Archives for posts with tag: world shipping

Money, or even love if you prefer, are claimed to make the world go round. For the shipping world, however, it’s trade that sets things spinning. Those wishing to grasp the magnitude of world seaborne trade might want to consider that it is projected to close in on 11 billion tonnes in 2015. Examining the statistics in more detail sheds further light on its role in the world economy.

What’s In The Basket?

Seaborne trade is made up of a wide range of commodities. Tankers and bulkers carry a huge amount of the tonnage. This year, the 11.0 billion tonnes (bt) will include of 3.2 bt of major bulks, another 1.5 bt of minor bulks and 2.8 bt of crude oil and refined oil products. But there’s plenty of room for other cargo too. Manufactures take their place with 1.7 bt of containerised cargo (which punches further above its weight in value terms) and another 1.1 bt of other non-bulk dry cargo (some still ripe for containerization). More specialised shipping completes the set, with 0.6 bt of liquefied gas trade and chemicals trade combined. These components tell us a lot about the shipping model, and the last two SIW feature articles noted the role of China: importing industrial raw materials in bulk, and exporting manufactures on containerships.

Popular Concept

This year world seaborne trade is projected to represent 1.5 tonnes of cargo for each person on the planet, up from 1.0t in 2000. As economic growth continues in developing economies, populations typically contribute more to world seaborne trade on a per capita basis, and as they ‘catch up’ with western world levels this drives increased trade (and a higher ratio). Even if the ratio remains unchanged, the current projection of 8.4 bn people on the planet by 2030 would mean an extra 1.7 bt of seaborne trade.

Multiplier Effect

Then there’s the ‘multiplier’ effect. Over the last 5 years, for example, the growth in world seaborne trade has clocked in on average at 1.13 times more than the growth in the world economy. As globalisation has taken hold, international trade has typically grown more quickly than world economic output. Seaborne container trade, for example, has enabled the connection of distant producers and consumers, and also the component trade enabling multi-location manufacture connected by low unit cost shipping. Discovery of natural resources in locations other than economic growth centres also helps. In 2015, the world economy is expected to grow by 3.5% but world seaborne trade is expected to grow more quickly, by 4.1%.

Keep It Going Round

Since the decline in 2009, seaborne trade growth has been quite consistent, averaging about 4%. Without the huge fleet dwt growth of 55% in the period 2008-14, the market downturn might have been less severe. On Shipping Intelligence Network, monthly tables and our Seaborne Trade Monitor report provide regularly updated seaborne trade statistics. At a rough estimate, seaborne trade constitutes over 80% of the global total volume by all modes. That’s some achievement, and until the world comes up with an alternative, it will keep on making the world go around. Have a nice day.

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The car carrier sector has for some time been seen as one of the fastest growing parts of world shipping. Rapidly growing seaborne trade volumes have driven the requirement for a robustly expanding supply of vessels at the large end of the car carrier fleet. But it hasn’t always been a smooth ride, and today it’s not clear whether the sector has enough drive to remain in the fast lane.

In The Fast Lane

In the period from 1996 to 2007, seaborne trade in cars expanded from an estimated 8.1 million to 22.5 million units, growing by a compound annual growth rate (CAGR) of 9.7%. This compares very favourably to almost any other part of world seaborne trade. Overall seaborne trade registered a CAGR of 4.0% over the same period.

Fittingly for the car sector, there have been a range of drivers. New centres of car production have emerged (particularly in the developing world), broadening the global network of seaborne car transportation, in some cases extending the average haul as well as increasing trade volumes. Meanwhile, new car consumers have been generated by economic growth in developing economies, particularly in Asia. In China, for instance, European cars prove popular driving long-haul car trade. Since 1996 Asian car imports have expanded by an estimated 287% (and exports from Japan, Korea and China by 97%).

Brakes Off…And On

The PCC (Pure Car Carrier, including Pure Car & Truck Carrier) fleet has responded eagerly to the challenge. The fleet has grown from an overall capacity of 1.35m vehicles at end 1996 to 3.76m vehicles today, total expansion of 175%. Today, there are 768 car carriers in the fleet, and 569 of them have capacity of 4,000 cars or more (74% of the fleet) with another 62 on order (55 above 4,000 cars). The average vessel size has jumped from 3,380 car units at end 1996 to 6,810 today.

So far so good, until the downturn when seaborne car trade really suffered. Volumes fell by 35% in 2009 (compared to 4% for seaborne trade as a whole) as western car buyers pulled on the handbrake. Since then volume growth has not been quite so speedy. 2010 saw a partial bounceback but growth of 5-7% in 2011-13, has been followed by a projected 2% this year, on the back of relocation of production limiting export growth from key exporters, new tax legislation in importing regions, sluggish European recovery and political disruption in several emerging importer nations. This has left a question mark over when growth might get back into top gear.

The Road Ahead

Still, PCC capacity growth for the next few years looks fairly moderate with the orderbook standing at 11% of the fleet. Trade is provisionally projected to grow by 5% in 2015, making up for some of the shortfall this year. But the bigger question is whether we can expect trade growth to maintain the robust levels seen historically in the longer term. Perhaps the road ahead isn’t as clear as it once was? Each year, in our Car Carrier Trade & Transport report, we look at the trends in detail, and this year’s report will be available on Shipping Intelligence Network in the next few weeks. Have a nice day.

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