstat.unctad.org/wds/
TableViewer/tableView.aspx?ReportId=96 for real GDP, accessed 2 June 2021). CCFI composite index
and the individual freight indices for 12 trade lanes are sourced from Clarksons Research, Shipping
Intelligence Network (accessed 2 September 2021).
Commodity prices for energy, non-energy and precious metals are reported in the World Bank, Commodity
Price Data (The Pink Sheet, https://www.worldbank.org/en/research/commodity-markets, accessed
23 August 2021). A simple average of the three indices are converted to local currency units using market
exchange rates above.
REVIEW OF MARITIME TRANSPORT 2021
80
Nominal effective exchange rates and foreign prices
The nominal effective exchange rate indices and the foreign price indices are normalized to 100 in the rst
year (i.e., 2003 for the most countries but a later year for some countries), and extended to subsequent
years using the following chained formulas based on a geometric weighted average of bilateral exchange
rates/trading partners’ consumer price indices with trade values (i.e., bilateral total trade values for nominal
effective exchange rates and bilateral import values for foreign prices) as weights:
E
t
c
W
c,p
NEER
t
c
/
=
∏
(
E
t
p
/
)
t
,
w
t
c
/
=
∏
(
CPI
t
p
/
)
W
c,p
NEER
t
c
-1
E
t
c
-1
w
t
c
-1
CPI
t
p
-1
t
p≠c
E
t
p
-1
p≠c
where NEER
t
c
is the nominal effective exchange rate index of country c in year t, E
t
c
is the market exchange
rate of country
c’s currency in US dollars, E
t
p
is the market exchange rate of trading partner p’s currency
in US dollars, and
W
t
c,p
is the total bilateral trade value (i.e., the sum of the bilateral export value and the
bilateral import value) between country
c and trading partner p. For the right-hand side equation, w
t
c
is the
foreign price index of country
c in year t, CPI
t
p
is the consumer price index of trading partner p, and
W
t
c,p
is the
bilateral import value of country
c from trading partner p.
An increase in the nominal effective exchange rate index represents an appreciation of the country
c’s
currency. In the estimation, the inverse of the nominal effective exchange rate index is used, so that an
increase in this variable represents a currency depreciation.
The total bilateral trade value (i.e.,
W
t
c,p
) and the bilateral import value (i.e.,
W
t
c,p
) are the average of the
data reported by country
c and trading partner p. If only either country c’s or trading partner p’s data is
available, only the available data is used. If both data are not available, the missing value is imputed by the
average of the previous and next year’s values. Data on bilateral trade values and bilateral import values
are retrieved from the IMF, Direction of Trade Statistics (https://data.imf.org/?sk=9D6028D4-F14A-464C-
A2F2-59B2CD424B85, accessed 1 June 2021) and the World Bank, World Integrated Trade Solution
(https://wits.worldbank.org/, accessed 2 June 2021). The data on market exchange rates (i.e.,
E
t
c
and E
t
p
)
is the same data used in the calculation of import prices in local currency units (i.e., sourced from the
International Monetary Fund, International Financial Statistics and UNCTADstat). Also, the data on trading
partners’ consumer price indices (i.e.,
CPI
t
p
) is the same data used as the dependent variable in the
consumer price equation (i.e., sourced from UNCTADstat).
3. Freight rates, maritime transport costs and their impact on prices
81
Technical note 2: Simulation of price and production cost impacts
(section D.2 and D.3)
The analyses in section D.2 and D.3 simulated the impacts of the current container freight rate surge on
prices for importers, consumers and rms at the country level. The simulated impacts are “long-term”
impacts, i.e., the simulation assumes that the current container freight rate surge and the corresponding
increases in production costs are fully passed to nal users (i.e., consumers and rms), although other
production costs components such as wages and salaries are assumed not to change. The simulated
impacts are dened as percentage differences in price/production cost levels between the following two
scenarios:
1. Container freight rate surge scenario: The level of the CCFI in August 2021 (i.e., 3,027.91 points)
is assumed to be sustained in the long-term (i.e., until increases in production costs are fully passed
to nal users).
2. No container freight rate surge scenario: The CCFI is assumed to stay at the level observed
before the freight rate surge (i.e., 884.02 points in August 2020) in the long-term.
Estimation of the elasticities
In the rst step, elasticities of production costs at the country and product level are estimated by the price
model of the input-output table (see Tamamura, 2014; and Miller and Blair, 2009):
η = Δ (B
t
[b + ʋ + d]) = B
t
Δb
where η is a column vector whose element η
i
c
represents an elasticity of the production cost of product i
in country
c with respect to freight rates, B
t
= {[I-A]
-1
}
t
is the Leontief inverse matrix, I is an identity matrix
(i.e., a square matrix with ones on the diagonal and zeros elsewhere),
A = (a
p,c
) is the technical coefcient
matrix and its element
a
p,c
= Z
p,c
/ X
i
c
represents the share of the input of product j produced in country p
into the production of product
i in country c (i.e., Z
p,c
) in the total input for the production of
product
i in country c (i.e., X
i
c
), b is a column vector whose element b
i
c
= IntTTM
i
c
/X
i
c
represents the ratio of
the international transport margins involved in the production of product
i in country c (i.e., IntTTM
i
c
)
over the total input for the production of product
i in country c (i.e., X
i
c
), ʋ is a column vector whose
element
ʋ
i
c
= VA
i
c
/ X
i
c
represents the ratio of the value added (i.e., labour costs and capital costs) involved
in the production of product i in country
c (i.e., VA
i
c
) over the total input for the production of product i in
country
c (i.e., X
i
c
), and d is a column vector whose element d
i
c
= τ
i
c
/ X
i
c
represents the ratio of the indirect
taxes less subsidies (i.e., import tariffs) involved in the production of product
i in country c (i.e., τ
i
c
) over the
total input for the production of product
i in country c (i.e., X
i
c
).
The difference operator
Δ represents element by element difference of a matrix/vector induced by a one
per cent increase in container freight rates. Among the four matrices/vectors in the equation, i.e.,
B
t
, b, ʋ,
and
d, only the shares of the international transport margins (i.e., b) are assumed to change. The share of
transport margins involved in the production of product
i in country c (i.e., b
i
c
) is assumed to increase by
one per cent if all imported products used in the production of product
i in country c (i.e., Z
p,c
for all j,p)
are fully containerized. If some imports are partially containerized, the transport margins of these products
are assumed to increase by the containerized ratio divided by 100. Therefore, the change in the share of
the international transport margins is calculated by the following formula:
p,c p,c
p,c
∆b
i
c
=
∑
j,p
[
Z
j,i
× R_IntTTM
j
×
CR
j
]
100
where b
i
c
= ∑
j,p
[Z
p,c
× R_IntTTM
j
p,c
] is the share of international transport margins involved in the production
of product
i in country c, R_IntTTM
j
p,c
is the ratio of the international transport margins of product j’s import
from country
p to country c over the import value of product j from country p to country c, and CR
j
p,c
is the
containerized ratio of product
j’s import from country p to country c. The containerized ratio is calculated
by the following formula:
CR
j
p,c
=
∑
h
ϵj
MIMP
h
p,c
1
containerized
(h)
/
∑
hϵj
IMP
h
p,c
where MIMP
h
p,c
is the maritime import value of commodity h (in product group j) from country p to
country
c, IMP
h
p,c
is the total import value of commodity h (in product group j) from country p to country c,
j,i
j,i
j,i
j,i
j,i
j,i
REVIEW OF MARITIME TRANSPORT 2021
82
and 1
containeriezed
is an indicator function which equals to one if commodity h is containerized and zero
otherwise. The commodity
h is considered as containerized according to the denitions used in the OECD
Maritime Transport Cost database (see Appendix Table II.3. in Korinek, 2011).
In the second step, the elasticity of the nal user prices (i.e., prices for consumers and rms) at the country
and product level are estimated by summing the elasticity of the production costs
η
i
p
(estimated above)
and the increase in the international transport margins for importing the product:
ζ
i
p,c
= η
i
p
+ ∆R_IntTTM
i
p,c
= η
i
p
+ R_IntTTM
i
p,c
×
CR
i
p,c
100
where ζ
i
p,c
is the elasticity of the nal user price of product i imported from country p to country c, η
i
p
is the elasticity of production cost of product
i in country p, and ∆R_IntTTM
i
p,c
is the change in the
international transport margin ratio of product
i’s import from country p to country c induced by a one per
cent increase in container freight rates. If product
i is fully containerized, the international transport margin
ratio is assumed to increase by 1 per cent. Otherwise, the international transport margin ratio is assumed
to increase by the containerized ratio divided by 100 (i.e.,
CR
i
p,c
/100).
In the nal step, the elasticity of the nal user price and the elasticity of the production cost at the country
and product level are aggregated to the country or product level using the nal demand amounts or output
values as weights:
ζ
c
=
∑
i,p
ζ
i
p,c
f
i
p,c
, ζ
i
=
∑
c,p
ζ
i
p,c
f
i
p,c
, ζ
global
=
∑
i,c,p
ζ
i
p,c
f
i
p,c
, η
c
=
∑
i
η
i
c
X
i
c
where ζ
c
is the aggregated elasticity of nal user prices in country c, ζ
i
is the global elasticity of the nal
user price of product
i, ζ
global
is the global level elasticity of nal user prices, η
c
is the aggregated elasticity
of production costs in country
c, f
i
p,c
is the nal demand of country c for product i produced in country p,
and
X
i
c
is output of product i in country c. If the nal demand vector f
c
= (f
i
p,c
) is the consumption of
country c, the elasticity of nal user prices (i.e.,
ζ
c
) becomes the elasticity of consumer prices. The elasticities
of import prices, investment-related product prices, and intermediate product prices are calculated by
replacing the nal demand vector by the respective demand vector.
Simulation
The impacts of the current container freight rate surge on prices and production costs at the country or
product level are calculated by multiplying the aggregated elasticities by the changes in the CCFI level
between the two scenarios:
ζ
c
×
(
CCFI
Composite
× Adj - 1
)
:
= ζ
c
×
(
CCFI
Composite
× Adj - 1
)
CCFI
Composite*
CCFI
Composite
where CCFI
Composite
is the level of the CCFI Composite Index in the “long-term” under the container freight
rate surge scenario (i.e., 3027.91 points in August 2021),
CCFI
Composite*
is the level of the CCFI Composite
Index in the “long-term” under the no container freight rate surge scenario (i.e., 884.02 points in
August 2020), and
Adj is an adjustment factor to convert changes in the CCFI to changes in international
transport margin.
Adj is calibrated by aligning changes in total international transport margin implied
by the current simulation with changes calculated from a regression analysis at macroeconomic level
(i.e., total international transport margin is regressed on the CCFI, and the estimation result is used for the
extrapolation). The aggregated elasticity of nal user prices at the country level (i.e.,
ζ
c
) is replaced by the
elasticity at the product level (i.e.,
ζ
i
), at the global level (i.e., ζ
global
), or the elasticity of production costs
at the country level (i.e.,
η
c
) when impacts on product level nal prices, global level nal prices or country
level production costs are calculated.
Data
The estimation of the elasticities of prices and production costs at the country or product level is mainly
based on the World Input-Output Database (WIOD, http://www.wiod.org/home, accessed 7-8 June 2021)
developed by Timmer et al., 2015. The WIOD covers 43 countries (i.e., 28 EU countries and 15 other
major countries) and 56 sectors. The calculation of the containerized ratio is based on the bilateral trade
data by transport mode (the GTCDIT) retrieved from the UNCTADstat (https://unctadstat.unctad.org/
EN/TransportCost.html, accessed 24 June 2021). The data on CCFI Composite Index is sourced from
Clarksons Research, Shipping Intelligence Network (accessed 2 September 2021).
long
August 2021
long
August 2020
long
long
3. Freight rates, maritime transport costs and their impact on prices
83
Technical note 3: Simulation of dynamic impacts on industrial production
(section D.4)
The analysis in section D.4 simulated the dynamic impacts of container freight rate increases on the
industrial production in major economies. The simulated impacts are dened as cumulative changes in the
level of the industrial production induced by an increase in container freight rates.
Estimation
The regression is based on the global vector autoregression (GVAR) model developed by Pesaran
et al., 2004. The GVAR consists of a set of vector autoregression (VAR) models at the individual country
level:
p
i
q
i
q
i
x
i,t
= a
i,0
+ a
i,1
t +
∑
Φ
i,l
x
i,t-l
+ Λ
i,0
x
*
i,t
+
∑
Λ
i,l
x
*
i,t-l
+ Ψ
i,0
ω
t
+
∑
Ψ
i,l
ω
t-l
+ u
i,t
l=1 l=1 l=1
p
ω
q
ω
ω
t
= μ
0
+ μ
1
t +
∑
Φ
ω,l
ω
t-l
+
∑
Λ
ω,l
x
*
ω,t-l
+ η
t
l=1 l=1
N N
x
*
i,t
=
∑
w
i,j
x
j,t
, x
*
ω,t
=
∑
w
ω,j
x
j,t
j≠i j=0
where x
i,t
= (y
i,t
, π
i,t
, eq
i,t
, er
i,t
, sr
i,t
, lr
i,t
)
t
are the country-specic endogenous variables of country i in
time
t, x
*
i,t
= (y
i,t
*
, π
i,t
*
, eq
i,t
*
, er
i,t
*
, sr
i,t
*
, lr
i,t
*
)
t
are the foreign variables (i.e., weighted average of foreign
countries’ endogenous variables) for country
i, ω
t
= (p
t
oil
, p
t
freight
)
t
are the global variables common for
all countries,
w
i,j
is the weight on country j’s endogenous variables for constructing country i’s foreign
variables such that
∑
N
j≠i
w
i,j
= 1, w
ω,j
is the weight on country j’s endogenous variables for constructing
feedback variables for the global variables such that
∑
N
j=0
w
ω,j
= 1, and u
i,t
are cross sectionally weekly
correlated error terms.
y
i,t
is the industrial production, π
i,t
is the consumer ination, eq
i,t
is the real equity
price,
er
i,t
is the real effective exchange rate, sr
i,t
is the nominal short-term interest rate, lr
i,t
is the nominal
long-term interest rate,
p
t
oil
is the oil price, and p
t
freight
is the freight rate. All variables are in levels and, with
the exception of the interest rates, in logarithmic transform. Data on industrial production and consumer
prices are seasonally adjusted.
In the country
i’s VAR model, a
i,0
is the intercept term, a
i,1
is the coefcient on the time trend term, Φ
i,l
is
the matrix of coefcients on the lagged endogenous variables,
Λ
i,0
is the matrix of coefcients on the
contemporaneous foreign variables,
Λ
i,l
is the matrix of coefcients on the lagged foreign variables, Ψ
i,0
is the matrix of coefcients on the contemporaneous global variables, and
Ψ
i,l
is the matrix of coefcients
on the lagged global variables. In the VAR model for the global variables (i.e., the dominant unit model
with the feedback effects),
μ
0
is the intercept term, μ
1
is the coefcient on the time trend, Φ
ω,l
is the
matrix of coefcients on the lagged global variables, and
Λ
ω,l
is the matrix of coefcients on the lagged
feedback variables. The lag orders in the individual countries’ VAR models and the dominant unit model
(i.e.,
p
i
, q
i
, p
ω
, and q
ω
) are determined by the Akaike Information Criterion (AIC). The individual countries’ VAR
models and the dominant unit model are estimated using the GVAR toolbox 2.0 (Smith and Galesi, 2014).
Simulation
An impulse response analysis is conducted to simulate the impact of freight rate increases on the industrial
production. The impact of the one standard deviation shock in freight rates is calculated by the generalized
impulse response functions using the GVAR toolbox 2.0 (Smith and Galesi, 2014).
Data
The present analysis covers 31 major economies in the world (i.e., 24 countries in the EU-27 and
7 other major countries). The primary data source for the six endogenous variables (i.e., industrial
production, consumer ination, real equity prices, real effective exchange rate, nominal short-term
interest rate, and nominal long-term exchange rate) is a dataset constructed by Feldkircher et al., 2020
(accessed 10 June 2021).
The other data sources used in the analysis are as follows: For the real effective exchange rates, the
monthly real effective exchange rate indices (broad indices) calculated by the Bank for International
REVIEW OF MARITIME TRANSPORT 2021
84
Settlements (https://www.bis.org/statistics/eer.htm, accessed 10 June) are used in the present analysis.
For Container freight rates, the Containership Timecharter Rate Index is sourced from Clarksons
Research, Shipping Intelligence Network (accessed 3 June 2021). For regional aggregation of the country
level results and the construction of the feedback variables for global variables, current GDP based on
purchasing power parity (PPP) is used as weights. The GDP data is sourced from the World Bank,
World Development Indicators database (https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD,
accessed 10 June).
3. Freight rates, maritime transport costs and their impact on prices
85
Technical note 4: Simulation of impacts of improving structural determinants
on maritime transport costs (section E.2)
The analysis in section E.2 simulated the impacts of improving the structural determinants of maritime
transport costs (i.e., the quality of port infrastructure, trade facilitation measures, and direct liner shipping
connections) on maritime transport costs in ad valorem terms.
Estimation of the elasticities
The elasticities of maritime transport costs with respect to the structural determinants are estimated by
the following panel regression:
ln
Cost
i
c,p
= α
i
+ α
p
+ βx
c
+ γ
log(Dist
c,p
)
where Cost
i
c,p
is the maritime transport costs (per cent of FOB value) for importing commodity i (at the
HS code 6-digit level) from country
p to country c, α
i
is the commodity xed effects, α
p
is the partner
country (i.e., exporting country) xed effects,
x
c
is a transport costs determinant of country c, and Dist
c,p
is the distance between country
c and p. The country c’s xed effects are not included in the regression
because they will cause the multicollinearity problem if they are included together with the transport
costs determinants of country
c. Only one transport costs determinant (i.e., either the quality of port
infrastructure, trade facilitation measures, or the direct liner shipping connectivity) is included in the above
equation at the same time to avoid the multicollinearity problem. The regression is run for each of the
transport costs determinants to estimate the respective elasticity
β.
When estimating the elasticities for the LDCs subsample, the equation is augmented to include an
interaction term between the transport costs determinants and the dummy variable for the LDCs:
ln
Cost
i
c,p
= α
i
+ α
p
+ βx
c
+ δ(x
c
× Dum
c
LDC
) + γ
log(Dist
c,p
)
where Dum
c
LDC
is the dummy variable for LDCs and equals to one if country c is a LDC and zero otherwise.
The elasticity of the maritime transport costs with respect to the transport costs determinants for LDCs is
given by the sum of
β and δ.
Simulation
To simulate the impacts of improving the structural determinants on maritime transport costs, the
estimated elasticities are multiplied by the difference between the 25
th
percentile and the 75
th
percentile
of the structural determinant:
β × (x
75th
- x
25th
), where x
zth
is the zth (i.e., 75
th
or 25
th
) percentile of one of
the transport costs determinants (i.e., the quality of port infrastructure, trade facilitation measures, or the
direct liner shipping connectivity). In the simulation for the LDCs subsample, the formula is modied as
follows: (β + δ) × (x
75th
- x
25th
).
Data
The maritime transport costs in 2016 at the commodity and bilateral country level are based on the
Global Transport Costs Dataset for International Trade (GTCDIT, https://unctadstat.unctad.org/EN/
TransportCost.html, accessed 24 June) developed by UNCTAD, the World Bank, and Equitable
Maritime Consulting. The maritime transport costs in ad valorem terms are calculated by the following
formula:
(CIF
i
c,p
- FOB
i
c,p
) / FOB
i
c,p
, where CIF
i
c,p
is the CIF value of commodity i’s imports from country p
to country
c, and FOB
i
c,p
is the corresponding FOB value. The distance between the exporting country
(i.e., country
p) and the importing country (i.e., country c) is also recorded in GTCDIT.
The quality of port infrastructure is assessed in the Global Competitiveness Report published by the World
Economic Forum. The score ranges from 1 (i.e., extremely underdeveloped) to 7 (i.e., well developed and
efcient by international standards). The data for 2015-2016 are retrieved from the World Bank, TCdata360
(https://tcdata360.worldbank.org/indicators/IQ.WEF.PORT.XQ?country=BRA&indicator=1754&viz=line_
chart&years=2007,2017, accessed 24 June). The data on trade facilitation measures are sourced
from the UN Global Survey on Digital and Sustainable Trade Facilitation conducted by the UN Regional
Commissions (https://www.untfsurvey.org/, accessed 24 June). The total trade facilitation score in 2015
is used in the analysis in the main text. The impacts of the ve main individual scores (i.e., cross-border
paperless trade, paperless trade, institutional arrangement and cooperation, formalities, and transparency)
are also assessed and reported in relevant footnotes. For liner shipping connectivity, the number of directly
connected countries in the liner shipping network (i.e., called degree centrality in the network analysis
literature) is calculated based on a dataset provided by MDS Transmodal. Unlike the other two transport
costs determinants, the logarithmic form is used for the estimation and simulation.
REVIEW OF MARITIME TRANSPORT 2021
86
Technical note 5: Impacts of the trade imbalance and trade volume on
maritime transport costs (section E.3)
Estimation of the elasticities
The analysis in section E.3 estimated the elasticity of maritime transport costs with respect to the trade
(im)balance and the trade volume based on the following regression:
ln
Cost
i
c,p
= α
i
+ α
c,p
+ βLBalance
i
c,p
+ γ
log(Volume
i
c,p
)
where Cost
i
c,p
is the maritime transport costs (per quantity unit of goods) for importing commodity i from
country
p to country c, α
i
is the commodity xed effects, α
c,p
is the bilateral country pair xed effects,
LBalance
i
c,p
is the log of the trade balance of commodity i between country c and country p, and Volume
i
c,p
is the import volume of commodity
i from country p to country c. The unit of the goods quantity used
in the variables
Cost
i
c,p
and Volume
i
c,p
is different by commodity. For example, the quantity of tomatoes
is measured in kilograms while the quantity of textile wallcoverings is measured in square meters. The
difference in the measurement unit is controlled by the commodity xed effects
α
i
in the regression.
Also, the impacts of the distance and the transport costs determinants analyzed in section E.2 (i.e., the
quality of the port infrastructure, trade facilitation measures, and the direct liner shipping connections) are
controled by the bilateral country pair xed effects
α
c,p
in the present analysis.
The estimated elasticities,
β and γ, are multiplied by 10 in gure 3.19. β represents the trade imbalance
effect, and
γ represents the economies of scale effect. It should be noted that the estimated economies of
scale effect can be overestimated due to the reverse causality stemming from the trade promotion effect
of low transport costs.
Data
All the variables used in the regression are based on the Global Transport Costs Dataset for International
Trade (https://unctadstat.unctad.org/EN/TransportCost.html, accessed 24 June) developed by UNCTAD,
the World Bank, and Equitable Maritime Consulting. The number of observations in the regression is
763,352 after selecting observations where the maritime trade value on the opposite direction is available.
