WORLD SEABORNE TRADE SET FOR STEADY EXPANSION

Press Release
TAD/1851

WORLD SEABORNE TRADE SET FOR STEADY EXPANSION

GENEVA, 29 October (UNCTAD) -- Overall world seaborne trade in 1997 is expected to notch up its fastest growth rate since 1990, growing by 3.8 per cent over the previous year to reach 4.94 billion metric tons, according to the Review of Maritime Transport, 1997, issued today by the United Nations Conference on Trade and Development (UNCTAD). This year's anticipated growth marks a substantial recovery from the 2.3 per cent increase recorded in 1996. If confirmed, it will also be above the annual average of 3.7 per cent achieved during the previous decade.

As the medium-term forecast for the coming decade is for an average annual growth of 3.9 per cent in the main sectors of world seaborne trade, the overall figure for 1997 could mark the start of a period of steady expansion in the years ahead.

The annual review from UNCTAD gives trends in seaborne trade, and analyses the comparative performance of different geographic regions. It focuses, in particular, on the situation of developing countries. This year, it examines the way in which high transportation costs are impeding the development of small island developing countries, for whom UNCTAD plays a monitoring role within the United Nations system.

The review says the main reason for the 1996 figures was the shipment of growing volumes of manufactured goods in containerized form (up 4.0 per cent over 1995), together with reasonably strong demand for tanker shipments (up by 3.8 per cent). Pulling the year's figures down, however, was the poor performance of dry bulk cargo shipments, which rose by only 1.1 per cent. (This was mainly due to reduction in iron ore and grain shipments.)

The review suggested that, in 1997, these trends might be reversed. While tanker demand was expected to weaken, growing at only 2.4 per cent, dry cargo seemed set for its second strongest performance in a decade.

For the developing countries, the latest figures from UNCTAD confirm the remarkably steady share of seaborne trade they have maintained during the 1990s. Despite the fast growth until recently of much of south-east and east Asia, and the fluctuating performance of the African and Latin American economies, statistics show that over this period the developing countries have

maintained an approximate 50-51 per cent share of cargo loaded, and 26-27 per cent share of cargo unloaded. The heavy weight of the oil trade in the shipping to and from developing countries is key to this statistical stability.

The world merchant fleet continued to expand to 758.2 million deadweight tons by the end of 1996. At 3.2 per cent, the increase in the rate of tonnage was slightly higher than that of seaborne trade, resulting in marginally decreasing productivity of the world fleet.

Analysis of the regional structure of the world fleet shows a moderate increase in the share of developing countries in 1996. They expanded their fleet to 19.5 per cent of the world fleet, compared to 18.7 per cent the year before. Regional ownership patterns remain "problematic and unbalanced", the review adds. Container tonnage is concentrated in Asian developing countries, which own 14.4 per cent of the world total, or 80 per cent of the fleets of developing countries. Developing countries in Africa owned virtually no container tonnage.

In a special chapter, the 1997 issue of the review focuses on the maritime problems of small island developing States, whose development and integration into the world economy was said to be almost exclusively dependent on access to inter-island and international shipping services.

Total exports of goods of small island developing States increased at about 11.5 per cent annually for the period 1988-1994, with the fastest growth being in manufactures. The direction of exports changed over the period 1988-1994. In 1988, developed market-economy countries imported about 56 per cent of the exports of small island developing States. By 1994, that had declined to 44.5 per cent. Making up the difference were the other developing countries, whose share of exports from small island developing States jumped from 39.9 per cent in 1988 to 51.8 per cent in 1994.

Fleet statistics for the group of small island developing States are distorted by the widespread offer of open-registry facilities by some countries in this group. True ownership of tonnage remains minimal. Even though their foreign trade is nearly exclusively dependent on the availability of maritime transport services, their participation in that trade is negligible. However, a large number of vessels of less than 100 gross registered tons operate in many small island developing States, serving local markets. Almost 50 per cent of the merchant fleet is 15 years old or over, leading to higher operating costs, since repair and maintenance rapidly increase with age. Schedule delays and unreliability, as well as greater environmental risks, are associated with obsolete vessels.

Efficient maritime transport systems and port infrastructure are particularly important for small island developing States. Current handicaps

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include high distribution costs, lack of reliable shipping services, expensive transshipment charges, inadequate port facilities, weak maritime administration, and the absence of economies of scale when negotiating freight rates with shipping lines.

Restructuring trends in the international liner shipping industry are another factor affecting the transportation capabilities of many small island developing States. Over the last decade, agreements between large container operators have resulted in a concentration of services. This has created economies of scale for them, and encouraged the expansion of "hub-and-spoke" service patterns between major trading areas. For small island developing States, however, the consequence has been an increased need for transshipment port services, the acquisition of vessels with container-lifting capabilities, investment in electronic data-interchange technology, and the training of management personnel. Without the necessary investments in infrastructure and technology, the prospects of many small island developing States to trade effectively, and sustain development, will diminish.

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NOTE:For further information, please contact Isao Onuki, Transport Section, Trade Infrastructure Branch, Division for Services Infrastructure for Development and Trade Efficiency, UNCTAD, on telephone: 41 22 907 2061, fax: 41 22 907 0050, or e-mail: transport.section@unctad.org; or Carine Richard-Van Maele, Press Officer of UNCTAD, on telephone: 41 22 907 5816/28, fax: 41 22 907 0043; or e-mail: press@unctad.org.tad2733