The weakening outlook for trade driven by economic turmoil, conflict in Ukraine and the impact of the pandemic is set to slow down the pace of global shipping activity next year, the United Nations Conference on Trade and Development (UNCTAD) said Tuesday.
The world's largest investment banks expect global economic growth to slow further in 2023 following a year roiled by Russia's invasion of Ukraine and soaring inflation.
The slowdown is expected to impact shipping, which transports more than 80% of global trade, although tanker freight rates could stay high.
In its Review of Maritime Transport for 2022, the UNCTAD projected global maritime trade growth would moderate to 1.4% this year and stay at that level in 2023.
This compares with estimated growth of 3.2% in 2021 and an overall shipment volume of 11 billion tons, versus a 3.8% decline in 2020.
For the overall 2023-2027 period, growth is predicted at an annual average of 2.1%, a slower rate than the previous three-decade average of 3.3%, the UNCTAD said, adding that "downside risks are weighing heavily on this forecast."
"The recovery in maritime transport and logistics is now at risk from the war in Ukraine, the continued grip of the pandemic, lingering supply-chain constraints, and China’s cooling economy and zero-COVID policy, along with inflationary pressures and the cost-of-living squeeze," UNCTAD said in the report.
A surge in consumer spending in 2021 pushed container shipping markets to record levels with ports backed up around the world, which was also partly due to the effects of lockdowns.
UNCTAD said the "logjam in logistics will dissolve with the rebalancing of demand and supply forces", but added the risks of industrial action in ports and hinterland transport had increased.
UNCTAD called for investment in maritime supply chains to enable ports, shipping fleets and hinterland connections to be better prepared for future global crises, climate change and the transition to low-carbon energy.
"We need to be better prepared to cope with shocks to global value chains," UNCTAD Secretary-General Rebeca Grynspan told reporters.