The maritime transport costs per quantity unit of goods,
Cost
i
c,p
, are calculated by the following
formula:
(CIF
i
c,p
- FOB
i
c,p
) / Volume
i
c,p
, where CIF
i
c,p
is the CIF value of commodity i’s imports from country p
to country
c, and FOB
i
c,p
is the corresponding FOB value. The log of the trade balance, LBalance
i
c,p
, is
calculated by the following formula:
LBalance
i
c,p
= log(Value
i
c,p
) - log(Value
i
p,c
), where Value
i
c,p
is the
import value (in terms of FOB) of commodity
i from country p to country c, and Value
i
p,c
is the trade value
of commodity
i in the opposite direction (i.e., from country c to country p).
4
This chapter provides key performance indicators based
on a growing wealth of data derived from satellite tracking
of vessels, shipping schedules, and port information
platforms. Analysis of these data can help both users
and providers of port and shipping services to compare
progress and options and improve the efciency of
international maritime transport. The chapter has four
sections.
A – Port calls – In early 2020, the pandemic initially resulted
in a decline in ship arrivals, but there was a rebound in the
second half of 2020 along with an increase in the median time
that ships were spending in port. The advanced economies
had higher volumes and lower turnaround times compared
with smaller and less developed countries which suffered
from diseconomies of scale and lower capacities. In Africa,
those countries that had most container ship calls – Egypt
and Morocco – also received larger vessels and had fast
turnarounds.
B – Liner connectivity – There is a growing connectivity
divide. Countries with low connectivity cannot generate the
volume of trade that would encourage the frequent services
they need to better connect to overseas markets. Among
the 50 least-connected economies, 37 are small island
economies.
C– Port performance – For container, dry-bulk, and tanker-
port operations larger call sizes are associated with longer
port stays, as it takes more time to load and unload greater
volumes of cargo. However, if measured per ton or container
of cargo, countries and ports with larger call sizes also record
signicantly better port performance. For large container
ships the fastest average container handling speed is in
Malaysia. For loading dry bulk cargo the highest productivity
is in Australia, and for loading oil cargo it is in Angola.
D – Greenhouse gas emissions – Over the last decade, the
world eet has become more energy efcient. Nevertheless,
there is continued growth in total GHG emissions, of which
a high proportion is from container ships, particularly those
that are older and less energy efcient. Ambitious measures
will be needed to achieve the long-term goal of signicantly
reducing emissions.
Key performance
indicators for ports
and the shipping fleet
LINER SHIPPING CONNECTIVITY
PORT OPERATIONS
18 of the 25 least
connected economies
and territories for which
an LSCI has been
generated are islands
The long-term
trend in the
distribution of
the LSCI shows
a widening gap
between the
best and least
connected
countries
United States
6
Spain
7
Netherlands
8
United Kingdom
9
Belgium
10
The top 5 economies with the highest Liner Shipping
Connectivity Index (LSCI) are in Asia
China
1
Singapore
2
Republic of Korea
3
Malaysia
4
Hong Kong, China
5
The fastest loading operation
Brazil
25
Colombia
28
Australia
2019 2020 second
quarter
of 2021
Tonnes loaded
per minute
Kuwait
90
Qatar
95
Angola
Tonnes loaded
per minute
Dry bulk carriers Tankers
113
48
Larger ships and fewer port calls
are two sides of the same coin
7 841
Maximum
vessel size
Calls
per week
30
Ship sizes have increased faster than trade volumes
and total deployed capacity
CARBON DIOXIDE EMISSIONS
The energy
transition in
maritime
transport
implies a major
transformation
of the industry
In the process
of decarbonizing
shipping,
and average
shipping speeds
will decrease
maritime
transport costs
will increase,
as a result,
maritime logistics
costs will go up
Key performance
indicators for ports and
the shipping eet
GHG emissions from
shipping must be
phased out to avoid
the costs of not
acting in the face of
climate change
Decarbonization
measures will have a
greater impact on
some countries than
others, notably on
SIDS or LDCs, which
may need support to
mitigate the
increased maritime
logistics costs
4. Key performance indicators for ports and the shipping eet
89
A. PORT CALLS AND TURNAROUND TIMES
During the rst six months of 2020, reecting the pandemic-induced slump in demand for shipping and
port services, the word’s cargo-carrying ships as whole made fewer port calls (gure 4.1).
1
The second
half of the year saw a rebound across all regions, albeit not to pre-pandemic levels. The highest number
of ship arrivals were in Europe, East Asia, and South-East Asia (gure 4.2).
1
UNCTAD secretariat calculations, based on data provided by MarineTrafc (www.marinetrafc.com). Aggregated gures
are derived from the fusion of AIS information with port mapping intelligence by MarineTrafc, covering ships of 1,000 GT
and above. For the computation of the turnaround times, passenger ships and RoRo ships are not included. Only arrivals
have been taken into account to measure the number of port calls. Cases with less than ten arrivals or ve distinct vessels
on a country level per commercial market as segmented, are not included. The data will be updated semi-annually on
UNCTAD’s maritime statistics portal (http://stats.unctad.org/maritime).
Source: UNCTAD, based on data provided by MarineTrafc.
Ships of 1,000 GT and above. Not including passenger and Ro/Ro ships.
S1 2018 S2 2018 S1 2019 S2 2019 S1 2020 S2 2020
Liqueed natural gas carriers Liqueed petroleum gas carriers Liquid bulk carriers
Dry breakbulk carriers
Dry bulk carriers
Container ships
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
800 000
900 000
1 000 000
Figure 4.1 Port calls per half year, world total, 2018–2020
Source: UNCTAD, based on data provided MarineTrafc.
Note: Cargo carrying ships only, not including passenger ships and Ro/Ro vessels.
Number of port calls
0
50 000
100 000
150 000
200 000
250 000
300 000
Oil and gas carriers
Dry bulk carriers
Northern America
Latin America
and the Caribbean
Africa
Europe
Western Asia Southern Asia Eastern Asia
South-eastern Asia
Oceania
Container ships
Dry breakbulk carriers
Figure 4.2 Port calls per half year, regional totals, 2018–2020
LINER SHIPPING CONNECTIVITY
PORT OPERATIONS
18 of the 25 least
connected economies
and territories for which
an LSCI has been
generated are islands
The long-term
trend in the
distribution of
the LSCI shows
a widening gap
between the
best and least
connected
countries
United States
6
Spain
7
Netherlands
8
United Kingdom
9
Belgium
10
The top 5 economies with the highest Liner Shipping
Connectivity Index (LSCI) are in Asia
China
1
Singapore
2
Republic of Korea
3
Malaysia
4
Hong Kong, China
5
The fastest loading operation
Brazil
25
Colombia
28
Australia
2019 2020 second
quarter
of 2021
Tonnes loaded
per minute
Kuwait
90
Qatar
95
Angola
Tonnes loaded
per minute
Dry bulk carriers Tankers
113
48
Larger ships and fewer port calls
are two sides of the same coin
7 841
Maximum
vessel size
Calls
per week
30
Ship sizes have increased faster than trade volumes
and total deployed capacity
CARBON DIOXIDE EMISSIONS
The energy
transition in
maritime
transport
implies a major
transformation
of the industry
In the process
of decarbonizing
shipping,
and average
shipping speeds
will decrease
maritime
transport costs
will increase,
as a result,
maritime logistics
costs will go up
Key performance
indicators for ports and
the shipping eet
GHG emissions from
shipping must be
phased out to avoid
the costs of not
acting in the face of
climate change
Decarbonization
measures will have a
greater impact on
some countries than
others, notably on
SIDS or LDCs, which
may need support to
mitigate the
increased maritime
logistics costs
REVIEW OF MARITIME TRANSPORT 2021
90
Among the top 25 countries with the most container ship arrivals, the fastest median turnaround time was
in Japan at 0.34 days, followed by Taiwan Province of China at 0.44 days, Hong Kong, China, at 0.52 days
and China and Turkey both at 0.62 days (table 4.2). The longest average time in port was in the Russian
Federation at 1.31 days, followed by Belgium at 1.04 days, the United States at 1.03 days and Indonesia
at 0.99 days. For the container ships calling in its ports, the Russian Federation also recorded the highest
average age and the smallest average size.
Figure 4.3 is a stylized map of port calls. It depicts container ship port calls per country, as well as
the median time in port. Figure 4.4 does the same for container ship port calls and the maximum size
of ship. Figure 4.5 and gure 4.6 zoom in on the same details for African countries. These gurative
maps illustrate the importance of Asian economies. They also show that countries with more port calls
tend to receive larger ships, while small island states can only accommodate fewer and smaller vessels.
Source: UNCTAD, based on data provided by MarineTrafc.
Note: Ships of 1,000 GT and above. Labelled countries had more than 5,000 container ship port calls in 2020. For the
complete table of all countries see http://stats.unctad.org/maritime.
Median time at port
BRA
CHN
DEU
IND
ITA
JPN
KOR
MYS
BEL
HKG
NLD
PHL
SGP
ESP
THA
TUR
GBR
USA
VNM
IDN
ARE
1 days
2 days
3+ days
Figure 4.3 Container ship port calls and time in port, 2020
During 2020, to contain the virus, terminal operators, authorities, and intermodal transport providers took
steps to reduce social contact. However, this also slowed port operations so that vessels of all types
had to spend more time in port (table 4.1). The greatest average increase in lengths of stay was for dry
break bulk carriers whose general cargo operations tend to be more labour intensive and less automated.
Moreover, when berth space is limited operators may prioritize scheduled container shipping calls or large
dry bulk carriers over smaller vessels.
Source: UNCTAD, based on data provided by MarineTrafc (https://www.marinetrafc.com).
Note: Ships of 1,000 GT and above. Not including passenger ships and Ro/Ro vessels.
Table 4.1 Time in port, age, and vessel sizes, by vessel type, 2020, world total
Vessel type
Median
time in
port (days),
2020
Median
time in
port, %
change
over 2019
Average
size
(GT) of
vessels
Average
age of
vessels
Maximum
size (GT)
of vessels
Average
cargo
carrying
capacity
(dwt) per
vessel
Maximum
cargo
carrying
capacity
(dwt) of
vessels
Average
container
carrying
capacity (TEU)
per container
ship
Container ships 0.71 2.3 38 308 14 237 200 3 543
Dry break bulk carriers 1.15 4.3 5 439 21 91 784 7 405 116 173
Dry bulk carriers 2.07 2.7 32 146 14 204 014 57 453 404 389
Liqueed natural gas carriers 1.12 0.8 95 270 12 168 189 74 229 156 000
Liqueed petroleum gas carriers 1.04 3.0 10 826 15 59 229 12 164 64 220
Wet bulk carriers 0.97 3.9 15 704 14 234 006 27 242 441 561
All ships 1.00 2.9 14 663 18 237 200 24 956 441 561 3 543
4. Key performance indicators for ports and the shipping eet
91
Source: UNCTAD, based on data provided by MarineTrafc.
Note: Ships of 1,000 GT and above. Labelled countries had more than 5,000 container ship port calls in 2020. For the
complete table of all countries see http://stats.unctad.org/maritime.
BRA
CHN
DEU
IND
ITA
JPN
KOR
MYS
BEL
HKG
NLD
PHL
SGP
ESP
THA
TUR
GBR
USA
VNM
IDN
ARE
5 000
10 000
15 000
20 000
Maximum vessel size in TEU
Figure 4.4 Container ship port calls and maximum ship sizes, 2020
Source: UNCTAD, based on data provided by MarineTrafc.
Note: Ships of 1000 GT and above. Ranked by number of port calls.
For the complete table of all countries, see http://stats.unctad.org/maritime.
Table 4.2 Port calls and median time spent in port, container ships, 2020, top 25 countries
Country
Number of
arrivals
Median time
in port
(days)
Average age
of vessels
(years)
Average container
carrying capacity
(TEU) per vessel
Maximum container
carrying capacity
(TEU) of vessels
China 74 413 0.62 12 4 637 23 964
Japan 37 959 0.34 13 1 620 18 400
Republic of Korea 21 461 0.64 13 3 056 23 964
United States of America 18 866 1.03 14 5 347 22 000
Taiwan Province of China 16 621 0.44 14 2 665 23 964
Malaysia 15 875 0.80 14 3 706 23 756
Indonesia 15 019 0.99 14 1 509 14 855
Singapore 14 946 0.80 12 5 228 23 964
Spain 14 321 0.66 14 3 258 23 756
Hong Kong, China 11 976 0.52 13 3 637 23 964
Netherlands 11 595 0.80 14 2 942 23 964
Turkey 11 594 0.62 16 3 034 19 462
Viet Nam 9 587 0.90 13 1 966 18 400
Thailand 8 107 0.67 11 2 177 23 656
Italy 7 929 0.92 16 3 886 23 756
India 7 865 0.92 15 4 225 14 500
United Kingdom 7 834 0.73 15 3 465 23 964
United Arab Emirates 7 612 0.95 16 4 232 23 964
Brazil 7 609 0.77 10 5 877 12 200
Germany 7 139 0.98
13 4 442 23 964
Belgium 5 235 1.04 14 4 652 23 964
Philippines 5 181 0.89 15 1 858 6 622
Panama 4 467 0.69 12 4 139 14 414
Morocco 4 317 0.74 14 4 094 23 756
Russian Federation 4 184 1.31 18 1 509 9 400
Subtotal, top 25 351 712
World total 459 417 0.71 14 3 543 23 964
REVIEW OF MARITIME TRANSPORT 2021
92
The longest times in port are generally in Africa – notably in Nigeria, Sudan, and Tanzania – though
Morocco is an exception with one of the world’s shortest times.
Large ships with more cargo to be loaded or unloaded will normally require longer in port, though ports
that can handle larger ships also tend to be more modern and better equipped, so can work more quickly
and this is therefore a non-linear relationship (gure 4.7).
Some of the fastest turnarounds are in countries that have very few port calls and only receive ships with
a few containers to be loaded and unloaded, so there is little congestion. However, at the other end of the
scale, turnarounds are also fast in countries that have many port calls and can accommodate the largest
container vessels. These ports benet from economies of scale and investments in the latest technologies
and infrastructure; their efciency in turn attracts more vessels, further boosting the number of arrivals.
Source: UNCTAD, based on data provided by MarineTrafc.
Note: Ships of 1,000 GT and above.
Time in port
3+ days
2 days
1 days
2.5 days
1.5 days
Figure 4.5 Container ship port calls
in Africa and time in port,
2020
Figure 4.6 Container ship port calls
in Africa and maximum
ship sizes, 2020
Maximum vessel
size in TEU
20 000
10 000
0
15 000
5 000
Source: UNCTAD, based on data provided by MarineTrafc.
Note: Ships of 1,000 GT and above.
Source: UNCTAD, based on data provided by MarineTrafc. Both axes in logarithmic scale.
Note: Ships of 1,000 GT and above. For the complete table of all countries, see http://stats.unctad.org/maritime.
0.50 day
1 day
2 days
4 days
8 days
100 1 000 10 000 100 000
Port calls
Median time in port
Maximum vessel
size (TEU)
1 000
5 000
10 000
15 000
20 000
Figure 4.7 Median time in port, number of port calls, and maximum vessel sizes, per
country, container ships, 2020
4. Key performance indicators for ports and the shipping eet
93
Countries in the middle of the distribution report a wide range of median times, reecting differences in
efciency and other variables such as vessel age and cargo throughput.
B. LINER SHIPPING CONNECTIVITY
Since 2020, UNCTAD, in collaboration with MDS Transmodal, has reported quarterly values, at both port
and country levels, for the Liner Shipping Connectivity Index (LSCI).
2
Countries with better liner shipping
connectivity as reected in the LSCI, generally have better access to overseas markets so can be more
competitive (UNCTAD, 2017).
In the second quarter of 2021, the top-ve most-connected economies, with the highest LSCIs, were
in Asia – China, Singapore, Republic of Korea, Malaysia, and Hong Kong, China. These were followed
by the United States and four European countries – Spain, Netherlands, United Kingdom, and Belgium
(gure 4.8). In the four succeeding quarters, China widened its lead, while the United States saw a decline
2
UNCTAD developed the Liner Shipping Connectivity Index (LSCI) in 2004. The basic concepts and major trends are
presented and discussed in detail in (UNCTAD, 2017) and (MDST, 2020).
In 2019, the LSCI, in collaboration with MDS Transmodal (https://www.mdst.co.uk) was updated and improved,
comprising additional country coverage including several SIDS, and incorporating one additional component, covering
the number of countries that can be reached without the need for transhipment. The remaining ve components, notably
the number of companies that provide services, the number of services, the number of ships that call per month, the
total annualized deployed container carrying capacity, and ship sizes, have remained unchanged. Applying the same
methodology as for the country-level LSCI, UNCTAD has generated a new port Liner Shipping Connectivity Index.
Each of the six components of the port LSCI captures a key aspect of a connectivity.
(a) A high number of scheduled ship calls allows for a high service frequency for imports and exports.
(b) A high deployed total capacity allows shippers to trade large volumes of imports and exports.
(c) A high number of regular services from and to the port is associated with shipping options to reach different
overseas markets.
(d) A high number of liner shipping companies that provide services is an indicator of the level of competition in the
market.
(e) Large ship sizes are associated with economies of scale on the sea-leg and potentially lower transport costs.
(f) A high number of destination ports that can be reached without the need for transhipment is an indicator of fast
and reliable direct connections to foreign markets.
Since 2020, the same methodology is applied on the country and the port level on a quarterly basis.
Source: UNCTAD, based on data provided by MDS Transmodal. For the complete data set for all countries see
http://stats.unctad.org/LSCI.
60
80
100
120
140
160
180
2006
Q1
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Q2
China
Singapore
Republic
of Korea
Malaysia
Hong Kong,
China
United States
Netherlands
Spain
United
Kingdom
Belgium
Figure 4.8 Liner shipping connectivity index, top 10 countries, rst quarter 2006 to second
quarter 2021
REVIEW OF MARITIME TRANSPORT 2021
94
because of the inactivity in the second quarter of a trans-Pacic service of the 2M Alliance which had
deployed ultra-large container carriers.
Of the 25 least-connected economies and territories for which an LSCI has been generated, 18 are
islands whose LSCI scores have not signicantly improved over the last 15 years. These are Anguilla,
Antigua and Barbuda, Bermuda, Bonaire, Saint Eustatius and Saba, Cabo Verde, Cayman Islands,
Christmas Island, Cook Islands, Micronesia, Montserrat, Niue, Norfolk Island, Palau, São Tomé and
Príncipe, Saint Kitts and Nevis, Timor-Leste, Turks and Caicos Islands and Tuvalu. Among the bottom 25,
two countries, Moldova and Paraguay, are landlocked so their LSCIs are determined by containerized
river transport services. The remaining ve economies are Albania, Democratic Republic of Congo,
Eritrea, Gibraltar and Guinea-Bissau, whose seaborne trade is often handled by ports in neighbouring
countries.
1. A growing connectivity divide
Over the period 2006–2021 the LSCI indicates a widening gap between the best- and least-connected
countries, reected in the dataset as an increase in the standard deviation, from 20 to 28. Over this period,
China increased its LSCI by 69 per cent while many SIDS saw their LSCIs stagnate.
Among the 50 least-connected economies, 37 were small island economies. The exceptions were
Bahamas, Jamaica and Mauritius which have high and growing LSCIs because they have developed into
regional hubs, attracting transhipment of containerized trade for other countries. They can thus also offer
their own importers and exporters better access to overseas markets (UNCTAD, 2021b).
Figure 4.9 depicts the LSCI at port level. Eight of the top ten ports were in Asia, led by Shanghai; the
remaining two are in Europe – Rotterdam and Antwerp. The best-connected port in Latin America and the
Caribbean was Cartagena, Colombia; in South Asia it was Colombo, Sri Lanka; in North America it was
New York/New Jersey, United States; and in Africa it was Tanger Med, Morocco (gure 4.10).
Source: UNCTAD, based on data provided by MDS Transmodal. For the complete data set for all ports see https://unctadstat.
unctad.org/wds/TableViewer/tableView.aspx?ReportId=170026.
40
50
60
70
80
90
100
110
120
130
140
150
2006
Q1
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Q2
Shanghai, China
Singapore,
Singapore
Ningbo, China
Pusan, Republic
of Korea
Hong Kong,
Hong Kong, China
Qingdao, China
Port Klang,
Malaysia
Rotterdam,
Netherlands
Antwerp, Belgium
Kaohsiung,
Taiwan, Province
of China
Figure 4.9 Port Liner Shipping Connectivity Index, top 10 ports as of second quarter 2021,
rst quarter 2006 to second quarter 2021
4. Key performance indicators for ports and the shipping eet
95
2. Larger ships and fewer companies
To cater for growing demand, there are two main options. Carriers can either deploy more ships, and offer
more services and direct connections, or they can deploy larger ships, or a combination of the two. In
practice, over the last two decades, they have tended to use larger ships (gure 4.11).
The size of the largest ships has increased signicantly, while the average number of companies has
decreased. The outcome over this period was a 280 per cent increase in deployed capacity per company
per country. Ship sizes have increased faster than trade volumes and total deployed capacity, so if ships
are to remain fully loaded they will generally operate on fewer services. Between the rst quarter of 2006
and the second quarter of 2021, the average capacity of the largest ship for each country increased
by 176 per cent – from 2,836 to 7,841 TEU, while the average number of companies per country fell
from 18 to 13.
Between the rst quarter of 2006 and the second quarter of 2021 the capacity of the largest ships for
each country increased by 155 per cent, to 23,963 TEU. In 2006, four countries had calls from more
than 100 companies – Belgium, China, United Kingdom, and the United States. But by the second
quarter of 2021, ports in China had services from only 93 companies, followed by Republic of Korea at
63 companies, the United States at 61, and Japan at 60.
Figure 4.12 Illustrates the trends in maximum vessel sizes and number of companies for selected countries
from different global regions. Most countries have bigger ships and fewer companies. Among the countries
covered in gure 4.12, between 2006 and 2021 the greatest growth in vessel size was in Chile, up by
more than 300 per cent, from 3,430 to 14,300 TEU, while the greatest fall in number of companies was
in Germany, from 97 to 38.
For the SIDS the situation is different. They generally offer limited and scattered markets so there is little
justication for larger ships. The number of companies providing services for most SIDS has remained
small, and there is little competition (see Samoa in gure 4.12).
Source: Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University, based on data provided by UNCTAD.
LSCI values are average of all 4 quarters of 2020.
Port LSCI (2021)
Less than 10
10 to 25
25 to 50
50 to 75
More than 75
Country LSCI (2021)
Less than 10
10 to 25
25 to 50
50 to 75
More than 75
No Data
Main Shipping Lane
Secondary Shipping Lane
Distribution of LSCI (2021)
Mean : 19.5
Median : 11.4
StdDev : 20.7
0.7
7.1
13.5
19.9
26.3
32.7
39
45.4
51.8
58.2
64.6
71
77.4
83.8
90.1
96.5
102.9
109.3
115.7
122.1
128.5
0
50
100
150
Number of ports
Normal Dist.
Figure 4.10 Liner Shipping Connectivity Index, country and port level, 2020
REVIEW OF MARITIME TRANSPORT 2021
96
The relationship between total deployed container carrying capacities, ships sizes, and the number of
companies in a market is further illustrated in gure 4.13. Moving vertically in the chart, for a given number
of companies in a market, the total deployed capacity – how many containers can be carried to or from
Source: UNCTAD, based on data provided by MDS Transmodal.
