By TIOL News Service

NEW DELHI, NOV 22, 2014: THE growth of global seaborne shipping over the past year has reflected the "stumbling" progress of the world economy, the United Nations trade and development body announced on Friday as it presented its latest report on the "volatile and gloomy" state of the shipping industry.

In its Review of Maritime Transport 2014, the UN Conference on Trade and Development (UNCTAD) warned that the rate of growth in world fleets was "lower than that observed during any of the previous 10 years" and that the prospects for the current year suggested an even lower growth rate – a trend reflecting the downturn of the largest historical shipping cycle which peaked in 2012.

In addition, noted the report, maritime shipping grew by an average of just 3.8 per cent in 2013, the equivalent of nearly 9.6 billion tons in total volumes. Much of the expansion in seaborne trade was limited to dry cargo flows such as bulk commodities, which grew by 5.6 per cent while world container port throughput grew by roughly the same amount.

Against that backdrop, UNCTAD reported that 2013 was largely marked by what it described as a "gloomy and volatile" maritime freight rates market.

"All shipping segments suffered substantially, with freight rates in dry bulk and tanker markets reaching a 10-year low in 2012 and similarly low levels in the liner market," the agency said.

"Low performance of freight rates was mainly attributable to the poor world economic development, weak or hesitant demand and persistent supply overcapacity in the global shipping market."

Maritime transport is considered to be the "backbone" of international trade and the global economy, according to UNCTAD. Around 80 per cent of global trade by volume and over 70 per cent of global trade by value are carried by sea and are handled by ports worldwide. These shares are even higher in most developing countries.

The report added that regulations to reduce emissions of toxic substances from burning fuel oil, as well as environmental and other provisions of the draft international code for ships operating in polar waters continued to be negotiated. Meanwhile, "continued progress" has been made regarding the implementation of the existing framework as well as programmes covering maritime security including measures against piracy.