World maritime transport lost momentum last year, expanding at a rate below the historical average. Nearly 2 percent of maritime trade was affected by tariffs escalations (September 2018 to May 2019), especially grain, containerized trade and steel products, leading to product and supplier substitution and trade diversion effects. The upsurge in soybean exports from Brazil to China displacing shipments from the US is a case in point. On the supply side, the rise of mega vessels, alliance reshuffling, and consolidation remain key features of the shipping industry. Fuel economics were also in focus as industry prepared for the entry into force on 1 January 2020 of IMO’s regulation lowering the global sulphur cap in ship bunker fuel.

Meanwhile, structural factors are silently redefining the maritime transport landscape. Moderate global economic and trade growth contrasting with the pre-2009 period is becoming the norm. Other forces at play include (i) supply chain restructuring in favour of more regionalized trade flows; (ii) greater use of technology and services in value chains and logistics; (iii) intensified natural disasters and climate-related disruptions; (iv) changes in demand patterns; and (v) accelerated environmental sustainability and energy transition agendas.

Looking forward, maritime trade is projected to grow at an average annual rate of 3.4 percent over the next five years. Nevertheless, several risks continue to cloud the horizon. Aside from a weakening in global demand, growth prospects of dry bulks – particularly relevant for AMIS – are also shaped by economic and regulatory developments in China, the mainstay of bulk trade for over a decade; potential supply-side disruptions (e.g. iron ore); the further spread of African Swine Fever (grain); and climatic factors, including those affecting maritime passages. In addition, containerized trade will remain under pressure due to continued overcapacity and weaker demand.

Supported by the United Nations Conference on Trade and Development (UNCTAD), AMIS will continue monitoring these developments to ensure a better understanding of global issues at stake and their implications for maritime transport and trade.