0
5 000
10 000
15 000
20 000
25 000
0
2
4
6
8
10
12
14
16
18
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Maximum vessel size (TEU)
global
Companies
average per country
20
Companies Maximum vessel size (global)
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
7 000 000
0
5
10
15
20
25
30
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Total deployed capacity (TEU)
average per country
Direct connections
average per country
35
Direct connections
Total deployed capacity
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
0
5
10
15
20
25
30
35
40
Maximum vessel size (TEU)
average per country
Weekly calls
average per country
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
450 000
500 000
0
5
10
15
20
25
30
35
40
Services
average per country
45
Deployed capacity per company (TEU)
average per country
Calls per week Maximum vessel size Services
TEU deployed per company
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Figure 4.11 Trends in global container ship deployment, rst quarter 2006 to second
quarter 2021
4. Key performance indicators for ports and the shipping eet
97
Source: UNCTAD, based on data provided by MDS Transmodal.
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
0
5
10
15
20
25
30
Maximum vessel size (TEU)
Chile
Companies
Chile
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
0
5 000
10 000
15 000
20 000
25 000
0
20
40
60
80
100
Maximum vessel size (TEU)
Germany
Companies
Germany
Companies Maximum vessel size
Companies Maximum vessel size
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
0
5 000
10 000
15 000
20 000
25 000
0
20
40
60
80
100
120
Maximum vessel size (TEU)
China
Companies
China
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Maximum vessel size (TEU)
Samoa
Companies
Samoa
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
0
2
4
6
8
10
12
Companies Maximum vessel size
Companies Maximum vessel size
2006 Q1
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 Q2
Figure 4.12 Trends in vessel sizes and number of companies providing services, selected
countries, rst quarter 2006 to second quarter 2021
a country – increases with maximum vessel size. For each country, however, there is a trade-off between
accommodating more companies or receiving larger ships: moving horizontally in the chart, for a given
deployed capacity, the bigger ships are in countries with fewer companies in their markets.
REVIEW OF MARITIME TRANSPORT 2021
98
3. Bilateral liner shipping connectivity
In addition to the country- and port-level LSCI, UNCTAD also produces a connectivity index for country
pairs, the Liner Shipping Bilateral Connectivity Index (LSBCI).
3
Progress in the LSBCI, along with its ve
component indicators, is illustrated in gure 4.14. Since 2006, on average the LSBCI has increased but
there have been a few disruptions – notably the global nancial crisis of 2008, and the pandemic from 2020.
The nancial crisis had an almost immediate impact, but the pandemic impact came in waves – delivering
a supply shock that then translated into a demand shock along with differences between countries in the
local impact and propagation of the virus.
In addition to these disruptions, since the last quarter of 2018 the LSBCI has shown a downward trend
which is more a consequence of ongoing structural transformations. One is the increase in ship size.
Between 2006 and 2019 the maximum capacity component of the index more than trebled. Between 2014
and 2019 this was largely offset changes in the other four components, all of which have been declining.
These trends for the component indicators are interlinked. Companies that have invested in larger ships
are aiming for economies of scale which should reduce unit costs. Other companies unable to make these
investments, and to compete, will either withdraw from unprotable routes or leave the industry altogether.
This reduces the number of operators, which has been happening in all regions – in East Asia for the last
seven years, but also in Latin America, and in Sub-Saharan Africa which in addition has fewer operators
offering intra-regional connections.
With fewer companies, there are likely to be fewer direct connections. This is conrmed by the evolution
of the transhipment component and consequently of the common direct component. Nevertheless, as
direct connections are mainly on historical maritime routes the main adjusting variable on those routes is
likely to be the number of competing companies.
Increasing ships size also affects the hosting capacity of ports especially those that have improved their
infrastructure. This could explain the downward trend since 2017 for the frequency component which
reects the number of port-to-port connections between countries.
3
The Liner Shipping Bilateral Connectivity Index (LSBCI), which is publicly available in its annual form at
http://stats.unctad.org/lsbci, is made of ve components: the number of transhipments needed to connect two countries
(transhipment variable), the number of common direct connections between two countries (common direct variable), the
number of port-to-port connections between two countries (frequency variable), the number of liner shipping companies
operating between two countries (operators variable) and, the maximum ship size in TEU deployed between two countries
(max. capacity variable). When no direct connection exists between two countries the latter three components correspond
to connection (option) with the best (highest) value when taking the lowest connecting segment.
Source: UNCTAD, based on data provided by MDS Transmodal.
1 000
10 000
100 000
1 000 000
10 000 000
100 000 000
0 1 10 100
Companies
Total deployed capacity
annual, TEU
Bubble size: proportional to
maximum vessel size, TEU
Figure 4.13 Relationship between maximum vessel sizes, deployed capacity, and the number
of companies, second quarter 2021
4. Key performance indicators for ports and the shipping eet
99
All in all, the LSBCI trend reects a worsening
situation for remote and already poorly
connected countries. Added to this is the
general increase in freight costs which could
have severe consequences for international trade
(UNCTAD, 2021a).
C. PORT CARGO HANDLING
PERFORMANCE
1. Container port performance
In April 2021, to provide stakeholders with a
reference point for maritime trade and transport
the World Bank and IHS Markit published a new
index, the Container Port Performance Index
(CPPI) (World Bank 2021, IHS Markit 2021). This
index combines data on vessels, their port calls
and the cargos they load and unload, as well as
the time they spend in ports.
The rst version had data for 2019 and the rst half
of 2020 (table 4.3), and was dominated by ports in
East Asia, led by Yokohama in Japan, which was
ahead of King Abdullah Port in Saudi Arabia and
Qingdao in China. In Europe, the highest-ranked
port was Algeciras in Spain at 10; in South
Asia, it was Colombo in Sri Lanka at 17; and
in the Americas, Lazaro Cardenas in Mexico at 25.
Source: UNCTAD, based on data provided by MDS Transmodal.
.178 .18 .182 .184 .186 .188
Index
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
LSBCI
.74 .745 .75 .755 .76 .765
Transhipment
.05 .055 .06 .065 .07
Common Direct
.004 .0042 .0044 .0046 .0048
Index
Frequency
.013 .0135 .014 .0145 .015
Operators
.04 .06 .08 .1 .12
Max. Capacity
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Figure 4.14 Liner Shipping Bilateral Connectivity Index (LSBCI) and its components, rst
quarter 2006 to second quarter 2021
Table 4.3 Top 25 ports under the World
Bank IHS Markit Container
Port Performance Index 2020
Source: World Bank and IHS Markit Port Performance Program.
Port name Economy Rank
Yokohama Japan 1
King Abdullah port Saudi Arabia 2
Chiwan China 3
Guangzhou China 4
Kaohsiung Taiwan Province of China 5
Salalah Oman 6
Hong Kong Hong Kong, China 7
Qingdao China 8
Shekou China 9
Algeciras Spain 10
Beirut Lebanon 11
Shimizu China 12
Tanjung Pelepas Malaysia 13
Port Klang Malaysia 14
Singapore Singapore 15
Nagoya Japan 16
Colombo Sri Lanka 17
Sines Portugal 18
Kobe Japan 19
Zhoushan China 20
Jubail Saudi Arabia 21
Yosu Republic of Korea 22
Fuzhou China 23
Ningbo China 24
Lazaro Cardenas Mexico 25
REVIEW OF MARITIME TRANSPORT 2021
100
The only other North American port in the top 50 was Halifax in Canada. In Africa, the top-ranked port
was Djibouti.
UNCTAD has used the raw data from the CPPI to analyse the relationship between the performance of
ports and the time ships spend in them. As indicated in gure 4.15 there are clear economies of scale:
the more containers there are to load and unload – a larger ‘port call size’ – the fewer minutes it takes
to load or unload a container. Nevertheless, total time in port increases with call size (gure 4.16), so it is
reasonable to compare ports or countries within the same range of call sizes.
Port calls where more containers are loaded or unloaded will need longer to handle them, but also be faster
for each individual container move, so the correlation between hours in port and speed of handling a slightly
negative (gure 4.17). But limiting the analysis to one port call range conrms the expected high positive
correlation between the time it takes to move a container and the time it takes to handle a ship (gure 4.18).
For the top 25 economies, table 4.4 summarizes the speed of container handling. For ve of the nine
call-size ranges the fastest handling is in Taiwan Province of China, followed by Japan for two ranges, and
Malaysia and Hong Kong, China for one range each. The ranking per country roughly follows that of the
leading individual ports in table 4.3.
Source: UNCTAD, based on data provided by IHS Markit Port Performance Program.
Minutes per container move
Call size (moves)
0
1
2
3
7
8
9
6
5
4
500 and below 501-1000 1001-1500 1501-2000 2001-2500 2501-3000 3001-4000 4001-6000 6000 and above
Figure 4.15 Minutes per container move for container ships, by range of port call size
Source: UNCTAD, based on data provided by IHS Markit Port Performance Program.
Time in port (hours)
Call size (container moves)
0
50
100
150
250
200
500 and below 501-1000 1001-1500 1501-2000 2001-2500 2501-3000 3001-4000 4001-6000 6000 and above
Figure 4.16 Time in port (hours) for container ships, by range of port call size
4. Key performance indicators for ports and the shipping eet
101
Source: UNCTAD, based on data provided by IHS Markit Port
Performance Program. Coefcient of determination (R2) 0.99.
0
10
20
30
40
50
60
70
0.50 1.00 1.50 2.00 2.50 3.00
Time in port (hours)
Minutes per container move
Figure 4.18 Correlation between time
in port (hours) and minutes
per container move, only
calls with 1001 to 1500
containers per call
Source: UNCTAD, based on data provided by IHS Markit
Port Performance Program.
1
10
100
1000
0.1 1 10
Time in port (hours)
Minutes per container move
Figure 4.17 Correlation between time
in port (hours) and minutes
per container move,
all call sizes
Source: UNCTAD, based on data provided by IHS Markit Port Performance Program.
Table 4.4 Minutes per container move, by range of call size, top 25 countries by port calls
Country\call size <500
501–
1000
1001–
1500
1501–
2000
2001–
2500
2501–
3000
3001–
4000
4001–
6000 >6000
Australia 3.44 2.27 1.84 1.57 1.47 1.31 1.28 1.25 0.81
Belgium 3.71 2.08 1.40 1.10 0.91 0.80 0.73 0.70 0.54
Brazil 3.01 1.96 1.48 1.30 1.16 1.07 0.92
China 2.92 1.68 1.14 0.92 0.77 0.66 0.57 0.49 0.42
Hong Kong, China 3.21 1.60 1.01 0.79 0.77 0.63 0.58 0.45
Taiwan Province of China 2.31 1.25 0.87 0.67 0.58 0.69 0.51
France 3.33 2.21 1.70 1.38 1.27 1.23 1.08 0.89
Germany 4.13 1.92 1.31 1.13 0.96 0.82 0.73 0.65 0.58
India 2.52 1.55 1.22 0.91 0.79 0.75 0.65 0.55
Indonesia 4.22 2.35 2.00 1.45 1.04 1.00 0.80 0.67
Italy 3.55 2.41 1.91 1.54 1.46 1.48 1.44 1.14
Japan 2.57 1.21 1.01 0.80 0.66 0.75 0.70
Republic of Korea 2.88 1.63 1.14 0.89 0.78 0.75 0.65
0.56 0.70
Malaysia 3.83 2.03 1.38 0.98 0.79 0.69 0.55 0.46 0.37
Netherlands 8.14 2.70 1.67 1.44 1.23 0.99 0.80 0.67 0.62
Panama 4.33 1.86 1.36 1.04 0.94 0.96 0.78 0.88 1.23
Philippines 4.67 3.51 2.79 2.29 1.91 1.43 1.42
Singapore 3.87 1.81 1.24 0.95 0.76 0.67 0.59 0.47 0.39
Spain 3.87 1.87 1.29 0.98 0.85 0.72 0.63 0.67 0.48
Thailand 2.69 2.79 1.11 0.94 0.79 0.69 0.70 0.66 0.58
Turkey 3.47 2.03 1.42 1.16 1.09 1.06 0.94 0.64 0.57
United Arab Emirates 6.89 2.41 1.74 1.18 0.85 0.70 0.59 0.52 0.41
United Kingdom 3.79 2.18 1.84 1.53 1.28 1.22 1.27 0.93 0.78
United States 3.16 1.77 1.34 1.16 1.06 1.01 0.93 0.90 0.85
Viet Nam 2.64 1.55 1.13 0.78 0.67 0.64 0.58 0.54 0.52
Average 3.73 2.02 1.45 1.16 0.99 0.91 0.82 0.70 0.62
Median 3.47 1.96 1.36
1.10 0.91 0.80 0.73 0.66 0.57
Minimum 2.31 1.21 0.87 0.67 0.58 0.63 0.51 0.45 0.37
Maximum 8.14 3.51 2.79 2.29 1.91 1.48 1.44 1.25 1.23
REVIEW OF MARITIME TRANSPORT 2021
102
Box 4.1
Port performance in Latin America and the Caribbean – differences between
types of terminals
In Latin America and the Caribbean across 50 countries and territories, logistics and port services are
provided through 1,967 port facilities. Of these, 1,259 are certied as compliant with the International
Ship and Port Facility Security (ISPS) Code, including 982 facilities that handle cargo or passenger
transfer services, and 277 that provide other services, such as shipyards, docks, and others.
Nonetheless, according to an intensive survey of port facilities in the entire region carried out by the
Economic Commission for Latin America and the Caribbean (ECLAC), there are also another 708, of
which 590 are port terminals and 118 are related to other types of service.
Port terminals, including those that are ISPS certied and those that are not, represents a widely
diverse geographical distribution. The top ten countries according to the number of port terminals
are: Brazil, 306; Mexico, 171; Argentina, 143; Chile and Peru, 97 each; Colombia, 88; Paraguay, 65;
Bolivarian Republic of Venezuela, 63; Panama, 48 and Cuba, 45. These 10 countries, out of 50, make
up 74 per cent of the region’s port facilities.
At the opposite end of the ranking, 15 countries or territories have ve or fewer facilities each, and
almost all have no more than one terminal by port specialty: Antigua and Barbuda, Bermuda, Belize,
Barbados, Turks and Caicos Islands, El Salvador, Aruba, Bonaire, Cayman Islands, Dominica, Anguilla,
Montserrat, Sint Eustatius, Saint Barth, and Sint Maarten.
A high proportion of these facilities, 470 in total, are multipurpose terminals. The following chart exhibits
the distribution by zones and specialties:
South America
Caribbean
Central America and Mexico
Multipurpose
303
Liquid Bulk Terminal
273
Dry Bulk Terminal
250
Container
Terminal
49
Passenger
Terminal
30
Ro-Ro
Terminal
20
Bulk
Terminal
(Liquid
+ Dry)
20
ND
20
Multipurpose
83
Liquid Bulk Terminal
68
Dry Bulk
Terminal
43
Passenger
Terminal
49
Con-
tainer
Termi-
nal
21
ND
20
Multipurpose
84
Liquid Bulk
Terminal
70
Dry Bulk
Terminal
53
Passenger
Terminal
29
Container
Terminal
19
Bulk Terminal (Liquid + Dry)
6
Ro-Ro Terminal
2
ND
3
This region is very diverse – in terms of composition, languages, economies, cultural identities, and
modes of adaptation to international instruments. The ports systems too differ in terms of maturity
and productivity. In the liquid and dry bulk categories, in the most specialized countries, productivity
is higher – as in Argentina, Brazil, and Colombia, which move annual volumes close to 600 million mt.
In the last few years region has seen enormous growth in terms of containers, though only four
specialized terminals yet have semi-automated processes. Progress in digitalization and paperless
transactions has also been slow, and regulatory procedures are not very transparent, making it difcult
to promote effective competition. Long-term planning has shown a lack of foresight for ports and
connectivity with hinterland infrastructure
Some areas have weakly regulated quasi-monopolistic markets, while others have excessive
competition, which may prove harmful. Systems for the design, granting and monitoring of concessions
are hampered by institutional weaknesses. These reduce prospects for investment and better
multimodal connections and efcient access to markets and ports. The result is often inefciency and
low productivity.
Increasing vertical integration between shipping lines, port terminals and inland logistics heightens
the risk of monopoly. In certain areas there are also tensions between management, security, and
facilitation. Better security standards would improve development, efciency, and competitiveness.
Nonetheless, there is some optimism that these problems can be solved – with considerable potential
for more containerization and automation of procedures, as well as for improvements in facilitation.
Source: ECLAC, Maritime and Logistics Prole.
4. Key performance indicators for ports and the shipping eet
103
2. Dry bulk port performance
VesselsValue
4
has produced a new dataset that combines AIS data on ship movements with data on cargo
transfers. This can be used to calculate interesting performance indicators for dry bulk port operations
(table 4.5). During the period 2018 to mid-2021, among the top 30 countries in terms of ship arrivals, the
average speed of loading ranged from just six ton per minute in Romania and Turkey to 48 ton in Australia.
For dry bulk cargo, unloading tends to be slower than loading, as the operations cannot use the same
combination of gravity and conveyer belts. The fastest unloading was in China, at 23 tonnes per minute,
and the slowest in Russian Federation, at just 4 tonnes per minute, and in Norway, at just 6 tonnes
per minute. These differences partly reect port performance and economies of scale; Chinese dry bulk
terminals are highly mechanized and handle the world’s largest iron ore carriers, while Russian Federation
and Norway have a long coast with many smaller ports.
4
Data provided electronically by VesselsValue; https://www.vesselsvalue.com, June 2021.
Source: UNCTAD, based on data provided by VesselsValue.
Note: Ranked by number dry bulk carrier arrivals for loading.
Table 4.5 Cargo and vessel handling performance for dry bulk carriers. Top 30 economies
by vessel arrivals, average values for 2018 to rst half of 2021
Ton per minute,
loading
Ton per minute,
discharge
Average waiting to
load duration
(hours)
Average waiting to
discharge duration
(hours)
China 19 23 66 56
Australia 48 11 101 50
United States 14 11 101 49
Brazil 25 9 174 131
Russian Federation 12 4 64 71
Canada 17 10 117 70
Argentina 16 7 45 28
South Africa 20 9 83 30
Japan 9 18 43 41
India 14 16 73 63
Ukraine 10 11 55 48
United Arab Emirates 18 10 50 32
Indonesia 10 8 58 54
Republic of Korea 10 16 37 62
New Zealand 10 8 56 26
Chile 11 9 94 94
Turkey 6 9 45 50
Viet Nam 9 11 53 54
Colombia 28 7 39 25
Malaysia 11 13 73 90
Mexico 12 9 68 61
Taiwan Province of China 12 18 34 48
Peru 18 11 82 49
Oman 16 20 80 52
Norway
20 6 84 78
France 10 12 52 55
Saudi Arabia 8 6 49 80
Morocco 8 6 78 127
Romania 6 7 64 29
Mozambique 15 6 94 123
REVIEW OF MARITIME TRANSPORT 2021
104
Ships generally wait longer to load than to unload, though there are signicant differences between
countries. In Colombia, the average waiting time for unloading is one day while in Brazil it is ve and a half
days. Brazil also has the highest waiting times for loading – on average more than a week. This is partly
a consequence of large vessel sizes and longer distances from the main markets. The shortest waits for
loading cargo are in Taiwan Province of China at 34 hours. Some countries encourage owners to arrive
early to minimize the risk of missing a scheduled port call.
3. Tanker port performance
For tanker port operations too, loading tends to be faster than unloading or ‘discharge’. Among the top
30 countries in terms of tanker arrivals, the fastest loading was by the major oil exporters, reaching up
to 113 tons per minute for Angola, followed by 95 in Qatar, 90 in Kuwait, and 86 in Saudi Arabia. For
unloading oil, the fastest average speeds were in Japan at 83 tons per minute, followed by Republic of
Korea at 67 (table 4.6). As regards waiting times, the lowest average time for loading was in Qatar at
26 hours, and for discharge in Japan at 28 hours.
Source: UNCTAD, based on data provided by VesselsValue.
Note: Ranked by number tanker arrivals for loading.
Table 4.6 Cargo and vessel handling performance for tankers. Top 30 countries by vessel
arrivals, average values for 2018 to rst half of 2021
Tons per minute,
loading
Tons per minute,
discharge
Average waiting to
load duration (hours)
Average waiting to
discharge duration
(hours)
United States 24 33 54 69
Russian Federation 38 27 46 36
China 23 43 45 77
Brazil 46 29 62 66
Saudi Arabia 86 31 37 47
United Arab Emirates 66 25 65 89
Republic of Korea 29 67 50 48
Singapore 26 39 47 43
India 26 50 54 68
Malaysia 28 33 47 65
Netherlands 14 29 59 56
Indonesia 19 20 50 62
Italy 15 32 47 48
Mexico 25 17 77 83
Nigeria 43 9 53 129
Kuwait 90 54 32 37
Iraq 50 8 42 96
Canada 37 39 47 62
Spain 15 27 39 37
Qatar 95 48 26 63
Japan 37 83 35 28
United Kingdom 36 26 53 51
Turkey 54 30 36 37
Norway 63 36 46 72
Angola 113 25 37 84
Belgium 12 16 75 42
Bolivarian Republic of Venezuela 20 13 105 79
Taiwan Province of China 22 48 36 40
Argentina 20 20 39 38
Greece 15 30 55 43
4. Key performance indicators for ports and the shipping eet
105
E. GREENHOUSE GAS EMISSIONS BY THE WORLD FLEET
1. Shipping is missing its greenhouse gas emissions targets
Over the last decade shipping has become more energy efcient so total emissions have grown slower
than the total number of vessels (gure 4.19). Nevertheless, this improvement will not sufce to meet the
emissions targets and the agreed objective of the International Maritime Organization (IMO) “to reduce the
total annual greenhouse gas emissions by at least 50 per cent by 2050 compared to 2008” as part of the
“Initial IMO Strategy on reduction of greenhouse gas emissions from ships” (IMO, 2018).
The trends for the world’s eet over the last decade reect its changing composition, with a declining
proportion of journeys for general cargo ships and an increasing one for LNG carriers, with correspondingly
higher greenhouse gas (GHG) emissions. In gure 4.19 it is also possible to see the annual downturn in
trafc around February in line with the Chinese New Year especially in the dry bulk and container sector.
More recently this chart also shows the impact of the pandemic. ‘Other’ ships include primarily passenger
ships, including ferries and cruise ships which were worst affected. Container ships, also saw an initial
decline at the outset of the pandemic but subsequently recovered.
2. Assigning emissions to ag states
Emissions by ag state mostly correspond to market shares for tonnage. But because the eets have
different compositions the ranking is not identical. Liberia, for example, has a larger market share than
Marshall Islands in terms of total tonnage (table 2.5), but a far smaller share for CO2 emissions because it
has a higher proportion of dry bulk carriers, which produce lower emissions per dwt than other ship types.
Germany, on the other hand, is ranked only 29 in the world eet, but 6 in terms of emissions because
a high proportion of its eet is container ships which tend to go faster than other ship types and emit
more CO2 per dwt.
5
5
Data provided electronically by Marine Benchmark; https://www.marinebenchmark.com, June 2021.
