Although the COVID-19 pandemic’s impact on maritime trade last year was less severe than expected, the knock-on effects
will be far reaching and could transform the sector, the UN trade and development body, UNCTAD, said in its latest
report, published on Thursday.
Maritime trade contracted by 3.8 per cent in 2020, but later rebounded, and is estimated to increase by 4.3 per cent
this year, according to the report.
UNCTAD’s Review of Maritime Transport 2021
reveals the outlook for the medium term remains positive but subject to “mounting risks and uncertainties”, such as
unprecedented pressures on global supply chains, dramatic spikes in freight rates, and price increases affecting both
consumers and importers.Vaccine roll-out critical
The agency said global socioeconomic recovery will depend on smart, resilient and sustainable maritime transport, and a
vaccination effort that sees developing countries having fairer access to doses.
“A lasting recovery will depend on the path of the pandemic and largely hinges on being able to mitigate the headwinds
and on a worldwide vaccine roll-out,” said Rebeca Grynspan, the UNCTAD
“The impacts of the COVID-19 crisis will hit small island developing States (SIDS) and least developed countries (LDCs)
the hardest,” she added.
As UN chief António Guterres has repeatedly pointed out, COVID-19 has laid bare numerous social inequalities.Existing challenges exposed
UNCTAD said the pandemic has also exposed and magnified existing challenges in the maritime transport industry,
particularly labour shortages and infrastructure needs.
The agency has called for urgent action to resolve the plight of hundreds of thousands of seafarers who remain stranded
at sea due to the pandemic, as lockdowns, border closures and a lack of international flights have affected crew
replacements and repatriations.
The report said industry, Governments and international organizations must ensure seafarers are designated as key
workers and vaccinated as a matter of priority.
The report examines factors that are driving consumer prices higher.Logistical challenges, soaring rates
The rebound in maritime trade has been marked by “pandemic-induced logistical challenges”, such as shortages of
equipment and containers, less reliable services, and congested ports. The resulting supply chain bottlenecks have
hindered economic recovery.
Challenges also exist on the supply side. Although orders for new container ships dropped by 16 per cent last year,
continuing a previous downward trend, shipping companies have increased orders for new vessels this year amid the
current capacity limitations.
Shipping lines have benefitted from soaring freight rates, the report said.
Surcharges, fees and rates temporarily rose even higher following the grounding of the Ever Given, the huge container
ship that blocked the Suez Canal this past March, disrupting global trade.
UNCTAD warned that import and consumer prices will “significantly increase” if the surge in container freight rates
continues.Monitor market behaviour
Its analysis showed that global import price levels will increase on average by 11 per cent, and up to 24 per cent for
SIDS, which primarily depend on maritime transport for imports.
If the situation continues, consumer prices could be 1.5 per cent higher in 2023. The rise is expected to be 7.5 per
cent in SIDS, and 2.2 per cent in LDCs.
UNCTAD highlighted the need to monitor market behaviour and ensure transparency when it comes to setting rates, fees and
The report also examines how the pandemic has accelerated “megatrends” that could transform maritime transport, such as
digitalization and automation, which should lead to efficiency and cost savings.Build climate resilience
The shipping industry is also coming to grips with climate adaptation and resilience, though the urgent need to
decarbonize and find alternative fuels to reduce emissions will come at a cost.
“By exposing the vulnerabilities of existing supply chains, the COVID-19 disruption has sharpened the need to build
resilience and revived the debate over globalization and the supply chains of the future,” said Shamika N. Sirimanne,
UNCTAD’s director of technology and logistics.