The Hindu Business Line : Jump in sea-borne trade led by Asian demand

The Asian region’s merchandise exports grew at an impressive 18 per cent and imports by 11 per cent, according to the Unctad Review, which says global terminal operators in Asia recorded half the world’s throughput of containers.

Santanu Sanyal

At the beginning of 2007, the total world merchant fleet broke the one billion deadweight tonnes (dwt) mark for the first time, to reach 1.04 billion dwt, after expanding by an impressive 8.6 per cent, according to the Unctad Review of Maritime Transport 2007 released recently.

The Review examines the trends in sea-borne trade and analyses the comparative performance of various geographical regions and countries. It also introduces amendments to the classification of country groups. The new classification, which follows Unctad’s Handbook of Statistics, groups countries according to economic criteria that reflect more closely the current world economic situation.

Developed countries controlled 65.9 per cent of the world tonnage, with developing countries and economies in transition accounting for 31.2 per cent and 2.9 per cent respectively, the Review notes. The share of foreign-flagged vessels decreased slightly in 2006, for the first time since 1989. The 10 largest open and international ship registries accounted for 53.7 per cent of total world registries.

At the beginning of 2007, the average age of the world fleet fell marginally to 12 years. The container-ships represented the youngest fleet with an average of 9.1 years.

Fleet productivity

The operational productivity of the world fleet decreased slightly during 2006, reaching 7.1 tonnes carried per dwt from 7.4 tonnes in 2005 and 29.4 thousand tonne-miles per dwt (30.3). This reflects faster rate of fleet expansion relative to cargo carried. The world surplus tonnage in 2006 increased to 10.1 million dwt or one per cent of the world merchant fleet. The corresponding figures for 2005 were 7.1 million dwt and 0.7 per cent respectively.

In 2006, for the first time since 2001, the growth of container fleet outstripped that of containerised trade. With an increase in the fleet of almost 1.4 million TEUs, the capacity rose by 13. 5 per cent in 2006, or which was 2.5 percentage point higher than the growth of containerised trade, which reached 11 per cent the same period.

For 2007, the growth of world container carrying capacity has been estimated at 13.4 per cent, 2.4 per cent higher than the estimated growth in demand. The order book of container ships in September 2007 stood at 6.2 million TEUs, representing 60 per cent of the existing fleet.

Freight costs

According to the latest data available for 2005, global freight costs represented 5.9 per cent of the value of world imports, a jump from 5.1 per cent in 2004. The cost of transport came to 7.7 per cent of import value for developing nations, and to 7.6 per cent for countries with economies in transition. Developing countries and the economies in transition continued to bear the brunt of high transport costs.

In 2006, the Review points out, the throughput of the container handling ports increased by 13.4 per cent to reach 440 million TEUs. The developing countries handled 65 per cent of the total, up from 62.1 per cent in 2005.

International rail freight also expanded in 2006, growth in China and India being 11 per cent and 8 per cent respectively.

The growing world economy, led by mounting demand in Asia, led to an increase in sea-borne international trade to 7.4 billion tonnes in 2006 – a jump of 4.3 per cent.

Over one-third of the sea-borne merchandise trade was made up of crude oil and petroleum products. Spurred by growth in Asia, particularly in China, the total demand for shipping services increased by 5.5 per cent to reach 30,686 billion tonne-miles in 2006.

Security concerns

Security continues to be an important issue in the transportation of world trade. Recent developments in transport and supply chain security include those under the auspices of the World Customs Organisation and International Maritime Organisation (IMO). In 2007, for the first time, Unctad published data on the costs associated with compliance with International Ship and Port Facility Security Code (ISPS), which came into force in July 2004. The study estimated the port-related costs of implementing ISPS, under the auspices of the IMO, at $1.1-2.3 billion initially, and between $0.4-0.9 billion annually thereafter.

The Review identifies Asia for analysing intra-regional maritime trade since 2004 and covers the demographic background of the region, containerised trade, Asian terminal operators and P&I Clubs. It has also published a focus report on port development in Vietnam.

The region’s merchandise exports grew at an impressive 18 per cent and imports by 11 per cent. Developing economies in Asia grew an estimated 7.6 per cent in 2006, the global terminal operators headquartered in Asia have a throughput of over 220 million TEUs and half the world’s total throughput of containers. Of the world’s fleet of vessels above 100 gross tonnes, 21 per cent are registered in Asia.

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