Source: UNCTAD, based on data provided by Marine Benchmark.
0
2
4
6
8
10
12
14
16
18
20
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Container
Dry bulk carrier
Other
Oil and product
tanker
Liqueed gas
tanker
Offshore
General cargo
Figure 4.19 Carbon dioxide emissions by vessel type, monthly, million tons, 2011–2021
REVIEW OF MARITIME TRANSPORT 2021
106
3. Reducing greenhouse gas emissions may reduce connectivity and
increase costs
In June 2021 the IMO’s Marine Environment Protection Committee approved a new short-term measure
for GHG emissions, with both technical and operational requirements.
Earlier that year, UNCTAD undertook a Comprehensive Impact Assessment of the proposed measure,
setting out scenarios for 2030 with or without the measure, across three levels of emission reduction
ambition. The aim was to quantify the changes in maritime logistics costs including shipping and time
costs. All three indicated an increase in maritime logistics costs.
The IMO subsequently agreed the low scenario, for which the UNCTAD study suggested the following
outcomes for 2030:
• A reduction in average speed of 2.8 per cent.
• An increase in average maritime shipping costs by 1.5 per cent.
While signicant, these changes are relatively small when compared to typical variations in freight rates.
They will also have a very small impact on global GDP and certainly far smaller than the disruption caused
by the pandemic or climate change factors, or the costs of not acting in the face of climate change.
However the IMO measures will have a greater impact on some countries than others, notably on SIDS
or LDCs, which may need support to mitigate the increased costs and alleviate the consequent fallout on
their incomes and trade ows (UNCTAD 2021c).
F. SUMMARY AND POLICY CONSIDERATIONS
This chapter has detailed several aspects of port and shipping performance, including eet deployment
and the time ships spend in port, and port performance. It has highlighted persistent differences between
ports and countries, and shown how these are shaped by human, institutional, and technological factors.
Developing countries generally perform worse, with higher costs and lower connectivity – a consequence
of diseconomies of scale, greater distances from overseas markets, and lower levels of digitalization.
These and other countries should be aiming for more competitive commercial environments for port and
shipping operations, ensuring that external costs are accounted for.
Costs are likely to increase slightly as a result of measures needed for decarbonization of maritime
transport. Smaller and most vulnerable economies may need support to mitigate the increased costs and
lower connectivity.
GHG emissions can also be reduced by improving port and shipping performance. If ports can optimize
their availability, ships can plan their voyages so as to arrive in port the moment their berth becomes
available, thus reducing unnecessary speed and fuel consumption.
Maritime transport will also be transformed by the global energy transition which will increase maritime
transport costs and reduce average shipping speeds. Logistics costs increases will be greater for
developing than for developed countries.
Source: UNCTAD, based on data provided by Marine Benchmark.
0
20
40
60
80
100
120
140
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Malta
Bahamas
China
Hong Kong, China
Panama
Marshall Islands
Liberia
Japan
Singapore
Germany
Figure 4.20 Carbon dioxide emissions by ag state, annual, 2011–2020, million tons
4. Key performance indicators for ports and the shipping eet
107
REFERENCES
IHS Markit (2021). New Global Container Port Performance Index (CPPI) Launched by the World Bank
and IHS Markit.
IMO (2018). Initial IMO Strategy on Reduction of GHG Emissions from Ships. MEPC 72/17/Add.1 Annex
11. April. Available at https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/
ResolutionMEPC.304(72)_E.pdf (accessed 24 May 2020).
MDST (2020). Available at https://www.portlsci.com/index.php (accessed 5 July 2020).
UNCTAD (2017). Review of Maritime Transport 2017 (United Nations publication. Sales No. E.17.II.D.10.
New York and Geneva).
UNCTAD (2021a). Container Shipping in Times of COVID-19: Why Freight Rates Have Surged and
Implications for Policy Makers. Policy Brief No. 84. Geneva.
UNCTAD (2021b). Small Island Developing States: Maritime Transport in the Era of a Disruptive Pandemic.
Policy Brief, No. 85. UNCTAD. Geneva.
UNCTAD (2021c). UNCTAD Assessment of the Impact of the IMO Short-Term GHG Reduction Measure
on States, UNCTAD/DTL/TLB/2021/2, UNCTAD. Geneva.
World Bank (2021). Asian Ports Dominate Global Container Port Performance Index.
5
The shipping industry has played a vital role in the
global response to the COVID-19 pandemic – delivering
food, medical supplies, fuel, and other essential goods,
and helping keep global supply chains and commerce
running. This is to a large extent due to the world’s 1.9
million seafarers, who through these extraordinary times
have demonstrated great professionalism and dedication.
But their work has come at some risk to the seafarers
themselves, many of whom have been unable to leave their
ships. This chapter considers issues related to seafarers’
health, safety, security and welfare. It highlights areas where
industry, governments, and international organizations can
cooperate to protect seafarers’ human and legal rights and
implement relevant labour standards, including those agreed
in the Maritime Labour Convention 2006, and in particular,
alleviate their plight resulting from the COVID-19 pandemic.
Such support should be part of the implementation of the
broader 2030 Agenda – in particular, SDG 8, which aims to
ensure decent work and economic growth. Beyond protecting
the rights and welfare of seafarers and their families, this
would also support the economies of their home countries,
help maintain world trade and ensure the ow of goods
across supply chains.
Key shipping stakeholders, including international bodies,
governments, and industry, have issued guidance and
recommendations for ensuring that seafarers are medically t
and have access to medical care, with mechanisms to prevent,
and respond to, COVID-19 emergencies at sea – and that ships
and port facilities meet international sanitary requirements.
They have also argued that seafarers should be recognized as
key workers and vaccinated as a matter of priority. However,
as the pandemic continues for a second year the crew change
crisis appears to be worsening, with continuing logistical
obstacles to the repatriation of seafarers. Stakeholders will
need to redouble their efforts while also regularly updating
their guidance and recommendations in line with the latest
scientic insights.
The COVID-19
seafarer crisis
This chapter has been prepared in response to a
request by the UN General Assembly in its resolution
on “International cooperation to address challenges
faced by seafarers as a result of the COVID-19
pandemic to support global supply chains”
(A/RES/75/17), at para. 7.
The COVID-19
seafarer crisis
1
3
4
5
6
7
Seafarers, many of whom from developing countries, are playing a vital
role in ensuring the ow of critical goods across supply chains and
keeping the world trade moving.
All should be working together to implement relevant labour standards, protect
seafarers’ human rights and advance the objectives of SDG 8 of decent work
and economic growth for sustainable development.
2
Vaccination
Concerted collaborative efforts by industry, governments and
international organizations should ensure that seafarers are
designated as key workers and are vaccinated as a matter of priority
Crew changes
Governments and industry should continue to work together,
including through the Neptune Declaration initiative, and in
collaboration with relevant international organizations, to facilitate
crew changes, in accordance with international standards and in
line with public health considerations
Route deviations
Charterers and other industry stakeholders should
be exible in accepting requests from shipping
companies for route deviation to facilitate crew
changes
International legal framework
States and other relevant stakeholders should
keep under review the relevant legal
framework and ensure that international
obligations are respected and implemented
Maritime single windows
Port community systems should implement the
Single Window concept to cover all the information
and formalities resulting from FAL and other
relevant instruments
Information exchange
Relevant public and private sector stakeholders should continue
their regular exchange of views and best practices on seafarers’
situation and needs
Outbreaks and emergencies at sea
Specic guidance on measures to prevent and deal with COVID-19
and other outbreaks at sea should be updated regularly, in line with
developing scientic insights
Despite important
international efforts and
support, the crew change
crisis has worsened and
seafarers are still facing
serious problems which
need to be addressed:
5. The COVID-19 seafarer crisis
111
A. SEAFARERS CRISIS – RECENT DEVELOPMENTS
Shipping and seafarers are vital to global supply chains and the world economy – transporting over
80 per cent of world trade by volume. Around 1.9 million seafarers work to facilitate the way we live,
and during the COVID-19 pandemic seafarers have continued to demonstrate great professionalism and
dedication, helping to deliver food, medical supplies, fuel, and other essential goods, and keep supply
chains active and global commerce running.
Recognizing this, key shipping stakeholders, including international bodies, governments, and industry,
have issued guidance and recommendations to support seafarers during the pandemic.
1
The aim is to
ensure that seafarers are protected from COVID-19, are medically t and have access to medical care;
that ships and port facilities meet international sanitary requirements; that seafarers are recognised as key
workers; and that they are vaccinated as a matter of priority.
However, the pandemic has seriously disrupted crew changes. Each month, a large number of seafarers
need to be changed over – to prevent fatigue and to comply with international maritime regulations
for safety, crew health and welfare. Aiming to protect public health, as variants of the virus emerge,
governments are continuing to impose border closures, lockdowns and preventative measures
which include suspending crew changes and prohibiting crews from disembarking at port terminals.
Due to these restrictions, and the shortage of international ights, even one year into the pandemic
hundreds of thousands of seafarers remain stranded at sea, far beyond the expiration of their contracts
(De Beukelaer, 2021). As yet, there is no global consensus on uniform measures that may allow for
efcient crew changes and transfer.
The social partners, international organizations, and industry bodies have expressed concern about this
humanitarian crisis. IMO, ILO, ICS, ITF, and UNCTAD have urged member States to designate seafarers
and other marine personnel as key workers and accept their identity documents as evidence of this
status. They have also asked for greater exibility for ship owners and managers to divert ships and
to call in ports where crew change is possible, without imposing penalties. See IMO 2020a, ITF 2020,
IMO 2020b, and UNCTAD 2020d.
On 1 December 2020, the UN General Assembly unanimously adopted a resolution on ‘International
cooperation to address challenges faced by seafarers as a result of the COVID-19 pandemic to support
global supply chains’ (A/RES/75/17).
2
Indonesia, which supplies much of the maritime labour force,
facilitated the negotiation, supported by UNCTAD, ILO and IMO. Co-sponsored by 71 countries, the
resolution urges member States to designate seafarers and other marine personnel as key workers and
encourages governments and other stakeholders to implement the “Industry recommended framework of
protocols for ensuring safe ship crew changes and travel during the Coronavirus (COVID-19) pandemic”,
the importance of which was recognized by the Maritime Safety Committee of the IMO (IMO, 2021a).
3
The
resolution also calls upon governments to facilitate maritime crew changes by enabling them to embark
and disembark and expediting travel and repatriation efforts, while also ensuring access to medical care.
In addition, on 8 December 2020, the Governing Body of the International Labour Organization adopted
a ‘Resolution concerning maritime labour issues and the COVID-19 pandemic’ (ILO, 2020b). This urges
all Members, to collaborate to identify obstacles to crew changes; designate seafarers as “key workers”,
for the purpose of facilitation of safe and unhindered movement for embarking or disembarking a vessel,
and the facilitation of shore leave. Members should also accept seafarer’s internationally recognized
documentation, including seafarers’ identity documents delivered in conformity with ILO Conventions
Nos 108 and 185, and also consider temporary waivers, exemptions or other changes to visa or
documentary requirements that might normally apply to seafarers. In addition, they should ensure access
1
See further UNCTAD, 2020a, Chapter 5.E. See also COVID-19-related IMO circulars, https://www.imo.org/en/
MediaCentre/HotTopics/Pages/Coronavirus.aspx. For a list of COVID-19 related communications on measures taken by
IMO Member states/Associate Members (updated weekly), see http://www.imo.org/en/MediaCentre/HotTopics/Pages/
COVID-19-Member-States-Communications.aspx, as well as weekly updates from BIMCO on implementation measures
imposed by governments and UN bodies, for sea transport including for crew changes https://www.bimco.org/news/
ports/20210528-bimco-covid-19-weekly-report. For calls for action by UNCTAD, see UNCTAD, 2020b, 2020c, 2020d.
Also see UNCTAD, 2020e, and 2020f, ILO, 2020, WHO, 2020a, and INTERTANKO, 2020. For a roadmap to improve and
ensure good indoor ventilation in the context of COVID-19, see WHO, 2021a. For policy and technical considerations for
implementing a risk-based approach to international travel in the context of COVID-19, including for seafarers, see WHO,
2021b and 2021c.
2
https://undocs.org/en/A/RES/75/17. Inter alia, the Resolution also requests IMO and UNCTAD to report on issues related
to the resolution.
3
Subsequently revised in April 2021, to include reference to vaccination.
The COVID-19
seafarer crisis
1
3
4
5
6
7
Seafarers, many of whom from developing countries, are playing a vital
role in ensuring the ow of critical goods across supply chains and
keeping the world trade moving.
All should be working together to implement relevant labour standards, protect
seafarers’ human rights and advance the objectives of SDG 8 of decent work
and economic growth for sustainable development.
2
Vaccination
Concerted collaborative efforts by industry, governments and
international organizations should ensure that seafarers are
designated as key workers and are vaccinated as a matter of priority
Crew changes
Governments and industry should continue to work together,
including through the Neptune Declaration initiative, and in
collaboration with relevant international organizations, to facilitate
crew changes, in accordance with international standards and in
line with public health considerations
Route deviations
Charterers and other industry stakeholders should
be exible in accepting requests from shipping
companies for route deviation to facilitate crew
changes
International legal framework
States and other relevant stakeholders should
keep under review the relevant legal
framework and ensure that international
obligations are respected and implemented
Maritime single windows
Port community systems should implement the
Single Window concept to cover all the information
and formalities resulting from FAL and other
relevant instruments
Information exchange
Relevant public and private sector stakeholders should continue
their regular exchange of views and best practices on seafarers’
situation and needs
Outbreaks and emergencies at sea
Specic guidance on measures to prevent and deal with COVID-19
and other outbreaks at sea should be updated regularly, in line with
developing scientic insights
Despite important
international efforts and
support, the crew change
crisis has worsened and
seafarers are still facing
serious problems which
need to be addressed:
REVIEW OF MARITIME TRANSPORT 2021
112
to medical facilities ashore, emergency medical treatment and, where necessary, emergency repatriation
for seafarers regardless of nationality.
On 21 September 2020, another relevant resolution was adopted by the Maritime Safety Committee of
the IMO – ‘Recommended action to facilitate ship crew change, access to medical care and seafarer
travel during the COVID-19 pandemic’ (IMO, 2020c). The IMO urged governments and relevant national
authorities to engage nationally and internationally in discussions on the implementation of the industry
protocols and consider applying them to the maximum extent possible; designate seafarers as “key
workers” providing an essential service,in order to facilitate safe and unhindered movement for embarking
or disembarking a vessel; consider temporary measures including (where possible under relevant law)
waivers, exemptions or other relaxations from any visa or documentary requirements that might normally
apply to seafarers; encourage the use of prevention measures, such as tests on crews before embarkation
and provide seafarers with immediate access to medical care ashore.
In response, echoing the above calls, in January 2021, more than 600 companies and organizations
signed the ‘Neptune Declaration on Seafarer Wellbeing and Crew Change’ (Global Maritime
Forum, 2021a).
4
The declaration recognizes their shared responsibility to resolve the crew change crisis
and calls for the implementation of the industry protocols. For this purpose, it denes four main actions:
recognize seafarers as key workers and give them priority access to COVID-19 vaccines; establish
and implement gold-standard health protocols based on existing best practice; increase collaboration
between ship operators and charterers to facilitate crew changes; and ensure air connectivity between
key maritime hubs for seafarers. Subsequently, the signatories developed a set of best practices that
serve as a framework for charterers to facilitate crew changes and work with ship owners to minimize
the disruptions to operations (Global Maritime Forum, 2021b). In addition, they developed a Neptune
Declaration Crew Change Indicator which aggregates data from 10 leading ship managers covering about
90,000 seafarers, to estimate the number affected by the crisis (Global Maritime Forum, 2021c).
5
At
the peak of the crisis, more than 400,000 crew were trapped on board their ships. As of March 2021,
around 200,000 seafarers remained on board commercial vessels beyond the expiry of their contracts
(IMO, 2021b, Aljazeera, 2021).
In March 2021, IMO, ICAO, ILO, WHO and IOM, issued a joint statement on priority vaccination of seafarers
and aircrews (IMO, 2021c, IMO, 2021d; ILO, 2021a). Around that time, there were other important
documents published, including an industry paper ‘COVID-19: Legal, liability and insurance Issues arising
from vaccination of seafarers’ (ICS et al, 2021a), and a ‘Practical guide on vaccination for seafarers and
shipowners’ (ICS et al, 2021b). A further publication by the ICS in May 2021 was ‘Coronavirus (COVID-19):
Roadmap for vaccination of international seafarers’ (ICS et al, 2021c).
The ILO has a Special Tripartite Committee established under the 2006 Maritime Labour Convention
(MLC). In April 2021, the Committee adopted a ‘Resolution concerning the implementation and practical
application of the MLC, 2006, during the COVID-19 pandemic’ which called on Members to designate
and treat seafarers as key workers, and take other necessary steps to ensure their rights (ILO, 2021b).
This would mean providing them with access to COVID-19 vaccination at the earliest opportunity and
promoting the mutual acceptance of vaccine certicates. The Committee also adopted a ‘Resolution
concerning COVID-19 vaccination for seafarers’ (ILO, 2021c), and recommendations concerning the
review of maritime-related instruments (ILO, 2021d). In addition, the ILO, following formal requests from
shipowner and seafarer organizations, has intervened with member States that have ratied MLC 2006, to
remind them of their obligations, notably the obligation of port States to grant access to seafarers in need
of medical care in foreign ports (ILO, 2021e).
In May 2021, the IMO Maritime Safety Committee adopted Resolution MSC.490 (103): ‘Recommended
action to prioritize COVID-19 vaccination of seafarers’ (IMO, 2021e), recommending that member States
and relevant national authorities prioritize their seafarers, as far as practicable, in their national COVID-19
vaccination programmes, taking into account the WHO SAGE Roadmap (WHO, 2020b). And, while
bearing in mind their national vaccines supplies, they should also consider extending COVID-19 vaccines
to seafarers of other nationalities.
Seafarers should also be designated as “key workers” and since they frequently travel across borders
member States should consider exempting them from requiring proof of COVID-19 vaccination as a
condition for entry. In addition, the 109
th
Session of the International Labour Conference in June 2021
4
Signed by more than 800 companies and organizations, as of June 2021.
5
Anglo- Eastern, Bernhard Schulte, Columbia Shipmanagement, Fleet Management (FLEET), OSM, Synergy Marine,
Thome, V.Group, Wallem, and Wilhelmsen Ship Management.
5. The COVID-19 seafarer crisis
113
adopted a ‘Global call to action for a human-centred COVID-19 recovery’ which prioritizes the creation of
decent jobs for all and addresses the inequalities caused by the crisis (ILO, 2021f; ILO, 2021g).
According to IMO, as of the end of June 2021, 60 member States and two associate members had
signed on to designate seafarers as key workers (IMO, 2021f). However, despite a gradual easing, many
countries still maintain restrictions on crew changes based on nationality or travel history. Problems are
also being created in certain contracts of carriage, preventing crew changes while the charterer’s cargo is
onboard and not allowing the ship to deviate to ports where crew changes could take place (ILO, 2021h;
IMO, 2020d). Seafarers also have problems in obtaining visas or travel permits to transit countries.
Despite the above efforts, the crew-change crisis appears to be getting worse. The latest Neptune
Declaration Crew Change Indicator published in July 2021 shows that the number of seafarers on board
beyond the expiry of their contracts continued to rise in June 2021, as did the number of seafarers on
board for over 11 months (table 5.1) (Global Maritime Forum, 2021d). Since the launch of the Indicator in
May 2021, the proportion of seafarers on board vessels beyond the expiry of their contract had increased
from 5.8 to 8.8 per cent – an increase of over 50 per cent. The number of seafarers on board for over
11 months had increased from 0.4 to 1 per cent – an increase of 150 per cent. According to the MLC 2006,
the default maximum period of service on board, following which a seafarer is entitled to repatriation, is
11 months (Regulation 2.5 and Regulation 2.4). In July 2021, the International Chamber of Shipping
estimated that, the number of seafarers remaining on board beyond the expiry of their contract, was
around 250,000.
Table 5.1 Neptune Declaration Crew Change Indicator, July 2021
Percentage of seafarers on board beyond
the expiry of their contracts
Percentage of seafarers on board
for over 11 months
Monthly percentage Percentage point change
from previous month
Monthly percentage Percentage point change
from previous month
May 2021 5.8 - 0.8 -
June 2021 7.2 +1.4 0.4 -0.4
July 2021 8.8 +1.6 1.0 +0.6
Source: Global Maritime Forum 2021.
As part of the reporting for the Neptune Declaration Crew Change Indicator, contributing ship managers
also highlighted the following key developments: “Continual high infection rates and subsequent
domestic lockdowns are still challenging crew changes and causing disruption to crew movements; a
decrease of daily inbound ights to the Philippines as well as the travel ban announced by the Philippine
Government for seafarers traveling from United Arab Emirates, Oman, Nepal, Bangladesh, Sri Lanka,
Pakistan are causing a general disruption to crew movements; travel restrictions continue to prevent
seafarers from going back home and many ights have been cancelled; and leading maritime crew
nations continue to have low vaccination rates and seafarers continue to have limited vaccine access.”
6
(see also box 5.1).
Crew changes and repatriation of seafarers thus still entail serious logistical challenges. Moreover, seafarer
access to medical care and priority vaccination remains inadequate, with important repercussions for their
health and safety, as well as for public health (DevPolicy, 2021).
In June 2021, it was reported that a cargo ship’s captain, who developed COVID-19 symptoms shortly
after the vessel set sail, died on board after 11 days (CNN, 2021). Successive ports refused to allow the
vessel to call, and no medical evacuation measures were taken. For six weeks, despite repeated pleas for
assistance, the ship was stranded offshore, unable to nd a port that would take the corpse. As a result,
the crew was stuck at sea for weeks, with a potential COVID-19 outbreak on its hands.
This state of affairs is clearly unacceptable. Seafarers should not just be designated as key workers and
vaccinated but also provided with speedy and effective emergency medical assistance in the event of a
COVID-19 outbreak at sea.
It will also be important to keep abreast of the latest guidance, which should be updated in line with
the latest scientic insights on transmission pathways, variants, vaccine efcacy, and related risks.
6
According to ICS, informal industry survey data about vaccinations by nationality of seafarers suggests that, with some
notable exceptions, only a small proportion of the world’s seafarers has been currently vaccinated.
REVIEW OF MARITIME TRANSPORT 2021
114
The latest industry guidance for ship-operators (ICS et al., 2021d), draws on sector-specic WHO
guidance published in August 2020 (WHO, 2020a).
7
A good model is that of Belgium which in July 2021,
started a vaccination programme for all seafarers arriving in a Belgian port, regardless of their nationality
(Safety4Sea, 2021). Other countries have seafarer vaccination programmes, including Australia, Cyprus,
Germany, the Netherlands, and the United States. In India the National Union of Seafarers has started a
programme to offer 5,000 doses to seafarers and their families (TradeWinds, 2021).
