Economic Outlook n° 1188 | Special Report | Transport: a two-speedworld
Maritime transport ▶Supply overhang
> 1.Maritime transport key figures Sea shipping plays a preponderant role in globalization, since 120,000 vessels flying 198 different flags carry approximately 80%of total inter- national trade. Of the 80million barrels in global daily demand for oil, 43million barrels change hands each day thanks tomaritime transport. Passenger transport,whichby defaultnecessitated oceantravel for cen- turies,nowgoesmainlyby air,withthe exceptionof cruise lines. In2008, 12.6million people traveled by ship, comparedwith 2 billion air trave- lers.
▶ GDP andworld trade annual growth, in % and volume
> 2.Maritime freight has benefited fromthe rapid growth inworld trade,butwasnegatively affectedby the economic slowdownin2012 Maritime shipping of goods has trended in line with world trade, ave- raging 5.5%annual growth over the past 20 years. But the current situa- tion ismuch less rosy. Three years after the collapse in world trade in 2008, the first half of 2012 marked the definitive halt to the brief rebound that began in2010. The deterioration in international trade for goods and services should result in approximately 4% growth in world trade. In recentmonths, freight trends for container ships, bulk car- riers and service activities have revealed the persistence of amajor sup- ply overhang in these variousmarkets. The supply chain’s ability to tai- lor its products and services to demand will therefore be essential if the internationalmaritime transport industry is to stabilize freight rates in themonths ahead.
> 3. The supply overhang is expected to remain in place until 2014 andweigh on the profitability ofmaritime operators Themaritime transport sector is threatened, especially in the develo- ped countries, bymarine fuel price trends, strict environmental policies and the unfavorable economic situation of several European shipping companies. The biggest problemmost of themface involves the glut of shipping capacity as opposed to a shortage of demand. The increase in the worldwide fleet, and therefore of shipping capacity, is expected to last at least through 2014. This situation has two consequences for ship owners, the first being reduced capacity utilization and therefore lower fixed-charge coverage, and the second being greater difficulty setting prices.
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Scrapping Delivery
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e : estimation, f :forecast Source: BIMCO, CRSL
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> 4. The paradox of a sector that is still growing but penalized by its overcapacity For 2013, themaritime transport industry outlook remains a concern in light of the still depressed economy, notably in Europe. This downturn causes traffic in themainmaritimemarkets to slow even as new ves- sel deliveries continue at a significant pace, threatening to further exa- cerbate overcapacity.▣ YL