GENEVA: Global demand for maritime
shipping picked up last year, but the pace was still below the historical 3 per
cent average and continued to lag behind supply, keeping freight rates and
earnings low in most segments, a new UNCTAD report says.
The Review of Maritime Transport 2017 says that seaborne trade
grew by 2.6 per cent in 2016, reaching 10.3 billion tonnes. Although this was a
welcome improvement to the 1.8 per cent growth recorded in 2015, the boost in
demand was offset by a 3.2 per cent increase in the industry's carrying
capacity, which reached 1.86 billion dead-weight tons earlier this year.
A supply-demand imbalance continued therefore to weigh down
industry profits, with the container shipping market, the largest in terms of
value, reporting a collective operating loss of US$3.5 billion.
"A slower demand than earlier projected, coupled with a large
influx of vessels, has led to a continued oversupply of shipping
capacity," UNCTAD Secretary-General Mukhisa Kituyi said ahead of the
report's publication.
But as world seaborne trade continues to gather steam -- forecasts
show a compound annual growth rate of 3.2 per cent between 2017 and 2022 -- the
situation could improve relatively soon, if the industry can shed its excess
weight.
This could be done, the report says, by building fewer ships, by
scrapping more, or by increasing "capacity sharing" -- essentially
the pooling of cargo among carriers to improve economies of scale and reduce
operating costs.
Yet there are risks associated with the recent mergers and mega
alliances among container carriers, the report says.
"The risk is that growing market concentration in container
shipping may lead to oligopolistic structures," says Shamika N. Sirimanne,
Director of UNCTAD's Division on Technology and Logistics.
"In many developing countries' markets, there are now only
three or even fewer suppliers left,"
Ms. Sirimanne says. "Regulators will need to monitor
developments in container shipping mergers and alliances to ensure there is
competition in the market."
Revisiting the rules governing consortiums and alliances may be
necessary, the report says, in order to balance the interests of Shippers,
Ports and Carriers.
Source: Dailyshippingtimes.com
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