Addressing the complex issues arising in the context of facilitating global trade in times of a pandemic
while protecting the health of seafarers and the public at large will require the continued engagement of all
stakeholders, including in the negotiations of legal instruments, guidelines and recommendations under
the auspices of UN bodies, including ILO, IMO, and UNCTAD, and in respect of relevant national and local
implementation. Reecting the continued need to raise awareness and alleviate the plight of seafarers,
while recognizing their vital role in world trade, it is worth noting that “Seafarers: at the core of shipping’s
future” was selected as the World Maritime theme for 2021.
8
According to the BIMCO/ICS Seafarer Workforce Report 2021 (BIMCO/ICS 2021), in 2021 around the
world there were 1,892,720 seafarers, of whom 857,540 were ofcers and 1,035,180 were ratings – skilled
seafarers who carry out support work for ofcers. The largest supplier for both ofcers and ratings was
the Philippines followed by the Russian Federation, Indonesia, China, and India (table 5.2). Together, these
countries supplied 44 per cent of the global seafarer workforce. These numbers are growing.
7
The industry guidance also refers to non-sector specic guidance for the general public (WHO, 2020c).
8
https://www.imo.org/en/MediaCentre/PressBriengs/pages/DOTS-2021.aspx.
Box 5.1 The case of the Philippines
Seafarer supply
The Philippines is now the world’s largest source of seafarers, with an estimated 700,000 deployed
on domestic or foreign-agged seagoing vessels. Over a quarter of all global merchant shipping crew
members come from the Philippines. As of 2019, there were 380,000 Filipino seafarers overseas.
By mid-2020, over the three months after the onset of the COVID-19 pandemic and the quarantine
imposed in the country, 50,000 Filipino seafarers had been repatriated, but only 17,845 outbound
or deployed seafarers were recorded by the authorities. As reported by Business Mirror, during
July–September 2020, according to the Philippine Overseas Employment Administration, the
deployment of Filipino seafarers started to return to normal, with over 136,000 sailors able to board
ships traveling in international waters.
Seafarer remittances
In 2019, the Philippines earned more than $30.1 billion from overseas Filipino workers, including
$6.5 billion from seafarers. In 2019, the remittances of overseas Filipino workers constituted
9.3 per cent of the Philippines’ GDP and 7.3 per cent of gross national income. By the end of 2020,
total remittances of overseas foreign workers amounted to $29.9 billion a 0.8 per cent decline that year.
Of this amount, $6.3 billion was remitted by sea-based workers – a 2.8 per cent decline.
Seafarer vaccination
When it comes to vaccination against COVID-19, seafarer-supplying nations are at a disadvantage.
According to the New York Times vaccination tracker, as of the beginning of August 2021, globally
on average 53 doses of the COVID-19 vaccines had been administered for every 100 people, but the
Philippines had delivered only 18 doses for every 100 people. Among the world’s ve-largest seafarer
providers every country except China (117) had delivered less than the global average: Russian
Federation, 42; Indonesia, 25; and India, 34.
Sources: Maritime Industry Authority (2020). A Letter to All Filipino Seafarers Around the World.13 April.
https://marina.gov.ph/2020/04/13/a-letter-to-all-lipino-seafarers-around-the-world. The World Bank.
https://data.worldbank.org. Philippines Overseas Employment Administration https://www.poea.gov.ph/
ofwstat/ofwstat.html. Global Maritime Forum (2020). S.E.A.F.A.R.E.R. 30 September.
https://www.globalmaritimeforum.org/news/s-e-a-f-a-r-e-r. Business Mirror (2020). 136,000 Filipino seafarers
deployed aboard international vessels overseas since July’. 1 October. https://businessmirror.com.ph/2020/
10/01/136000-lipino-seafarers-deployed-aboard-international-vessels-overseas-since-july. Bangko Sentral ng
Pilipinas (2021). Statistics. Overseas Filipinos’ Cash Remittances. https://www.bsp.gov.ph/statistics/external/
ofw2.aspx. Philippine Statistics Authority. https://psa.gov.ph/national-accounts/base-2018/data-series.
5. The COVID-19 seafarer crisis
115
Table 5.2 Five largest seafarer-supply countries, 2021
All Seafarers Ofcers Ratings
1 Philippines Philippines Philippines
2 Russian Federation Russian Federation Russian Federation
3 Indonesia China Indonesia
4 China India China
5 India Indonesia India
Source: BIMCO/ICS, Seafarer Workforce Report 2021, London, 2021.
The 1978 International Convention on Standards of Training, Certication and Watchkeeping for Seafarers
(STCW) establishes basic requirements on training, certication and watchkeeping. Between 2015
and 2021 the supply of STCW -certied ofcers increased by 11 per cent and that of STCW-certied
ratings by 19 per cent (BIMCO/ICS 2015).
B. SEAFARER CRISIS – IMPLEMENTATION OF THE ILO MARITIME
LABOUR CONVENTION, 2006, AS AMENDED (MLC 2006)
The ILO Maritime Labour Convention 2006, entered into force on 20 August 2013 and, as of July 2021,
had been ratied by 98 of the 187 ILO member States. The Convention comprehensively sets out rights
and responsibilities, as well as minimum standards for seafarers’ working and living conditions. It covers a
wide range of issues, including minimum age, employment agreements, hours of work or rest, payment of
wages, paid annual leave, repatriation at the end of contract, and onboard medical care. It also addresses
licensed private recruitment and placement services, accommodation, food and catering, health and
safety protection and accident prevention and complaint handling. In addition, the Convention introduces
compliance and enforcement components for ag State inspection and for port State control. The MLC
2006,
9
taken together with other instruments, thus helps guarantee the health, safety, security and welfare
of seafarers as well as their human rights.
10
Nevertheless, as result of COVID-19 restrictions many seafarers have been stranded. As a recent UN
report highlights, “hundreds of thousands of seafarers are trapped on ships as routine crew changes
cannot be carried out, while hundreds of thousands are stranded on land, prevented from re-joining
ships. Those stranded on ships are being denied their human rights, including their rights to physical
and mental health, to family life, and to freedom of movement, and are often forced to work beyond the
default 11-month maximum period of service on board, as established by MLC 2006. This is resulting
in cases that could amount to forced labour” (UN Global Compact, et al., 2021). The report addresses
seafarers’ rights, and offers cargo owners, charterers and logistics providers guidance and a checklist for
conducting due diligence across their supply chains. The aim is to identify, prevent, mitigate and address
adverse human rights impacts for seafarers affected by the ongoing COVID-19 crisis.
On 12 December 2020, the ILO Committee of Experts on the Application of Conventions and
Recommendations, adopted a document entitled ‘General observation on matters arising from the
application of the MLC, 2006, during the COVID-19 pandemic’ (ILO, 2021i). The Committee noted with
deep concern the impact that COVID-19 restrictions have had on the protection of seafarers’ rights as laid
out in the Convention. The Committee also took note of the observations of the International Transport
Workers’ Federation received on 1 October 2020 and of the International Chamber of Shipping on
26 October 2020 that ratifying States had failed to comply with major provisions of the Convention during
the COVID-19 pandemic – notably regarding cooperation among Members, access to medical care and
repatriation of seafarers. In addition, they noted the risk that fatigue and other health issues could lead to
serious maritime accidents.
11
It therefore, strongly encouraged ratifying States in their different capacities
as ag States, port States or labour-supplying States that have not yet done so, “to recognize seafarers
as key workers without delay and to draw in practice the consequences of such qualication, in order to
restore the respect of their rights as provided for in the MLC, 2006.”
9
https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:91:0::NO::P91_INSTRUMENT_ID:312331.
10
The protection of human rights is a cross cutting issue for the 2030 Agenda for Sustainable Development, which seeks
to realize the human rights of all (see A/RES/70/1, Preamble). Thus, the 2030 Agenda and human rights are interwoven
and inextricably tied together (OHCHR, 2015).
11
For further information on the labour rights and standards involved, see ILO, 2020c, 2020d.
REVIEW OF MARITIME TRANSPORT 2021
116
In February 2021, ILO, through a revised information note, published guidance, on how best to address
the complexities of the current crisis in light of the provisions of MLC, 2006. This was updated to reect the
observations of the ILO Committee of Experts on the Application of Conventions and recommendations
(ILO, 2021j), and also made reference to the MLC, 2006 and previous work of ILO bodies
12
, as well as to
recommendations from the IMO and WHO, and related work by the ICS and the ITF.
The Committee advises that the notion of ‘force majeure’, i.e., unforeseen or unforeseeable circumstances
making it impossible to comply with the MLC 2006, may no longer be invoked from the moment that options
are available to comply with the provisions of the Convention, although more difcult or cumbersome, and
urged ratifying States which have not yet done so, to adopt all necessary measures without delay to
restore the protection of seafarers’ rights and comply to the fullest extent with their obligations under the
MLC 2006.
The note urges all ratifying States to:
• Adopt the necessary measures or reinforce existing ones without delay to ensure that, in no case,
are seafarers forced to continue working on extended contractual arrangements without their
formal, free, and informed consent.
• Recognize seafarers as key workers without delay and to draw in practice the consequences of
such qualication, in order to restore the respect of their rights as provided for in the MLC, 2006.
• Adopt necessary measures, in consultation with relevant seafarers’ and shipowners’ organizations,
to further enhance cooperation with each other to ensure the effective implementation and
enforcement of the Convention, in particular during the COVID-19 pandemic.
Flag States are urged to ensure that:
• The ships that y their ags fully comply with the provisions of the Convention and adopt the
necessary measures and/or reinforce the existing ones without delay, including through more
frequent inspections, if necessary.
• Seafarers on ships that y their ags are covered by adequate measures for the protection of their
health and have access to prompt and adequate medical care whilst working on board, including
access to vaccination (Regulation 4.1).
• Seafarers are provided with occupational health protection and live, work and train on board ship in
a safe and hygienic environment (Regulation 4.3).
• The prohibition to forgo minimum annual leave with pay is strictly enforced, with the limited exceptions
authorized by the competent authority (Regulation 2.4 and Standard A2.4, paragraph 3).
• Seafarers are repatriated at no cost to themselves in the circumstances specied in the Convention,
with strict respect of the default 11 months maximum period of service on board derived from the
provisions of the Convention (Regulation 2.5 and Regulation 2.4).
• Ships that y their ag have sufcient of seafarers employed on board to ensure that ships are operated
safely, efciently and with due regard to security under all conditions, taking into account concerns
about seafarer fatigue and the particular nature and conditions of the voyage (Regulation 2.7).
• No fees or other charges for seafarer recruitment or placement, including the cost of any quarantine
obligations before joining the ship, are borne directly or indirectly, in whole or in part, by the seafarer,
other than the cost authorized under Standard A1.4, paragraph 5.
• Seafarers are granted shore leave for their health and well-being and consistent with the operational
requirement of their positions, subject to the strict respect of any public health measures applicable
to the local population.
Port States are urged to:
• Ensure that seafarers on board ships in their territory who are in need of immediate medical care,
are given access to medical facilities on shore (Regulation 4.1).
• Facilitate the repatriation of seafarers serving on ships which call at their ports or pass through their
territorial or internal waters (Standard A2.5.1, paragraph 7).
12
Including the CEACR and the Special Tripartite Committee of MLC 2006.
5. The COVID-19 seafarer crisis
117
• Allow and facilitate the replacement of seafarers who have disembarked and consequently ensure
the safe manning of ships, by providing an expeditious and non-discriminatory treatment of new crew
members who enter their territory exclusively to join their ships (Standard A2.5.1, paragraph 7).
Labour-supplying States which have not yet done so, are called upon to:
• adopt the necessary and immediate measures to ensure that the required facilities are put in place
in relation to transport, testing and quarantine of seafarers.
• While encouraging a pragmatic approach regarding certicates in respect of training and
qualications since the beginning of the pandemic, all ratifying States are urgently called upon
to adopt all necessary measures without delay to restore the protection of seafarers’ rights and
comply, to the fullest extent, with their obligations under the MLC 2006.
• With respect to maritime labour certicates and inspections, while recognizing challenges since
the outbreak of COVID-19, in respect of conducting the inspections required in accordance with
MLC 2006, all ratifying countries with responsibilities as ag States and port States are urged to
adopt the necessary measures without delay, to ensure compliance with the Convention.
In addition, the guidance notes that the measures adopted to contain the pandemic are creating additional
challenges in resolving the cases of abandonment that occurred before the outbreak of COVID-19.
The IMO/ILO database on reported incidents of abandonment of seafarers, shows a dramatic increase in
cases of abandonment in the second part of 2020, with some of those cases linked to COVID-19-related
measures.
13
It was recalled that, even in the context of the COVID-19 pandemic, ag States, port
States and labour-supplying States remain bound by the requirements concerning repatriation set out in
Regulation 2.5 of the MLC 2006, and the relevant provisions of the Code of the Convention.
Member States must undertake all necessary action to promptly resolve situations of abandonment
and ensure that affected seafarers are repatriated as soon as possible and receive the payment of
outstanding wages, in accordance with the relevant provisions of the MLC 2006 (ILO, 2021j). According
to ILO, as of mid-July 2021, 60 cases had been reported for 2021, which, if that rate continued,
would surpass the number of cases in 2020. Also, resolution of a number of abandonment cases had
been delayed due to the pandemic (e.g., not being able to repatriate seafarers due to restrictions on
disembarkation and travel).
C. CREW CHANGES AND KEY WORKER STATUS – OTHER RELEVANT
INTERNATIONAL LEGAL INSTRUMENTS
In addition to the MLC 2006, a number of other international conventions and instruments contain
provisions aiming to reduce the formalities and documents required, and to facilitate and simplify crew
changes. These cover issues such as seafarers’ repatriation, transit and joining ships, and the issuance
and harmonization of seafarers’ identity documents, while enhancing border and port security. Adopting
and implementing these instruments would ease the situation of seafarers during the COVID-19 pandemic
and beyond.
ILO Convention No. 108 on Seafarers’ Identity Documents, 1958
It has been a longstanding common practice to allow seafarers shore leave to access medical,
communications and other onshore welfare facilities. In addition, to join or change ships seafarers may
need to transit or transfer through countries, which requires border facilitation at seaports and airports.
For this purpose, they have traditionally been issued with a seafarers’ identity document (SID). Although
a SID is not considered a travel documents per se, like a passport or visa it may be subject to the same
national laws.
The Seafarers’ Identity Documents Convention, 1958 (No. 108) entered into force on 19 February 1961,
and has been ratied by 64 States.
14
The Convention species the minimum mandatory details that should
be contained in the SID but does not require any security features, or specic form of the document.
As a result, various countries subsequently developed their own, making it difcult for border and port
authorities to determine whether a document is legitimate.
13
https://www.ilo.org/dyn/seafarers/seafarersbrowse.home. For more information on work by IMO/ILO in cooperation
with ITF, on the issue of abandonment of seafarers, see https://www.imo.org/en/OurWork/Legal/Pages/Seafarer-
abandonment.aspx.
14
https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C108.
REVIEW OF MARITIME TRANSPORT 2021
118
ILO Convention No. 185 on Seafarers’ Identity Documents (Revised)
2003, as amended
Following the terrorist attacks of 11 September 2001, the Seafarers’ Identity Documents Convention
(Revised), 2003 (No. 185), was adopted.
15
It included innovations that related to the form of the SID, which
addition to a photograph and other details could include biometric security features such as ngerprints as
well as verication options for uniformity and machine readability. The Convention also contains minimum
requirements for the SID’s issuance processes and procedures, including quality control, national
databases, and national focal points to provide information to border authorities. In particular, article 6,
paragraph 7, of the Convention, provides: “Each Member for which this Convention is in force shall, in the
shortest possible time, also permit the entry into its territory of seafarers holding a valid seafarers’ identity
document supplemented by a passport, when entry is requested for the purpose of: (a) joining their ship
or transferring to another ship; (b) passing in transit to join their ship in another country or for repatriation;
or any other purpose approved by the authorities of the Member concerned.”
Convention No.185 entered into force in February 2005, but so far has been ratied by only 36 out of
187 ILO member States, including only few port States. Although some countries have made considerable
investment to properly implement this Convention, they can therefore only count on only a few other
countries to recognize their SIDs. Moreover, only a few ratifying countries are in a position to issue SIDs
that conform with the Convention, while 64 countries still remain Parties only to the 1958 Convention.
Implementation has been slow partly because the specied ngerprint technology and biometric features
were soon considered out of date. Instead, since 2003 many border authorities have been using the
standards of the International Civil Aviation Authority, namely, ICAO Doc 9303 on Machine Readable Travel
Documents.
16
This is now universally followed for travel and similar documents and includes the facial
image in a contactless chip – as in electronic passports.
In 2016, ILO Convention No.185 was subsequently amended to align its biometric requirements with
those of ICAO Doc 9303.
17
This way, the SID should look and function like an e-passport, booklet, or card
and can be issued, read, and veried with the same equipment – enhancing security while simplifying the
processes for seafarers when they arrive in ports, or transit or cross international borders.
The amended version entered into force in June 2017, and the amendments are applicable to all member
States to the original Convention No.185, except for Marshall Islands. Authorities issuing SIDs, were
given a ve-year transition period to update their systems, i.e., until 2022, although individual countries
may issue the new SIDs as soon as they are able to. All the 1.9 million seafarers could benet from the
new SIDs, which would allow them to travel without a visa to join their ships and to disembark in ports.
Unfortunately, implementation appears to have slowed due to the COVID-19 pandemic.
IMO Convention on Facilitation of International Maritime Trafc, 1965
(FAL Convention)
The IMO Convention on Facilitation of International Maritime Trafc, 1965 (FAL Convention) entered into
force on 5 March 1967, and has been ratied by 125 out of 174 IMO member States.
18
Its objective
is “to facilitate maritime trafc by simplifying and reducing to a minimum the formalities, documentary
requirements and procedures on the arrival, stay and departure of ships engaged in international voyages.”
Rather than address trade-related aspects of shipping, it focuses on the formalities and procedures for
ships calling in ports, including those related to the arrival and departure of seafarers.
The FAL Convention contains standards and recommended practices and rules for simplifying formalities
and documentary requirements. Customs and immigration ofcials and port authorities should ask for
the minimum of information at the appropriate time, and offer documents to be completed in a standard
format, while those providing information, should provide accurate data, at the appropriate time and in
the agreed format.
15
https://seafarersrights.org/wp-content/uploads/2018/03/INTERNATIONAL_TREATY_ILO-CONVENTION-C185_2003_
ENG.pdf.
16
https://www.icao.int/publications/pages/publication.aspx?docnum=9303.
17
https://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0::NO::P12100_ILO_CODE:C185.
18
https://euroflag.lu/wp-content/uploads/2019/03/Convention-on-Facilitation-of-International-Maritime-Traffic-1965-
as-amended-FAL-Convention-2.7.4-Recommended-Practice.pdf. For more information on the FAL Convention, see
Chapter 5, Review of Maritime Transport 2021.
5. The COVID-19 seafarer crisis
119
• 2009 amendments to the FAL Convention
19
– These entered into force on 15 May 2010 and include
changes related to the contents and purpose of documents: “A passport or an identity document
issued in accordance with relevant ILO conventions, or else a valid and duly recognized seafarer’s
identity document, shall be the basic document providing public authorities with information relating
to the individual member of the crew on arrival or departure of a ship.”
• 2016 amendments to the FAL Convention
20
– These entered into force on 1 January 2018 and
provide for additional guarantees. Any discrimination is prohibited, and shore leave should be
granted to crew members, irrespective of the ship’s ag State. Since 2019, ships and ports have
had to exchange FAL data electronically and are encouraged to use a “single window”, in which
all the many agencies and authorities exchange data via a single point of contact. Following the
expected adoption of further amendments in 2022, and their subsequent entry into force, the single
window could become obligatory from January 2024.
The IMO Compendium on Facilitation and Electronic Business
21
This is an important IMO instrument for accelerating digitalization and connectivity in the maritime industry.
It facilitates the exchange of information ship to shore and enables interoperable single windows – reducing
port formalities by harmonizing the data elements required and standardizing electronic messages. Its
key components are the IMO Data Set and the IMO Reference Data Model which provide common
semantics and representation of the data needed to full ship reporting requirements. The IMO data
elements are mapped across the main models (e.g., UN/CEFACT, WCO Data Model and ISO) ensuring full
interoperability between standards for ship clearance. Since 2019, the Compendium has been extended
beyond FAL forms and is now connected to several IMO instruments, such as MARPOL for advance
notication of waste delivery to port reception facilities. From 2020, the Compendium also included the
Maritime Declaration of Health (MDH), a requirement of the WHO International Health Regulations.
IMO Guidelines for setting up a maritime single window
The IMO has developed guidelines for setting up a maritime single window (MSW).
22
These offer information,
advice and guidance along with examples of the experience and knowledge gained by some member
States in introducing an MSW. Single windows, mainly for cargo, are currently being developed under
various technical assistance projects in developing countries, including in cooperation with ASYCUDA.
23
MSW and port community systems can smooth formalities, (e.g., data elements included in the crew list,
the passenger list and the maritime declaration of health).
24
D. THE WAY FORWARD
Despite important international support, seafarers are still facing serious problems as a result of the
COVID-19 pandemic. This requires urgent action in a number of important areas.
• Vaccination – Concerted collaborative efforts by industry, governments and international
organizations should ensure that seafarers are designated as key workers and are vaccinated as a
matter of priority.
• Crew changes – Governments and industry should continue to work together, including through
the Neptune Declaration initiative, and in collaboration with relevant international organizations, to
facilitate crew changes, in accordance with international standards and in line with public health
considerations. They should also ensure the availability and access to related seafarer data.
• Route deviations – Charterers and other industry stakeholders should be exible in accepting
requests from shipping companies for route deviation to facilitate crew changes and should refrain
from using “no crew change” clauses in charterparties.
19
https://www.imo.org/fr/MediaCentre/MeetingSummaries/Pages/FAL-35th-Session.aspx.
20
https://www.imo.org/fr/MediaCentre/MeetingSummaries/Pages/FAL-40th-session.aspx.
21
https://www.imo.org/en/OurWork/Facilitation/Pages/IMOCompendium.aspx.
22
https://wwwcdn.imo.org/localresources/en/OurWork/Facilitation/Facilitation/FAL.5-CIRC.42-REV.1.pdf.
23
https://asycuda.org/en/. Also see Chapter 6, part on trade facilitation.
24
For further information on Single Windows, see Chapter 5 of the Review of Maritime Transport 2021. Also see Premti A.,
Asariotis R., 2021.
REVIEW OF MARITIME TRANSPORT 2021
120
• International legal framework – States and other relevant stakeholders should, in consultations and
meetings on seafarers’ issues at ILO and IMO, keep under review the relevant legal framework and
ensure that international obligations are respected and implemented.
• Maritime single windows – Port community systems should implement the Single Window concept,
similarly to the customs-centric Single Window powered by ASYCUDA, to cover all the information
and formalities resulting from FAL and other relevant instruments.
• Information exchange – Relevant public and private sector stakeholders should continue their regular
exchange of views and best practices on seafarers’ situation and needs, and lessons learned,
including from the COVID-19 pandemic, and promote further harmonization and standardization.
• Outbreaks and emergencies at sea – In line with developing scientic insights, governments,
international organizations and all stakeholders should regularly update specic guidance
on measures to prevent and deal with COVID-19 and other outbreaks at sea and ensure that
mechanisms are in place to reduce, and respond to medical emergencies at sea.
