Shipping growth forecast is reduced due to the gloomy economy

Growth in the global shipping industry will slow in 2023 due to weakening commercial demand and soaring inflation.

The world's largest investment banks predict that global economic growth will slow in 2023 after a year plagued by inflation and political instability in Ukraine. This is expected to affect shipping, which carries more than 80% of global trade.

According to the Maritime Transport Assessment of 2022, the United Nations Conference on Trade and Development (UNCTAD), global maritime trade growth will be moderate at 1.4% this year and maintain at that level in 2023. This is lower than the estimated growth of 3.2% in 2021 and 3.8% in 2020.

UNCTAD says that for the period 2023-2027, growth is projected at an average annual rate of 2.1%, slower than the 3.3% average over the previous three decades. "However, downside risks are weighing on this forecast," the report said.

Accordingly, the recovery of maritime transport and logistics is struggling due to political instability between Russia and Ukraine, the impact of the pandemic, and prolonged supply chain constraints. At the same time, China's "Zero-Covid" policy along with inflation pressure and falling consumer costs also have negative impacts on the shipping industry.

Prior to that, an increase in user spending in 2021 pushed the container shipping market to a record level. UNCTAD said that the bottleneck in logistics will be solved through a rebalancing between supply and demand. However, the risks of industrial activity in ports and inland transport will increase.

To limit risks, in its report on Maritime Transport 2022, UNCTAD calls on carriers to invest more in the supply chain so that ports and inland shipping fleets are connected and have a Better prepared for climate change, possible global crises and tight decarbonisation targets.

"We need to be better prepared to deal with shocks to global value chains," said UNCTAD Secretary-General Rebeca Grynspan.

Phi Hung (according to Reuters)