Shipping and World Trade

Value of volume of world trade by sea

It is difficult to quantify the value of volume of world seaborne trade in monetary terms, as figures for trade estimates are traditionally in terms of tonnes or tonne-miles, and are therefore not comparable with monetary-based statistics for the value of the world economy.

However, the United Nations Conference on Trade and Development (UNCTAD) estimates that the operation of merchant ships contributes about US$380 billion in freight rates within the global economy, equivalent to about 5% of total world trade.

Shipping trade estimates are often calculated in tonne-miles, as a way of measuring the volume of trade (or "transportation work ", as it is sometimes referred). In 2007, for example, it is estimated that the industry transported over 7.7 thousand million tonnes of cargo, equivalent to a total volume of world trade by sea of over 32 thousand billion tonne-miles.

World seaborne trade 1968-2008

 
Source: Fearnley's Review

Throughout the last century the shipping industry has seen a general trend of increases in total trade volume. Increasing industrialisation and the liberalisation of national economies have fuelled free trade and a growing demand for consumer products. Advances in technology have also made shipping an increasingly efficient and swift method of transportation. Over the last four decades total seaborne trade estimates have quadrupled, from just over 8 thousand billion tonne-miles in 1968 to over 32 thousand billion tonne-miles in 2007.

As with all industrial sectors, however, shipping can be susceptible to economic downturns - a notable fall in trade occurred during the worldwide economic recession of the early 1980s and growth in seaborne trade was tempered by the Asian financial crisis of the late 1990s. However, there has generally been healthy growth in maritime trade since the early 1990s. Moreover, in the last few years virtually all sectors of the industry have benefited from the recent global shipping boom, as China and India’s economic expansion have led to record freight rates and the longest sustained period of buoyant markets within living memory.