Public and private stakeholders must continue to work together to implement relevant labour standards
and address health, safety, security, welfare, and other challenges faced by seafarers. All should be
working to protect seafarers’ human rights and advance the objectives of SDG 8 of decent work and
economic growth for sustainable development.
5. The COVID-19 seafarer crisis
121
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6
This chapter summarizes important recent international
legal and regulatory developments. It also covers maritime
trade and transport facilitation issues, particularly those
related to COVID-19 which has created many problems
for clearing goods through ports, but also created
opportunities for new and smart solutions.
Many of the latest innovations in maritime transport involve
online and automated systems that raise concerns about
cybersecurity. However, shipowners and operators can
also take advantage of recently adopted guidelines on how
to maintain cybersecurity in their companies and onboard
ships, taking into account the requirements of IMO, and other
relevant guidelines.
The COVID-19 pandemic has highlighted many systemic
weaknesses, including delays in documentation and related
problems, which could provide an impetus for the more
widespread use of secure electronic solutions that are
already available and accepted by the market. Related work
at UN bodies, including the United Nations Commission on
International Trade Law (UNCITRAL), is also underway, to
explore the possibility of developing a negotiable transport
document or electronic record.
In addition, the industry is conducting trials on maritime
autonomous surface ships (MASS). In May 2021, the IMO
Maritime Safety Committee (MSC) completed a regulatory
scoping exercise. A number of high-priority issues, cutting
across several legal instruments, remain to be addressed at a
policy level to determine future work.
In June 2021, the IMO adopted amendments to Annex
VI of the MARPOL Convention aimed at reducing carbon
intensity of ships and including targets for energy efciency,
to further reduce GHG emissions from shipping. The industry
is also planning an International Maritime Research and
Development Board, a non-governmental body funded by a
$2-per-ton-levy on shipping fuel. Other important regulatory
developments relate to the ship-source pollution control and
environmental protection measures, including shipping and
climate change mitigation and adaptation; air pollution, in
particular sulphur emissions; oil pollution from ships; ballast
water management; and biofouling.
Finally, the chapter addresses maritime trade and transport
facilitation. This includes the Trade Facilitation Agreement of
the World Trade Organization and recent amendments to the
FAL Convention related to digitalization, concluding with a
section on UNCTAD’s ASYHUB Maritime system.
Legal and regulatory
developments and
the facilitation of
maritime trade
Legal and regulatory
developments and the
facilitation of maritime trade
IMO Member States agree on new mandatory
regulations to further reduce GHG emissions from
international shipping
Building resilient and efcient logistic supply chains requires
public-private dialogue. Cooperation from businesses involved
in maritime trade and port operations through National Trade
Facilitation Committees foster successful trade reforms
Multilateral Agreements such as the WTO TFA and the
IMO FAL Convention provide solid international standards
to build automated systems while ensuring interconnectivity
and interoperability
Digitalization and automation of trade procedures such
as Maritime Single Windows are catalysts for more
efcient and paperless compliance processes at ports
Climate-change adaptation and resilience-building for
seaports is becoming an increasingly urgent challenge,
especially for vulnerable developing countries that are
at high and growing risk of climate change impacts
With increasing automation and digitalization, there is a
growing need to effectively protect shipping assets and
technology from cyber threats
Development of maritime autonomous surface ships
(MASS) technology and trials, as well as related regulatory
responses, are advancing
127
6. Legal and regulatory developments and the facilitation of maritime trade
A. TECHNOLOGICAL DEVELOPMENTS IN THE MARITIME INDUSTRY
1. Ensuring maritime cybersecurity
The maritime sector is increasingly structured around online and automated systems. These are appearing
in shipping, port operations, offshore infrastructure, and digital commercial transactions. Online platforms
and information systems have many advantages but also expose the industry to new and unforeseen
threats and vulnerabilities, notably the risk of cyberattacks (British Ports Association, 2020). In response,
in recent years the IMO has adopted number of international instruments and developed tools for
assessing the cybersecurity risks and vulnerabilities of the international maritime sector and strengthening
the resilience of vital systems of shipping companies, ships and ports.
1
More recently, the industry organization BIMCO issued ‘Guidelines on Cyber Security on board
Ships – fourth version’ (BIMCO et al., 2021).
2
Taking account of IMO guidelines and the US National
Institute of Standards and Technology (NIST) framework, the guidance species, for example, that
company plans and procedures for cyber-risk management should be incorporated into existing security
and safety risk management requirements contained in the International Safety Management Code (ISM)
Code and International Ship and Port Facility Security (ISPS) Code.
According to the BIMCO guidelines, enterprises should:
• Identify cybersecurity threats – to the ship, both external and internal, including those posed by
inappropriate use, and poor cybersecurity practices.
• Identify vulnerabilities of assets within the company – and develop inventories of onboard systems
with direct and indirect communications links. Everyone concerned should understand the
consequences of cybersecurity threats and the capabilities and limitations of existing protection
measures.
• Assess risk exposure, and vulnerabilities – and the potential for such vulnerabilities being exploited.
• Develop protection and detection measures – to reduce the likelihood of vulnerabilities being
exploited and the potential impact.
• Establish response plans – including contingency plans to respond to cyber-risks, and tackle the
effects of potential attacks on ship safety and security.
• Respond and recover – from any cyber security incidents using the contingency plan, then report on
the effectiveness of the response plan, update it, and reassess threats and vulnerabilities (BIMCO
et al., 2021).
The maritime industry is increasingly taking action against these threats, but much remains to be done.
Maintaining effective cybersecurity is not easy. It requires collaborative, top-down approaches that
engage senior management, combined with bottom-up approaches working with other staff to identify
vulnerabilities and risks unique to each operational environment – all the while balancing and managing
such risks within acceptable limits.
Implementing cybersecurity helps to protect shipping assets and technology from cyber-threats and
makes economic sense. But inaction could also result in consequences. Shipowners who fail to comply
with the IMO requirements risk having their ships detained by port control authorities – though enforcement
should be uniform and equitable.
Failure to address cybersecurity may also result in potential contractual liability. Cyberattacks can cause
damage, loss or misappropriation of cargos, with implications for liability in the context of contracts for
the carriage of goods by sea. Arguably, a shipowner’s obligation to exercise due diligence, and provide
a seaworthy vessel before and at the beginning of the voyage (see Art. III, r. 1 and IV, r. 1, Hague-Visby
Rules
3
), may also include an obligation to conduct regular cybersecurity risk assessments, and address
1
For further information, and an overview of IMO, ISO, EU, US and industry cybersecurity guidance, see UNCTAD, 2020a,
chapter 5. See also IMO, 2021a.
2
Other available guidelines include the Digital Container Shipping Association’s Implementation Guide for Cyber Security
on Vessels v1.0 (DCSA, 2020), based on version 3 of the industry guidelines (BIMCO et al., 2018), and the US NIST
framework (NIST, 2018). While their target audience is the container industry, other segments of shipping may also nd
them useful. In addition, the International Association for Classication Societies (IACS) has issued a recommendation
(IACS 2020), which applies to newbuild ships only, but can also serve as guidance for existing ships.
3
https://www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968/portrait.pdf.
Legal and regulatory
developments and the
facilitation of maritime trade
IMO Member States agree on new mandatory
regulations to further reduce GHG emissions from
international shipping
Building resilient and efcient logistic supply chains requires
public-private dialogue. Cooperation from businesses involved
in maritime trade and port operations through National Trade
Facilitation Committees foster successful trade reforms
Multilateral Agreements such as the WTO TFA and the
IMO FAL Convention provide solid international standards
to build automated systems while ensuring interconnectivity
and interoperability
Digitalization and automation of trade procedures such
as Maritime Single Windows are catalysts for more
efcient and paperless compliance processes at ports
Climate-change adaptation and resilience-building for
seaports is becoming an increasingly urgent challenge,
especially for vulnerable developing countries that are
at high and growing risk of climate change impacts
With increasing automation and digitalization, there is a
growing need to effectively protect shipping assets and
technology from cyber threats
Development of maritime autonomous surface ships
(MASS) technology and trials, as well as related regulatory
responses, are advancing
REVIEW OF MARITIME TRANSPORT 2021
128
risks and reduce vulnerabilities through safety management systems, in accordance with IMO and industry
guidance.
For ports, BIMCO and other maritime NGOs have invited public and private stakeholders to help create
global digital ISO standards to facilitate the digital exchange of data, particularly in light of the new urgency
brought about by the COVID-19 pandemic and increasing demand (BIMCO, 2021).
2. Maritime autonomous surface ships
The use of maritime autonomous surface ships (MASS) could increase safety and improve environmental
performance, and accelerate decarbonization. Various countries are moving ahead fast with this
technology and currently have MASS commercial projects at the stage of advanced testing and trialling
(Gard, 2020; Yara, 2020).
To enable the safe, secure, and environmentally sound operation of MASS within the existing IMO
instruments, the IMO has been considering amending its regulatory framework (IMO, 2017, para. 20.2).
These issues are also being considered by the academic community, industry, and governments. In 2017
the IMO Maritime Safety Committee (MSC), embarked on a regulatory scoping exercise which it completed
in May 2021. This should also help progress related discussions in other IMO Committees namely LEG,
MEPC and FAL (see also UNCTAD, 2019).
For each provision under its purview the MSC considered whether MASS could be regulated by either:
equivalences as provided by the instruments or developing interpretations; and/or amending existing
instruments; and/or developing a new instrument; or none of the above.
4
The committee highlighted high-priority issues that cut across several instruments. An immediate concern
is terminology – including the denition of a MASS and clarifying terms such as “master”, “crew” and
“responsible person” which should be agreed internationally in cooperation with the ISO. The MSC has
also considered the function and operations of the remote-control station or centre, and the possible
designation of a remote operator as a ‘seafarer’. The committee has identied other issues across several
safety treaties related to: manual operations and alarms on the bridge; actions by personnel, such as
reghting, cargo stowage and securing and maintenance; watchkeeping; search and rescue; and the
information required to be on board for safe operation.
The MSC noted that the best way to address these gaps and themes would be to proceed in a holistic
manner. This should result in a MASS instrument/Code whose goals, functional requirements, and
corresponding regulations, are suitable for all four degrees of autonomy. For further work it will be important
to establish a joint MSC/LEG/FAL working group, but in the meantime these committees can liaise on
common issues and align any future work (IMO, 2021b).
In July 2021, the IMO Legal Committee completed its scoping exercise, concluding that MASS could be
accommodated within the existing LEG conventions without the need for major adjustments or a new
instrument. Some conventions can accommodate MASS as drafted, though others may require additional
interpretations or amendments (IMO, 2021c).
B. REGULATORY DEVELOPMENTS RELATING TO INTERNATIONAL
SHIPPING, CLIMATE CHANGE AND OTHER ENVIRONMENTAL ISSUES
1. IMO action on greenhouse gas emissions
In April 2018 the IMO adopted its initial strategy on reducing greenhouse gas (GHG) emissions from ships
(see IMO, 2018, annex 1; UNCTAD, 2019). This envisages emissions peaking as soon as possible and
by 2050 falling to at least 50 per cent below the 2008 level, with the aim of being phased out entirely.
By 2030 the target is to reduce the carbon intensity of international shipping by at least 40 per cent of
the 2008 level (IMO, 2020a).
In June 2021, in line with the IMO initial strategy, the MEPC adopted new mandatory regulations as
amendments to Annex VI of the MARPOL Convention. These build on earlier efciency requirements and
aim to cut the carbon intensity of existing ships, and further reduce GHG emissions from shipping – requiring
operators to measure the energy efciency of all ships and meet specied targets.
4
The outcome of the MSC’s regulatory scoping exercise, as approved by the Committee, including the full analysis of
treaties, can be found as an annex to the report on its 103
rd
session (IMO, 2021b).
129
6. Legal and regulatory developments and the facilitation of maritime trade
For this purpose, operators can use a new Energy Efciency Existing Ship Index (EEXI), along with a new
operational carbon intensity indicator (CII) – a dual-track approach that will enable them to address both
technical and operational measures. The EEXI measures the energy efciency of the ship compared to a
baseline and should be calculated for ships of 400 GT and above, in accordance with values set for ship
types and size categories. Ships are required to reduce the EEXI by a specied percentage of the baseline.
Ships of 5,000 GT are already required to collect data on fuel oil consumption. Now they must also bring
their operational carbon intensity within a specic level, document and verify their CII against the required
value, and record this in the Ship Energy Efciency Management Plan (SEEMP). This should result in
a performance rating of A, B, C, D or E – corresponding to major superior, minor superior, moderate,
minor inferior, or inferior. A ship rated D for three consecutive years, or E, would have to submit a plan for
corrective action, to show how the required rating (C or above) would be achieved. Administrations, port
authorities and other stakeholders are encouraged to provide incentives to ships rated A or B.
These amendments are expected to enter into force on 1 November 2022, with the requirements for
EEXI and CII certication coming into effect from 1 January 2023. This will allow the rst annual reporting
on carbon intensity to be completed in 2023, with the rst rating given in 2024. For its part, the IMO is
to review the effectiveness of the implementation by 1 January 2026 and, if necessary, adopt further
amendments. To support the implementation, the MEPC has also adopted related guidelines.
The GHG reduction candidate measures considered at IMO need to undergo an initial assessment of their
impact on States, based on the procedure adopted in 2019 (MEPC.1/Circ.885). The procedure also states
that proposed measures, including the latest measures adopted, need to undergo a comprehensive impact
assessment before adoption if required by the Committee. To support this process, UNCTAD has been
collaborating with the IMO on an expert review of the impact assessments submitted to ISWG-GHG 7, as
well as the nal comprehensive impact assessment of the short-term combined measures submitted to
the 76
th
session of MEPC (UNCTAD, 2021a; see also chapters 2 and 4 for a discussion of the outcomes).
The 75
th
and 76
th
sessions of the MEPC also discussed an industry-led proposal for a non-governmental
International Maritime Research and Development Board (IMRB), funded by a mandatory $2 per-tonne
levy on ship fuel. The MEPC also considered mid- and long-term measures, including market-based
measures, and a work plan for further cutting GHG emissions from shipping, in line with the initial IMO
strategy (IMO, 2021d). Further consideration of the proposals should take place during ISWG-GHG 10 in
October 2021.
2. Adapting transport infrastructure to the impacts of climate change
In August 2021, less than three months before COP26 in Glasgow in November 2021, the
Intergovernmental Panel on Climate Change issued its 6
th
Assessment Report (AR6) (IPCC, 2021). This
was the rst comprehensive review of the science of climate change since 2013 and gave clear warnings
of increasingly extreme heatwaves, droughts, and ooding that could have devastating consequences,
making effective adaptation action a matter of increasing urgency. AR6 projects that, depending on
scenario, the mean global temperature increase of 1.5°C relative to pre-industrial times is likely to be
reached by 2040; and if emissions are not slashed in the next few years this threshold may be reached
even earlier. Nevertheless, these impacts can be avoided if the world acts quickly with essential measures
for adaptation and mitigation (IPCC 2018; IPCC 2019; IPCC 2021).
Adaptation will be particularly important for seaports. Ports are exposed to various climate hazards,
including heat waves, extreme winds and precipitation, as well as a rise in mean sea level and associated
extreme sea-levels (IPCC, 2019). This consideration, which is of particular importance from the
perspective of developing countries, was highlighted again in October 2020, at the eighth session of the
UNCTAD Multi-year Expert Meeting on Transport, Trade Logistics and Trade Facilitation which focused on
“Climate change adaptation for seaports in support of the 2030 Agenda for Sustainable Development”
(UNCTAD, 2020c) (UNCTAD, 2020d). Effective adaptation will need to be underpinned by strong legal and
regulatory frameworks, along with strategies, policies and plans to reduce vulnerability. For this purpose,
stakeholders will need the appropriate standards, guidance and tools.
One of the outcomes of COP22 was the Marrakech Partnership for Global Climate Action
5
, which is
designed to provide a strong foundation for how the UNFCCC process will catalyse and support climate
action. This has produced the ‘Climate Action Pathway for Transport’ which includes recommendations
for ‘Resilient transport systems, infrastructure and vehicles’, with milestones towards 2050 (for 2025, 2030
5
See https://unfccc.int/climate-action/marrakech-partnership/reporting-and-tracking/climate_action_pathways.
REVIEW OF MARITIME TRANSPORT 2021
130
and 2040) (UNFCCC, 2021a and 2021b). By 2025, all new transport infrastructure, systems and, where
necessary vehicles, should be climate-resilient to at least 2050; by 2030, that should extend to all
critical transport infrastructure and systems. By 2040, all critical infrastructure and systems should be
climate-resilient to at least 2100 (UNFCCC, 2021b).
Translating this timely ambition into action will require a major acceleration of efforts. For its part, in 2021
the EU issued its Climate Change Adaptation Strategy, which aims for a climate-resilient EU by 2050 – “by
making adaptation smarter, more systemic, swifter, and by stepping up international action” (European
Commission, 2021). The EU has also adopted a new Climate Law, which entered into force on 29 July 2021
(European Union, 2021). This aims for EU climate neutrality by 2050 and by 2030 to reduce domestic net
greenhouse gas emissions by at least 55 per cent of their 1990 levels. In addition, the new law envisages
“continuous progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability
to climate change in accordance with Article 7 of the Paris Agreement” and related stocktaking, starting
in 2023.
Guidance for action has also been produced by the World Association for Waterborne Transport
Infrastructure (PIANC). In 2020 PIANC issued a revised version of ‘Climate Change Adaptation Planning
for Ports and Inland Waterways’ (PIANC 2020). This covers priority actions such as: inspection and
maintenance; monitoring systems and effective data management; and risk assessments, contingency
plans and warning systems. It also focuses on exible and adaptive infrastructure, systems and operations
and better resilience through engineered redundancy.
Also worth noting is the new ISO standard ISO 14091:2021 – Adaptation to climate change-Guidelines
on vulnerability, impacts and risk assessment (ISO, 2021). This covers vulnerability to climate change,
and highlights the importance of risk assessments and of monitoring and evaluating for any organization,
regardless of size, type, or nature.
In 2020 during the COVID-19 pandemic, there was a signicant fall in investment in transport
infrastructure.
6
However, major scaling up of investment and capacity building for developing countries
will be critical to ‘building back better’ after the pandemic. The OECD estimates that meeting the SDGs
by 2030 will require $6.9 trillion in infrastructure investment annually, (OECD, 2017). At a recent UNCTAD
dialogue, SIDS representatives highlighted the urgent need for better availability/access to green and
blue infrastructure nancing (UNCTAD, 2021b and c). This could bring enormous economic benets: the
World Bank estimates that investing in resilient infrastructure in developing countries could bring returns
of $4.2 trillion over the lifetime of new infrastructure – a $4 benet for each dollar invested (Hallegatte S.
et al., 2019).
3. Protecting the marine environment and biodiversity
Recent regulatory actions for the protection of the marine environment and conservation and the
sustainable use of marine biodiversity,
7
include the following:
a) Implementing the IMO 2020 sulphur limit
Limiting SOx emissions from ships is important to improve air quality and protect both human health
and the environment. On 1 January 2020 an IMO regulation entered into force that reduces the limit
on the sulphur content in ship fuel oil from 3.5 to 0.5 per cent. In designated emission control areas,
the limit remained even lower, at 0.1 per cent.
8
To further support enforcement, in December 2020, the
MEPC adopted several amendments to MARPOL Annex VI, which will enter into force on 1 April 2022.
These mainly relate to denitions and onboard sampling of the sulphur content of fuel oil, fuel verication
6
According to UNCTAD, investment in transport infrastructure, power generation/distribution (except renewables) and
telecommunications was down 60 per cent compared to 2019, https://unctad.org/programme/covid-19-response/
impact-on-trade-and-development-2021#aTransport.
7
As regards negotiations on a new international legal instrument under the UNCLOS on the Conservation and Sustainable
Use of Marine Biological Diversity of Areas beyond National Jurisdiction, discussions on a broad range of issues, including
marine genetic resources; area-based management tools, including marine protected areas; environmental impact
assessments; and capacity-building and marine technology transfer, were expected to continue during the fourth session
of the Intergovernmental conference on an international legally binding instrument, scheduled to be held from 23 March
to 3 April 2020, but were postponed due to COVID-19 crisis (for information on discussions at earlier sessions, see
UNCTAD, 2019, 2020a). The next session of the conference was scheduled to take place from 16 to 27 August 2021, but
due to the COVID-19 situation, it was again postponed to the earliest possible available date in 2022, preferrably during
the rst half of the year (see A/75/L.96).
8
The four emission control areas are: the Baltic Sea area; the North Sea area; the North American area (covering designated
coastal areas of Canada and the United States); and the United States Caribbean Sea area (around Puerto Rico and the
United States Virgin Islands).
131
6. Legal and regulatory developments and the facilitation of maritime trade
procedures, and consequent related amendments to the International Air Pollution Prevention (IAPP)
certicate.
From 1 January 2020, Flag and Port State controls have had to make sure that ships comply with the
0.5 per cent sulphur limit. To do so, shipowners and charterers can adopt three different approaches:
a) Use a compliant fuel which is low enough in sulphur such as VLSFO or MGO;
b) Use alternative fuels such as liqueed natural gas (LNG), methanol, liqueed petroleum gas (LPG),
hydrogen fuel cells, or biofuels which emit very small amounts of SOx; or
c) Use equivalent methods, including tting or retro-tting their ships with exhaust gas cleaning
systems, also known as scrubbers. Scrubbers may be open loop –discharging wash water into the
sea – or closed loop discharge residues to adequate reception facilities ashore.
During 2020 and the rst half of 2021, implementation, primarily with the use of VLSFO, was relatively
smooth, and compliant fuel oil was widely available globally (IMO, 2021e). There was some disruption by
COVID-19, and several more ports and countries banned open-loop scrubber wash water discharge.
Global enforcement of the new regulation was facilitated, however, by a ban on the carriage of
non-compliant fuel.
Liability for compliance mainly rests with shipowners – who typically supply the fuel. In the case of
charterparties, usually voyage charters, the contract may require the shipowner to warrant that the
vessel complies with international rules and regulations. For time charters, on the other hand, it is
the charterers who usually purchase and provide the fuel; therefore contractual provisions may shift
responsibility for compliance with applicable Sulphur Content Requirements to the charterers, so
the liability and the associated risk is divided between them and the shipowners, who warrant that
the vessel itself is compliant. Examples of relevant clauses include the BIMCO’s Marine Fuel Sulphur
Content Clause for Time Charter Parties (BIMCO, 2018), and INTERTANKO’s Bunker Compliance Clause
(INTERTANKO, 2018). In order to increase clarity, contracting parties should consider incorporating such
clauses in charterparties.
Further special regulation has been agreed for the environmental protection of Arctic waters. In June 2021,
the MEPC adopted amendments to MARPOL Annex I that prohibit the use, and carriage for use of heavy
fuel oil by ships in Arctic waters on and after 1 July 2024. Ships that meet certain standards on oil fuel tank
protection would need to comply on and after 1 July 2029.
