UNCTAD in its flagship “Review of Maritime Transport 2022” has called for increased investment in maritime supply chains. Ports, shipping fleets and hinterland connections need to be better prepared for future global crises, climate change and the transition to low-carbon energy.
The supply chain crisis of the last two years has shown that a mismatch between demand and supply of maritime logistics capacity leads to surges in freight rates, congestion, and critical interruptions to global value chains.
Ships carry over 80% of the goods traded globally, with the percentage even higher for most developing countries, hence the urgent need to boost resilience to shocks that disrupt supply chains, fuel inflation and affect the poorest the most.
“We need to learn from the current supply chain crisis and prepare better for future challenges and transitions. This includes enhancing intermodal infrastructure, fleet renewal and improving port performance and trade facilitation,” UNCTAD Secretary-General Rebeca Grynspan said. “And we must not delay the decarbonization of shipping,” she added.
Investment is needed in maritime transport systems to strengthen global supply chains
Logistics supply constraints combined with a surge in demand for consumer goods and e-commerce pushed container spot freight rates to five times their pre-pandemic levels in 2021, reaching a historical peak in early 2022 and sharply increasing consumer prices. The rates have dropped since mid-2022 but they remain high for oil and natural gas tanker cargo due to the ongoing energy crisis.
Dry bulk freight rates increased due to the war in Ukraine and related economic measures, as well as the prolonged COVID-19 pandemic and supply chain disruptions. An UNCTAD simulation projects that higher grain prices and dry bulk freight rates can lead to a 1.2% increase in consumer food prices, with higher increases in middle- and low-income countries.
Higher freight rates and grain prices hit countries differently
Bar chart with 2 data series.
Impact of higher dry bulk freight rates and global grain prices on consumer food prices based on a simulation covering two years, percentage change
Source: UNCTAD calculations based on data provided by Clarksons Research, Shipping Intelligence Network, the IMF, International Financial Statistics, Direction of Trade Statistics and Consumer Price Index, UNCTADstat, and the World Bank, World Integrated Trade Solution, Commodity Price Data (The Pink Sheet) and A Global Database of Inflation.
View as data table, Higher freight rates and grain prices hit countries differently
The chart has 1 X axis displaying categories.
The chart has 1 Y axis displaying Index. Data ranges from 0.2415848064 to 1.2698204.