However, up to 1 July 2029 a Party with a coastline bordering Arctic waters may temporarily waive the
requirements for ships ying its ag and operating in waters that are subject to that Party's sovereignty or
jurisdiction. After that date, exemptions and waivers would no longer apply. Currently, MARPOL Annex I
regulation 43 prohibits the use or carriage of heavy-grade oils on ships in the Antarctic; and under the
Polar Code
9
ships are encouraged not to use or carry such oil in the Arctic. The new regulation will help
protect these fragile areas further. However, its impact could be signicantly reduced by the waivers and
exemptions for contracting States with a coastline bordering Arctic waters, until 2029.
b) Ballast water management
One of the greatest threats to the world’s oceans and a major threat to biodiversity is ships discharging
untreated ballast water. This has severe consequences for public health and has environmental and economic
implications for sheries and the exploration of marine genetic resources (see also UNCTAD 2011, 2015b).
In December 2020. the MEPC adopted amendments to the International Convention for the Control and
Management of Ships' Ballast Water and Sediments, 2004 (the BWM Convention) which aims to prevent
the introduction and proliferation of non-native species following the discharge of untreated ballast water
from ships. These amendments, which are expected to enter into force on 1 June 2022, relate to the
commissioning and testing of ballast water management systems and to the form of the International
Ballast Water Management Certicate. As of 31 July 2021, the BWM Convention had 86 Contracting
States representing 91 per cent of the GT of the world’s merchant eet.
10
c) Biofouling
A prominent, but underestimated, source of microplastic pollution is antifouling coatings on ships (Dibke C.
et al., 2021). In June 2021, the MEPC adopted amendments to the IMO Convention for the Control
9
For more information, see UNCTAD, 2015a.
10
https://wwwcdn.imo.org/localresources/en/About/Conventions/StatusOfConventions/StatusOfTreaties.pdf.
REVIEW OF MARITIME TRANSPORT 2021
132
of Harmful Anti-fouling Systems on Ships, 2001 (AFS Convention)
11
, to prohibit anti-fouling systems
containing cybutryne. This would apply from 1 January 2023 or, for ships already using such a system, at
its next scheduled renewal after 1 January 2023, but no later than 60 months following the last application
to the ship of such an anti-fouling system.
12
d) Oil-pollution from shipping
An important risk of pollution is oil spills from ships, not just from oil tankers, but also from other maritime
transport – container ships, chemical carriers, general cargo ships and passenger or cruise vessels. Oil
spills, and the resultant clean-up operations, can seriously affect marine and coastal environments, from
both physical smothering and the effects of toxins. There are also costly and wide-ranging economic
implications (Asariotis R., Premti A., 2020). The risks are particularly high for vulnerable coastal developing
states and ocean economies such as SIDS that rely heavily on sheries, aquaculture and tourism, and are
being heightened by bigger vessels carrying high volumes of bunker fuel oil.
The ‘Wakashio’ bunker oil spill off the coast of Mauritius in 2020 demonstrated the devastating
consequences of oil spills for the economies and tourism industries of coastal countries, as well as for
ecosystems and biodiversity, further endangering corals, sh, and other marine life (IPCC 2018). This spill
also highlighted the need for international legal instruments in this eld and for all States to adopt the latest
of these.
Oil spills raise serious issues of liability and of compensation, including for the costs of reinstating the
environment. In this respect there is a comprehensive international regime in place on liability and
compensation for oil pollution damage caused by persistent oil spills from tankers (CLC-IOPC Fund regime)
(UNCTAD, 2012).
13
Unfortunately, this did not apply in the Wakashio case, as the spill was of bunker oil
from a bulk-carrier, not from an oil tanker (Asariotis R., Premti A., 2020; UNCTAD 2020b).
Bunker oil spills from ships other than oil tankers are covered by the International Convention on Civil
Liability for Bunker Oil Pollution Damage, 2001 (Bunkers Convention).
14
This Convention aims “to ensure
that adequate, prompt, and effective compensation is available to persons who suffer damage caused by
spills of oil, when carried as fuel in ships' bunkers”. Modelled after the International Convention on Civil
Liability for Oil Pollution Damage, 1992 (CLC), the Bunkers Convention has many similar provisions but
the amount of liability may be limited (Art. 6), in accordance with any applicable national or international
regime such as the Convention on Limitation of Liability for Maritime Claims (LLMC), 1976, as amended
in 1996. As a result, the compensation available to claimants is signicantly lower than that available under
the CLC-IOPC Fund regime for oil pollution from tankers.
15
Given the continuing growth in sizes of ships
of all types, the issue of liability for bunker oil spills from ships other than tankers may need to be revisited.
A Claims Manual for the Bunkers Convention
For the IOPC FUNDS, there is a Claims Manual but there is no corresponding manual for the Bunkers
Convention. During its 107
th
session in December 2020, the IMO Legal Committee supported the
development of an ‘IMO Claims Manual for the Bunkers Convention’ to guide national courts, claimants,
shipowners and insurers in their interpretation of the Convention (IOPC FUNDS, 2019). This manual would
differ from the 1992 Fund Claims Manual but should be consistent with it. The Committee agreed that, in
cooperation with protection and indemnity clubs, a more detailed proposal would be taken forward on an
intersessional basis, (IMO, 2020b, pg. 27). Then in July 2021 at its 108th session the Legal Committee
expressed its broad support for the development of dedicated and authoritative guidance for claimants
within the scope of the Convention (IMO, 2021c). Such a manual would assist claims under the Convention,
but it should also reect the needs of vulnerable coastal developing countries and SIDS, particularly on the
question of limitation of liability.
11
For some background information, see Review of Maritime Transport 2020.
12
The Convention, which as of 31 July 2021, was in force for 91 Contracting States representing 95.93 per cent of the GT of
the world’s merchant eet, denes “anti-fouling systems” as “a coating, paint, surface treatment, surface or device that is
used on a ship to control or prevent attachment of unwanted organisms”. It already prohibits the use of harmful organotin
compounds in anti-fouling paints used on ships and establishes a mechanism to prevent the potential future use of
other harmful substances in anti-fouling systems. These harmful substances include the biocide chemical compound
cybutryne, for which scientic data has indicated it causes signicant adverse effects to non-target organisms and the
environment, especially to aquatic ecosystems, and therefore needs to be controlled.
13
1992 Civil Liability Convention (CLC), 1992 Fund Convention and 2003 Supplementary Fund Protocol. See further
https://www.iopcfunds.org/.
14
http://library.arcticportal.org/1616/1/6693.pdf.
15
See, https://www.imo.org/en/About/Conventions/Pages/Convention-on-Limitation-of-Liability-for-Maritime-Claims-
(LLMC).aspx.
133
6. Legal and regulatory developments and the facilitation of maritime trade
Limitation of liability under IMO conventions
In certain circumstances a shipowner may lose the statutory right to limitation of liability under some
international conventions. The IMO Legal Committee has also been discussing a unied interpretation
on the relevant test for breaking the shipowner's right to limit liability (see IMO, 2019a, 2019b). In
December 2020, the Committee established a remote intersessional group to draft such a unied
interpretation and consider the vehicle for its adoption – which would be either the Conference of States
Parties, the Assembly, or the Legal Committee. Drawing on this work, a related draft Assembly Resolution
has since been nalized by the IMO Legal Committee at its 108th session and submitted for consideration
by the Assembly at the end of the year (IMO, 2021c).
C. LEGAL AND REGULATORY IMPLICATIONS OF THE COVID-19
PANDEMIC
The COVID-19 pandemic is causing delays and unprecedented supply-chain disruptions that affect the
performance of a wide range of contractual obligations and can lead to the need for costly litigation,
involving complex jurisdictional issues in a global context. This could be on such a scale as to overwhelm
some legal and administration of justice systems, with implications for global governance and the rule
of law.
16
Avoiding this outcome will require collective and coordinated action by governments and industry. This
could involve, for example agreeing contractual extensions, showing restraint in pursuing legal rights and
claims, and resolving disputes through mediation and arbitration, as well as strengthening formal and
informal dispute resolution mechanisms and institutions. It could also involve commercial risk-allocation
through standard clauses drafted to address contractual rights and obligations in the light of the
circumstances associated with the pandemic.
As part of UN action in response to the COVID-19 pandemic, UNCTAD and the UN regional Commissions
are currently implementing a joint technical assistance project: “Transport and trade connectivity in the
age of pandemics: Contactless, seamless and collaborative UN solutions”.
17
UNCTAD is leading several of
these components, including work on the international commercial transport and trade law implications of
the pandemic, and has already published two brieng notes: one on Cargo Claims, (UNCTAD, 2021d; the
other on International Sale of Goods (UNCTAD, 2021e)). These highlight some of the complex commercial
law issues and implications to encourage discussions between the affected parties and consider
appropriate measures for future agreements.
One issue which has clearly come to the market’s attention is that of delays in documentation. This may
provide an impetus for more commercial parties to adopt secure electronic solutions that are already available
and have been accepted by the market. However, with increasing reliance on electronic interactions, they
will also have to manage any associated cyber-risks and enhance their cybersecurity systems.
Lessons learnt from the global pandemic should generally encourage carriers, insurers, and cargo interests
to take leaps forward and make the best use of technology, both to minimize disruption, and to allocate
fairly any commercial risks that arise from unforeseen events beyond the control of the contracting parties.
Trade associations can help in this respect by devising standard form terms for inclusion into commercial
contracts. In addition, governments and policymakers should consider temporary nancial support to
avoid widespread business failure and protect the essential ow of goods across all trade routes.
D. OTHER LEGAL AND REGULATORY DEVELOPMENTS AFFECTING
TRANSPORTATION
1. Combating fraudulent registration and registries
In 2019, following reports by several members on the fraudulent use of their ags, the IMO Legal
Committee, agreed on measures to prevent fraudulent ship registration and registries (UNCTAD, 2019).
The Committee supported the development of a comprehensive database of registries to be held on
the publicly available contact points module of the IMO Global Integrated Shipping Information System.
16
Note in this context also SDG 17, which focuses on partnership for the goals, and SDG 16 on peace, justice, and strong
institutions.
17
https://unctad.org/project/transport-and-trade-connectivity-age-pandemics.
REVIEW OF MARITIME TRANSPORT 2021
134
This would contain the names and contact details of national governmental bodies or authorized/delegated
entities in charge of the registration of ships, as well as other relevant information. The Committee also
approved best practices to combat fraudulent registration and registries of ships, and established an
intersessional correspondence group to consider various proposals in greater detail (IMO, 2019b). This
group, in which UNCTAD participated, has since prepared a draft Resolution on “Encouragement of
Member States and all relevant stakeholders to promote actions for the prevention and suppression of
fraudulent registration and fraudulent registries, and other fraudulent acts in the maritime sector”. This
was nalized by the IMO Legal Committee at its 108th session in July 2021 and submitted to the IMO
Assembly, for consideration in December 2021 (IMO, 2021c). The intersessional group had also proposed
future work on a corresponding IMO study, which was agreed upon by the IMO Legal Committee. It should
be noted that there is already an International Convention on the Registration of Ships, 1986,
18
which
provides some safeguards against fraudulent ship registration, and was adopted under the auspices of
UNCTAD, but it has not entered into force.
2. Multimodal transport discussions at UNCITRAL and ESCAP
Multimodal transport can be a key driver of sustainable development, by enabling existing capacities and
infrastructure to be used more effectively and promoting a better balance between transport modes across
supply-chains. However, the international legal framework is lagging behind. Despite numerous attempts,
no uniform legal regime on multimodal transport has entered into force internationally (UNCTAD, 2003).
Instead, the existing framework consists of a complex jigsaw of international conventions designed for
unimodal carriage, regional and sub-regional agreements, national laws, and standard term contracts.
This is associated with a lack of legal certainty and a need for costly evidentiary enquiries and litigation.
ESCAP – Harmonizing multimodal legal frameworks in Asia
and the Pacic
In August 2020, a ESCAP Expert Group Meeting, in which UNCTAD participated, discussed options for
harmonizing the legal framework for multimodal transport at the regional level. The Expert Group requested
a more detailed analysis of the advantages, disadvantages and specicities of each option – including
the level of commitment needed, the timelines for completion and the potential for causing additional
fragmentation or legal conicts. (ESCAP, 2020).
In March 2021 this analysis was discussed by a second Expert Group Meeting (ESCAP, 2021). Several
participants highlighted the value of a single comprehensive legal instrument, but the meeting concluded
that would be more practical to take a step-by-step approach. This included consideration of the following
possibilities:
i. Tailor-made legal solutions addressing specic modal interfaces.
ii. A single transport document that could serve as evidence of a contract.
iii. Digitalization of consignment notes.
iv. A framework agreement together with soft law solutions.
v. Solutions building on existing infrastructure networks and agreements, such as an instrument on
multimodal transport operations envisaged under the Intergovernmental Agreement on Dry Ports.
The secretariat was requested to take these elements into account and to provide relevant background
material for the next meeting.
UNCITRAL – Negotiable multimodal transport documents
In July 2019, at the 52
nd
session of UNCITRAL, the Government of China presented a proposal on
possible future work by UNCITRAL to develop a legal framework for railway consignment notes. This
noted that railway transportation had some advantages, such as shorter distances, greater speed, and
less vulnerability to weather. However, unlike ocean bills of lading which were used for maritime transport,
international railway consignment notes did not serve as documents of title and were not used for the
settlement and nancing of letters of credit. UNCITRAL considered that the proposal could be of practical
signicance for world trade, and particularly for the economic growth of developing countries. However,
given the complexity of the issues, the Commission decided, as a rst step, to request the Secretariat to
coordinate with other relevant organizations and conduct research on the legal issues related to the use
of railway or other consignment notes, (UNCITRAL, 2019, paras. 216 –217).
18
Text is available at UNCTAD’s website, https://unctad.org/topic/transport-and-trade-logistics/policy-and-legislation.
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6. Legal and regulatory developments and the facilitation of maritime trade
Expert Group meetings were held in 2019 and 2020, and in May 2020 their conclusions were presented
to the 53
rd
annual session of UNCITRAL (UNCITRAL, 2020a). The Commission recognised the value
of electronic transport documents, particularly for the new supply chain and logistics models expected
to develop following the COVID-19 disruption and requested the secretariat to start preparatory work,
in close coordination and cooperation with relevant international organizations, on a new international
instrument on multimodal negotiable transport documents that could be used for contracts not involving
carriage by sea (UNCITRAL, 2020b, para.16(e)).
In February 2021, there was a Third Expert Group Meeting on a ‘New International Instrument on Negotiable
Multimodal Transport Documents’, with the participation of international organizations, including UNCTAD,
as well as practitioners and academia. In April 2021, an open webinar on ‘International experiences with the
dematerialization of negotiable transport documents’ was held (UNCITRAL, 2021a). At its 54
th
session in
July 2021, UNCITRAL welcomed the preparatory work and conrmed its strong interest in the project. The
Commission agreed that “the primary purpose of a new international instrument should be to ensure legal
recognition of a medium neutral negotiable transport document in different modes of transport and that, for
that purpose, it was desirable to focus rst on negotiable transport documents and subsequently consider
whether other types of transport documents accepted by banks for documentary credit should also be
encompassed”. The Commission also agreed on the need for proper coordination and interface with the
liability regimes provided under existing conventions on international carriage of goods by various modes
and invited the secretariat to continue its preparatory work in close coordination with other organizations
currently working on or exploring solutions to enable the use of a negotiable transport document in the rail
plus or other multimodal context, as well as other organizations with relevant expertise, or representing
relevant industries (UNCITRAL, 2021b).
Given the broad substantive scope of the proposed future legal instrument, public and private stakeholders
both in multimodal transport and in all the different modes are encouraged to participate in any related
further work. For small traders in developing countries, a key concern will be adequate liability for cargo
loss or damage. UNCTAD will continue to participate in any related work under the auspices of UNCITRAL.
3. Status of conventions
A number of international conventions in the eld of maritime transport have been prepared or adopted
under the auspices of UNCTAD. During the current reporting period, only the status of the Hamburg
Rules changed, with one additional accession (see https://unctad.org/webyer/review-maritime-
transport-2021). For additional information, see https://unctad.org/ttl/legal. For ofcial status information,
see the United Nations Treaty Collection, available at https://treaties.un.org.
E. MARITIME TRANSPORT WITHIN THE WTO TRADE FACILITATION
AGREEMENT
Implementing trade and transport facilitation procedures efciently, and in line with international guidelines
reduces time and costs, and makes for more agile logistics supply chains. This will involve simplifying
maritime and trade procedures, and integrating new technologies in trade and transport facilitation so as
to standardize and harmonize for cross border trade in goods.
The COVID-19 crisis has highlighted the many national regulations and administrative bottlenecks involved
in the emergency supply of medical equipment, drugs – as exemplied by the ongoing vaccine supply
chain. Minimizing disruption in the logistics supply chains, including maritime transport, will mean extending
international frameworks, building more public-private partnerships, and further digitalizing trade facilitation.
Such reforms will rely on harmonized international frameworks such as the WTO TFA and the IMO FAL
Convention. These instruments, which provide governments with guidance and incentives in reforming
trade facilitation measures, are paving the way for digitalization, transparency, and rationalization of
administrative formalities. They already serve as the bases for many bilateral and regional trade facilitation
agreements, and other initiatives are emerging as complementary building blocks.
1. Implementation of the WTO TFA
The WTO Trade Facilitation Agreement aims to boost the speed and efciency of cross-border trade
procedures through 36 measures and covers four areas: transparency, fees and formalities, customs
cooperation, and transit. As of July 2021, 154 WTO members have ratied the TFA, meaning that 94 per
cent of WTO Members apply the agreement on a most-favoured-nation basis.
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136
However, the agreement is not being implemented by all members – only by 71 per cent of developing
countries and by 36 per cent of LDCs. The reality on the ground may even be less positive, as it is not sure
that countries fully comply in practice with their notied implementation schedules.
Trade facilitation makes ports and shipping more efcient. Those developing countries and LDCs that
implement the TFA tend to have a higher turnover of container ships at port. This is evident from the
UNCTAD Liner Shipping Connectivity Index, which shows that 13 per cent of the variance of the time
that container ships spend in port can be statistically explained by differences in TFA implementation
(UNCTAD, 2016).
To help developing countries and LDCs implement the agreement, the TFA provides for Special and
Differential Treatment (SDT) through which those countries can acquire the necessary capacity. To benet
from SDT, developing countries and LDCs need to dene their needs for technical assistance and capacity
building (TACB). As of July 2021, 119 developing and least developed members had notied their intention
to use the SDT provisions.
Recipients of TACB have made progress in implementing TFA commitments. For LDCs that have received
TACB support, OECD indicators and WCO-Time Released Study data reveal substantial reductions
in customs clearance times. The progress is especially evident in transparency on customs rules and
regulations, customs automation, and in the timely release and clearance of goods (OECD/WTO, 2019).
2. Measures related to maritime transport
The TFA presents the regulatory requirements for the release and clearance process of export, import and
transit operations and covers procedures linked to customs clearance and to standards and controls from
other border agencies (Bureau of Standards, Ministry of Agriculture, etc.). Article 7 of the TFA addresses
the Release and Clearance of goods, including customs operations such as pre-arrival processing,
risk management, and trade facilitation measures for authorized operators. Article 10 on Formalities
connected with Importation, Exportation and Transit, addresses the relations between border agencies
and the business community, and includes provisions for single window implementation, and the use
of international standards and of customs brokers. Finally, articles 8 and 12 cover Border Agency and
Customs Cooperation.
Some provisions are more fully implemented than others (WTO, 2021). The higher implementation rates
are those for the use of customs brokers at 87 per cent, for pre-arrival processing at 74 per cent and
electronic payments at 69 per cent but other provisions involving IT infrastructure such as the single
window are lower at 45 per cent. Only 59 per cent implement Article 8 on Border Agency Cooperation.
The value of the TFA is demonstrated by the World Bank Logistics Performance Index (LPI) which shows
that implementation of trade facilitation measures is positively correlated with logistics performance, with
the greatest benets from Article 1 on Publication, Article 6 on Fees and Charges, Article 8 on Border
Agency Cooperation and Article 10 on Formalities (UNCTAD, 2016).
3. The value of public-private dialogue
Any successful trade reform relies on cooperation between public administrations and the business
community. With trust and dialogue among stakeholders, the trade ecosystem can develop sustainably,
and public reforms can respond to the needs of the trader community. This principle is embedded in a
number of measures in the TFA – on border agency cooperation, customs cooperation, consultations,
and the opportunity for the private sector to comment before adopting a legal text.
The most important component in this context is article 23.2 on the obligation to set up in each
country a National Trade Facilitation Committee (NTFC). The NTFC should comprise public and private
stakeholders who can devise a coherent and coordinated strategy and champion and drive the trade
facilitation agenda. NTFCs may gather all border agencies, business associations, freight forwarders
associations, as well as the port authorities, agencies and private sector stakeholders working on
maritime trade. According to an UNCTAD survey, 40 per cent of the NTFC members come from the
private sector (Ugaz, 2019).
In Kenya, for example, the NTFC has set up a Technical Working Group on the Mombasa Port Charter
which includes the Kenya Port Authority. In Namibia, the NTFC comprises the Namibia Port Authority
as well as the Walvis Bay Port users’ association. This public-private dialogue proved useful for dening
policies, improving consultations, and resolving conict, and during the COVID-19 crisis has been used to
coordinate emergency guidelines for supplies coming through ports.
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6. Legal and regulatory developments and the facilitation of maritime trade
Public-private dialogue and inter-agency cooperation are often manifested in the port community system
(PCS) as prescribed in TFA Article 8 and Single Window, Article 10.4. The PCS is the electronic exchange
platform that interfaces with existing IT systems within a port environment, including all the stakeholders,
private and public. In the Port of Valencia, Spain the PSC provides for the electronic exchange of supply
chain information for B2B, B2G and G2B. Recently, these systems have started to link up internationally
with port-to-port data exchange– facilitated by the International Port Community Systems Association
Network of Trusted Networks. In addition to pre-arrival and arrival processing this enables greater
transparency in the supply chain through track and trace.
Another critical issue for public-private dialogue is the safety and well-being of workers. Ports and other
actors can for example, cooperate to improve crew changeover processes and ensure standards of
procedure and risk-management protocols at the national level so that imperatives of operational continuity
do not compromise the safety and well-being of workers. This issue has also come to the fore during the
pandemic when seafarers have suffered from blockades on ships for several months and from loss of
employment and were often in desperate conditions.
The benet of public-private cooperation has been demonstrated in the ‘landlord port’ system. In this
case, border agencies deal with regulatory policies and administer the supply chain while the private
sector oversees the handling and storage of shipments as well as the maintenance of port terminals. This
allows the government to upgrade its systems for customs clearance and other regulatory treatments of
goods while the business sector can improve hard infrastructure, thus boosting the port competitiveness.
4. Improving technology and extending digitalization
Trade facilitation is steadily being transformed by new technology. The TFA encourages smart solutions in
the clearance of goods – as with Article 1.2 on information available through the internet, Article 10.4 on
the electronic single window, or Article 7.2 on electronic payments.
The electronic single window (eSW) has revolutionized supply chains by interconnecting border agencies,
traders, and logistics providers on the same IT platform. It provides a single point of submission for trade
documents and information and allows border agencies to share documents and data electronically and
establish common procedures for processing and control.
Rwanda, for example, has built the Rwanda Electronic Single Window (ReSW) using UNCTAD’s Automated
System for Customs Data (ASYCUDA). Since its introduction in 2012, the ReSW has connected approximately
20 government agencies and now provides more than 12 single window services and applications.
Since 2020, new Partner Governmental Agencies like the Rwanda Agriculture and Livestock Inspection
and Certication Services and the National Agricultural Export Development Board have been beneting
from automated applications in the single window system. In 2014 alone, the ReSW reduced the average
clearance time from 11 to 1.5 days. In 2020, the total saving for traders on direct cost to buy forms and pay
clearing agents to manually ll the form and follow up the approval in the ministries exceeds 9 million USD.
Rwanda is landlocked, so the Rwanda Revenue Authority uses the ReSW to connect with the Port
Authorities of Mombasa (Kenya) and Dar es Salaam (Tanzania) and has established ofces in the East
Africa Community Single Customs Territory. In addition, the ReSW is interlinked with the customs systems
of Uganda and Kenya on the Northern Corridor and with the Tanzanian customs system on the Central
Corridor. Once imports are processed, an exit note is issued through the single window and information
is shared to the ports and the revenue authorities, enabling them to clear the goods. The ReSW relies
on the corridor management institutions and also the Regional Electronic Cargo Tracking System which
since 2020 has helped track and trace goods on the Northern Corridor to and from the Port of Mombasa.
Single windows can also be built for maritime systems. A maritime national single window (MNSW) can
be used to harmonize and exchange data among the relevant port agencies, providing a single point
of electronic document submission for port clearance. In Singapore, for example, the Government, in
partnership with the IMO, has recently launched a Single Window for Facilitation of Trade that is aligned
with the WTO TFA and the IMO FAL Convention recommendations on the electronic exchange of data
(see section F of this chapter).
NTFCs can facilitate communication and coordination among the different stakeholders to create
synergies and ultimately establish single points of access along the supply chain covering transport and
trade procedures.
Other IT applications designed to undertake pre-arrival processing such as ASYHUB expedite customs
clearance procedures, and minimize the time and cost of trade operations (section C of this chapter).
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Another ICT innovation, based on UNCTAD technology, is the Trade Information Portal (TIP). Governments
can use this online portal to document and publicize trade procedures for export, import and transit.
Each TIP offers step-by-step guides to trade-related procedures. The TIP, which is coordinated by the
Secretariat of the National Trade Facilitation Committee, simplies and streamlines procedures while
increasing transparency of trade information on export, import and transit requirements. In this way
countries can full their obligations in WTO TFA, article 1.2 on information availability through the internet.
Today, 29 TIPs, based on UNCTAD technology, are being implemented globally by UNCTAD and the International
Trade Centre. Results have been very positive. TIPs are most advanced in East Africa, where in Kenya, for
example, greater transparency and simplication of a total of 52 trade procedures so far have reduced the time
spent waiting in the queue, at the counter and in between steps by 110 hours, and the administrative fees for
these 52 procedures by $482, i.e., about $11 per trade procedure on average (table 6.1).
An essential element of measures to improve trade facilitation is digitalization, which is part of a paperless
environment. All trade procedures can then be carried out online, reducing time and cost for the traders and
increasing transparency and market access. These smart solutions also enable better public administration
of trade and, by minimizing the use of paper and carbon-based activities, can reduce CO2 emissions
(Duval, 2021). However, these benets will only be achieved through sustained intergovernmental and
public-private sector cooperation at all levels (box 6.1).
Kenya Trade Information Portal (52 trade procedures)
• 44 of 52 procedures have been simplied • 50 steps eliminated
1.1 on average
• 20 steps now accessible online
• 66% of all steps are now online
(baseline: 46%)
• 110 hours saved
2.5 on average
• 53,000 KES saved fees ($480 saved)
1,205 KES average reduction ($10.9)
• 66 documents eliminated
1.5 on average
Table 6.1 Key performance indicators of the Kenya Trade Information Portal
Source: Kenya Trade Information Portal, https://infotradekenya.go.ke.
Box 6.1
The Framework Agreement on Facilitation of Cross-Border Paperless Trade
in Asia and the Pacic - Maritime implications
The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacic
(ESCAP, 2021) aims to accelerate digitalization of trade in support of sustainable development. After
four years of negotiations, the Economic and Social Commission for Asia and the Pacic (ESCAP)
adopted the treaty in May 2016 and opened it to all its 53 member States.
The Agreement entered into force on 20 February 2021, following accession or ratication of Azerbaijan,
the Philippines, the Islamic Republic of Iran, Bangladesh, and China. Armenia and Cambodia have
also signed the treaty. Several other ESCAP member States are in the process of accession, in time
for the rst meeting of the Paperless Trade Council. This body will oversee the implementation of the
Agreement starting in March 2022.
Designed as an enabling rather than a prescriptive instrument, the Agreement is accessible to countries
at all levels of development. It contains general principles and other provisions to facilitate pilot testing and
implementation of paperless trade solutions suitable for each country, while promoting interoperability
across systems and public-private sector collaboration within and across borders. The Agreement
complements the WTO Trade Facilitation Agreement and supports its full digital implementation. Trade
cost reductions expected from the full implementation of cross-border paperless trade are estimated
at 10-30 per cent of existing transactions costs, depending on the current state of paperless trade
development in the participating countries (ESCAP, 2017).
This agreement will boost the digitalization of maritime transport in Asia and the Pacic, which is home
to nine of world's ten busiest ports and has the bulk of global maritime trade. It should also provide a
strong political and institutional basis to improve the interconnectivity of maritime single windows and port
community systems. It will also help digitalize maritime documents such as bills of lading, packing lists and
manifests that are used in governmental trade compliance and in processes agreed between traders and
transport and logistics service providers. As these documents are digitalized, they need to be shared and
legally recognized across both in maritime single window/port community systems and trade single window
systems, and can be shared across all paperless systems along international supply chains. Backed by
this agreement, the Paperless Trade Council can engage relevant international organizations, private sector
stakeholders and development partners to ll the capacity gaps and facilitate interoperable solutions.
Source: ESCAP.
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6. Legal and regulatory developments and the facilitation of maritime trade
F. FAL CONVENTION
The WTO TFA addresses issues in relation to the clearance of goods. The Convention on Facilitation
of International Maritime Trafc (FAL Convention), on the other hand, which is managed by the IMO,
focuses on the formalities and procedures for ships calling in ports, including those related to the arrival
and departure of seafarers. Trade facilitation initiatives are likely to involve both agreements, so careful
coordination and integration will be needed at the national level in order to ensure that regulations and
procedures are aligned.
1. Main provisions of the Convention
The FAL Convention has both compulsory and recommended provisions. Contracting governments can
thus comply to the extent they are able to. One of its most important measures concerns the number
of documents that shore authorities can require, which it limits to 12. For the rst seven of these, the
IMO has developed standardized forms, widely known as FAL forms, which include General Declaration
(FAL Form 1), and Cargo Declaration (FAL Form 2). Nevertheless authorities can also require other
documentation pertaining, for example, to the ship’s registration, measurement, safety, pollution prevention,
or safe manning. The FAL Convention also contains provisions to prevent, report on, and resolve stowaway
incidents, as well and standards and recommendations on treatment of stowaways while on board ships.
For the FAL Convention, signicant efforts have been made to promote digitalization, with new provisions
to allow for data to be submitted and shared electronically. Since 2019, public authorities in ports must set
up the electronic exchange of information, and may only use paper forms in exceptional circumstances.
To reduce duplication, the FAL Convention also recommends the single window approach, aligned with
Article 10.4 of the TFA, whereby ship reporting parties can full the requirements of the various authorities
by providing information once to a single entry point.
In 2021, the FAL Committee approved amendments to the Convention that further promote digitalization.
Once these are formally adopted, the FAL Convention will no longer refer to paper forms but to a list
of data requirements. In addition, the single window will become mandatory. These amendments are
expected to be adopted by the FAL Committee in 2022 and to enter into force in January 2024.
The FAL Committee also aims to improve the quality of data exchange between ships and ports. An
important contribution to this is the IMO Compendium on Facilitation and Electronic Business which
provides a common terminology so that shipping and ports use the same denitions and formats. The
IMO Compendium can also be used by other IMO Committees when preparing their requirements on
electronic reporting and information exchange.
Box 6.2
IMO Compendium on Facilitation and Electronic Business
The IMO Compendium on Facilitation and Electronic Business aims to harmonize the essential standards
for ship clearance and to support electronic data exchange between ships and ports. It was developed
by the IMO in partnership with ECE, WCO and ISO.
The Compendium has two critical components: the IMO Data Set (IDS) and the IMO Reference Data
Model (IRDM). The IDS provides unique identication, and a common denitions and representations/
formats for all the data elements. The IRDM denes how the data elements relate to each other – reecting
the relationships between the different areas of information.
Initially, the IMO Compendium was limited to the FAL Convention (i.e., FAL forms). This led to a
partnership agreement between ECE, WCO and ISO to develop and maintain the IRDM. To ensure full
interoperability between the most relevant standards, the data elements are mapped across the main
models – UN/CEFACT, WCO Data Model and ISO. The data exchange syntax for electronic messages,
is provided by the corresponding organizations.
Since 2019, the scope of the IMO Compendium has been extended. It now covers other IMO instruments
(e.g., MARPOL and SOLAS) and other data specications related to the ship/shore interface. Since 2020,
the IMO Compendium has included the Maritime Declaration of Health (MDH), a requirement of the
International Health Regulations (IHR) under the purview of the WHO. The IMO Compendium also
includes IMO data on stowaways as well as operational and real-time data to help optimize port calls and
decarbonize shipping. More data sets are currently being prepared by the IMO Expert Group on Data
Harmonization, a group of Member States and industry experts set up to maintain the IMO Compendium.
Data sets related to shipping certicates, ship registry and company details, ballast water reporting, and
the veried gross mass of containers are being considered for inclusion in 2022.
Source: IMO.
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In 2021, having learned from the COVID-19 pandemic, Member States are adding a new section addressing
a public health emergencies of international concern (PHEIC) to the FAL Convention. To help sustain global
supply chains during a PHEIC, contracting governments and their relevant public authorities must ensure
that ships and ports remain fully operational. And they should designate port workers and crew members
who are in their territory as key workers or equivalent, regardless of their nationalities or the ag of their ship.
National authorities are also advised not to introduce obstacles to crew movements for repatriation, crew
changes or travel. The new amendments to be adopted in 2022 also encourage governments to disseminate
information about public health matters and the protection measures expected from ship operators.
2. FAL Convention requirements for maritime single windows and port
community systems
When a ship calls at a port, the master or the shipping agent has to full regulatory and port entry
requirements – for purposes of safety, security, and environmental protection. This includes submitting
information on the ship, and its voyage, cargo, crew, and passengers. This information is used for
various clearance and port call processes – including pre-arrival, arrival, berthing, loading/unloading,
embarkation/disembarkation, clearance, and departure/unberthing.
Since 2019, the IMO has required this information to be exchanged electronically. On the ship this
could involve the master, ship agents, and shipping lines, while those involved ashore include maritime
administrations, and the authorities concerned with customs, police/law enforcement, immigration, public
health, port administration, and agriculture.
The IMO also recommends that data is submitted through a single window using software that distributes
the information to relevant stakeholders according to the system rules and user agreements. The single
window in port covers business-to-government and government-to-business exchanges.
In 2019, IMO produced guidelines for setting up a maritime single window (MSW) to help Member States
and software developers, with examples of different approaches in existing systems. (FAL.5/Circ.42/Rev.1).
Developing such systems is complex and involves multiple stakeholders based on an appropriate legal
framework for data requirements and sharing.
Other forms of eSW include national single windows (NSW) or customs or trade single windows (TSW).
Possible gateways into the various systems are port community systems (PCS). As dened by International
Port Community Systems Association (IPCSA), a PCS is a neutral and open electronic platform enabling
the intelligent and secure exchange of information between public and private stakeholders.
Since 2019, IMO has encouraged Member States that are more advanced in MSW implementation
to exchange know-how and experiences with other Member States seeking assistance. Norway, for
example, has made available the source code of a generic maritime single window system developed
as part of a project with the IMO. Its design is of particular interest to SIDS and it has been implemented
in Antigua and Barbuda. It is accessible at https://github.com/Fundator/IMO-Maritime-Single-Window.
In 2021, the IMO launched two technical cooperation initiatives. One aims to develop and implement a
maritime single window in a medium-size port based on Singapore's experience – the Single Window
for Facilitation of Trade (SWiFT). In April 2021, there was call for interest to identify the pilot country. The
second project is the ‘World Bank Group/IMO maritime single window for SIDS’ which will provide Fiji
with technical support to adopt and implement an MSW based on the source code from Norway, and the
experience of Antigua and Barbuda.
19
The amendments to the FAL Convention approved in 2021 will make the use of the single window
mandatory. Public authorities must also try to ensure that the information is submitted electronically only
once and re-used as much as possible.
During the COVID-19 pandemic, a group of global industry associations in consultative status with the IMO
representing the maritime transportation and port sectors agreed on a joint statement calling for intergovernmental
collaboration to accelerate the digitalization of maritime trade and logistics. The IMO supported the joint
statement and has encouraged collaboration between maritime supply chain industry stakeholders and
Member States and called for intergovernmental collaboration at local, national, and regional levels.
20
19
https://www.imo.org/en/MediaCentre/PressBriengs/Pages/07-IMO-maritime-data-solution-available-after-launch-in-
Antigua-and-Barbuda-.aspx.
20
https://wwwcdn.imo.org/localresources/en/MediaCentre/HotTopics/Documents/COVID%20CL%204204%20
adds/Circular%20Letter%20No.4204-Add.20%20-%20Coronavirus%20(Covid-19)%20-%20Accelerating%20
Digitalization%20Of%20Maritime%20Trade.pdf.
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6. Legal and regulatory developments and the facilitation of maritime trade
G. ASYCUDA ASYHUB CASE STUDIES
The WTO TFA and the FAL Convention recognize the importance of automating and digitalizing
customs and trade procedures – by focusing on issues such as eSW, port community systems, and
overall interconnectivity and interoperability at national levels and across borders. This section provides
examples of the practical implementation of these aspects based on experience from UNCTAD’s
ASYCUDA.
ASYCUDA is a computerized customs management system that covers most foreign trade procedures.
It handles manifests and customs declarations, accounting procedures, and transit and suspense
procedures. It also generates trade data that can be used for statistical analysis.
Many customs administrations have introduced procedures for submitting cargo information in advance,
in line with the obligations of the WTO TFA. However, this is typically submitted only 24 hours before
arrival, leaving customs administrations little time for risk assessment and processing – and potentially
increasing turnaround times for traders, logistics operators and freight forwarders.
The information pertaining to a shipment is logged many weeks in advance but this data may not be
accessible to all the organizational entities needed to grant customs clearances. ASYCUDA facilitates the
sharing of this information in advance to enable customs to clear goods upon arrival, generally plan better,
and reduce overall clearance times.
1. Digitizing Global Maritime Trade
To enhance further risk-based pre-arrival/pre-departure processing, the Digitizing Global Maritime Trade
(DGMT) project
21
focuses on enabling customs authorities to gain advance digital access to sea cargo
information (PAP/PDP) – as stipulated in WTO TFA Articles 7.1 and 7.4.
Started by UNCTAD/ASYCUDA in December 2019 in partnership with Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) and the shipping industry in the context of the German Trade Alliance
for Trade Facilitation, the DGMT project aims at:
• Increasing efciency in the international transport documentation process
• Reducing the time and costs of maritime trade for importers and exporters
• Streamlining risk management by increasing digital access by customs authorities to advance sea
cargo information during clearance processes
21
Grant Agreement #81249048 between GIZ and UNCTAD/ASYCUDA signed in October 2019.
Box 6.3
Components of the Digitizing Global Maritime Trade project
1. Development of ASYHUB Maritime, a standardized data exchange and data integration platform
between ASYCUDAWorld and international standards-compliant shipping data platforms.
The objective of component 1 is to harmonize and streamline information exchange between
international standards-compliant data platforms and customs administrations. This allows for the
efcient transfer of advanced cargo information and for existing data to be reused to complete the
entry/exit customs formalities. The ASYHUB Maritime platform is now ready for piloting.
2. Enhance the capacity of customs authorities in Sri Lanka and Cambodia to apply ASYHUB Maritime
to improve pre-arrival and pre-departure processing and risk management. This component aims
to improve their risk management systems by using new datasets and new technology solutions.
Customs authorities can then conduct risk assessments and process cargo and customs
declarations prior to the arrival of goods at the port of entry/port of exit. This will enable the release
of the cleared goods shortly after arrival.
3. Outreach to create demand and initiate upscaling to at least ve further countries during or shortly
after the successful conclusion of the rst two pilots.
The two pilot countries will share their experiences with the network and receive advice and expertise
from their peers. The ve early adopter countries can take steps towards pre-arrival and pre-departure
processing and risk management through ASYHUB Maritime and international standards-compliant
shipping data providers.
Source: UNCTAD ASYCUDA.
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This project involves the development of ASYHUB Maritime, a standardized data exchange and integration
platform. Currently, the project is in phase two of a three-phase process and is being testing in two pilot
countries. This will be followed by the creation of a virtual community of practice consisting of countries
using ASYCUDA World, to enable its potential replication or upscaling in over 90 countries.
2. ASYHUB and single window integration
ASYHUB Maritime is an open, standardized platform for data processing and data integration between
ASYCUDAWorld and other external systems. The platform is designed to be cloud-native using micro
service-centred principles. It will simplify and automate the submission of sea cargo manifest information
through a system-to-system interface, providing customs authorities with richer information that can be
used to make informed risk assessments and better decisions on which shipments to inspect. This will
reduce the administrative burden for ship data providers, increase trade facilitation, ensure a quicker
release of goods, and improve risk management, security, and revenue collection.
The ASYHUB Maritime platform enables ship data providers to re-use the existing data to complete the
entry/exit formalities and exchange advanced electronic cargo information with port authorities, customs,
and other border agencies (box 6.4). This will also ensure better interconnectivity and interoperability
between countries.
Box 6.4
Customs formalities concerning entry or exit
• Entry of goods
• Customs Cargo Manifest (at arrival)
• Arrival notication
• Presentation notication
• Temporary Storage Declaration
• Exit of goods
• Customs Cargo Manifest (at departure)
• Exit notication.
Source: UNCTAD ASYCUDA.
H. SUMMARY AND POLICY CONSIDERATIONS
Ensuring maritime cybersecurity
The maritime sector is increasingly structured around online and automated systems. Recently updated
industry guidelines offer shipowners and operators information on procedures and actions to maintain
cybersecurity in their companies and ships – adopting cyber-risk management approaches that take
account of IMO requirements and other relevant guidelines. Implementing cybersecurity not only helps
shipowners avoid having their ships detained by port State control authorities, it also makes economic
sense, and helps protect shipping assets and technology from increasing cyber-threats.
Regulating maritime autonomous surface ships
The industry is advancing rapidly with the technology for maritime autonomous surface ships (MASS)
and is now conducting trials. In May 2021, the IMO Maritime Safety Committee completed a regulatory
scoping exercise which highlighted high-priority issues that cut across several instruments and will need
policy decisions to determine future work. This could result in a MASS instrument or code, with goals,
functional requirements and corresponding regulations. Developing countries representatives and other
stakeholders are encouraged to contribute to future discussions.
Reducing greenhouse gas emissions and adapting to climate change
Mitigation and adaptation to global climate change are increasingly urgent imperatives. Resilience-building
is especially important for seaports that are exposed to sea-level rise and related extreme weather events.
The 2021 IPCC report warns of increasingly extreme heatwaves, droughts, and ooding. Nevertheless,
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6. Legal and regulatory developments and the facilitation of maritime trade
rising temperatures could be stabilized by deep cuts in emissions of GHGs in which shipping must play its
part. In June 2021, the IMO adopted mandatory regulations that aim to cut the carbon intensity of ships
and their carbon emissions. These include requirements to measure the energy efciency of all ships and
set the required attainment values. Adaptation remains a particular concern for vulnerable developing
countries, including SIDS.
Reducing pollution from shipping
In 2020 the IMO set a 0.5 per cent sulphur limit on ship fuel oils. Flag and Port State controls need to make
sure ships are compliant. During 2020 and the rst half of 2021, implementation was relatively smooth with
VLSFO as the preferred solution, and compliant fuel oil was widely available globally. Another major fuel oil
concern is the risk of oil spills which can have devastating consequences for ecosystems and biodiversity
and for the economies and tourist industries of coastal countries, which should be able to claim adequate
compensation. Unfortunately, the very comprehensive international regime on liability and compensation
for tanker oil spills (CLC-IOPC Fund regime), does not apply to bunker oil spills from other types of ship.
Given the continuing growth in the size of vessels of any type and the associated potential for signicant
bunker oil pollution, with devastating consequences for vulnerable coastal developing countries and SIDS,
the issue of liability for bunker oil spills from ships other than tankers may need to be revisited. The IMO
is developing a claims manual for the Bunker Oil Pollution Convention, 2001 which addresses liability for
bunker oil spills.
Commercial law implications of the pandemic, and the use of electronic
trade documents
The COVID-19 pandemic continues to interfere with international trade, creating inefciencies, delays
and supply-chain disruptions on an unprecedented scale. This also has implications for contractual
performance with potential legal consequences and litigation involving complex international jurisdictional
issues. Resolving these problems will require collective and coordinated action by governments and
industry. This could involve, for example agreeing contract extensions, showing restraint in pursuing rights
and legal claims, and resolving disputes through mediation and informal mechanisms. It could also involve
commercial risk allocation through standard clauses to address contractual rights and obligations in the
light of the circumstances associated with the pandemic. Recent UNCTAD reports provide analytical
guidance to commercial parties and governments on some of the key legal issues arising.
Digitalizing trade facilitation
Maritime transport can be impeded by regulatory requirements and slow clearance procedures at ports.
Trade facilitation can, however, be improved by digitalization and automation of customs and other
compliance processes, single window implementation, ensuring that formalities are increasingly paperless.
Frameworks and common standards and regulations for these systems can be based on multilateral
agreements, e.g., through the WTO TFA and the IMO FAL Convention.
Connectivity requires cooperation and coordination
New technologies and smart solutions raise questions of interconnectivity and interoperability and the
need for international standards. When digitalizing and automating their systems, developing and least
developed countries can take advantage of the experiences of other countries and follow good practices
already available, such as those of the ASYCUDA system.
National trade facilitation committees
Any successful trade reform relies on cooperation between public administrations and the business
community. For this purpose, each country should set up an NTFC comprising public and private
stakeholders at national levels who should devise a coherent and coordinated strategy and champion and
drive the trade facilitation agenda. The NTFC membership should represent all the businesses involved
in maritime trade and port operations who can work with the government authorities to make logistics
supply chains more efcient and boost national trade performance.
REVIEW OF MARITIME TRANSPORT 2021
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