As the global community commits to the new Sustainable Development Goals and gears up for a new international climate policy agreement, the UNCTAD Review of Maritime Transport 2015 highlights the role of freight transport, including maritime transport, in addressing the global sustainability and resilience agenda.

With more than 80 per cent of world merchandise trade by volume being carried by sea, maritime transport remains the backbone of international trade and globalization, the report says. Equally, the sector is a key enabling factor for other sectors and economic activities.

The Review of Maritime Transport 2015 underlines that maritime transport is facing the dual challenge of climate change mitigation and adaptation. While curbing greenhouse gas emissions remains urgent to ensure manageable global warming levels, the effects of climate variability and change – irrespective of the causes – are already being felt in different parts of the world, often in the poorest countries which are less able to cope.

Seaports, acting as key nodes in international transport networks across supply chains, are particularly vulnerable to climate change due to their location in coastal and low-lying areas. They are likely to be affected directly and indirectly by climatic factors such as rising sea levels, extreme weather events and rising temperatures.

These factors will also affect port hinterland connections and transport corridors across transport networks as international trade increasingly requires the use of rail, road and waterway transport. In this context, building the climate resilience of maritime transport systems is a precondition for their long-term sustainability, the UNCTAD report says.

Scaling up finance levels and diversifying sources of finance is critical for the implementation of sustainable and resilient freight transport systems including in the maritime sector. In an era of increasingly constrained national budgets, therefore, finding innovative ways to mobilize financing is critical. New sources and mechanisms and greater private sector involvement such as through public-private partnerships are important. Climate finance could emerge as an important channel for mobilizing additional resources, including for maritime transport.

Recent changes in the legal and regulatory framework

In 2014, important regulatory developments in the field of transport and trade facilitation included the adoption of the International Code for Ships Operating in Polar Waters (Polar Code), expected to enter into force on 1 January 2017, as well as a range of regulatory developments relating to maritime and supply chain security and environmental issues.

To further strengthen the legal framework relating to ship-source ‎air pollution and the reduction of GHG emissions from international shipping, several ‎regulatory measures were adopted at the International Maritime Organization (IMO), and the Third IMO Greenhouse Gas Study 2014 was finalized. Also, guidelines for the development of the Inventory of Hazardous Materials required under ‎the ‎2010 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea – not yet in force, however – were adopted, and further progress was ‎made with respect to technical matters related to ballast water management, ship recycling, and measures helping to prevent and combat pollution of the sea from oil and other harmful substances.

Continued enhancements were made to regulatory measures in the field of maritime and supply chain security and their implementation, including the issuance of a new version of the World Customs Organization Framework of Standards to Secure and Facilitate Global Trade in June 2015, which includes ‎a new pillar 3: “Customs-to-other Government and inter-government agencies”.

Meanwhile, as regards suppression of maritime piracy and armed robbery, positive developments were noted in the waters off the coast of Somalia and the wider western Indian Ocean. Concern remains, however, about the seafarers still being held hostage. A downward trend‎ of attacks in the Gulf of Guinea was also observed, indicating that international, regional and national efforts are beginning to take effect.

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Report highlights

Maritime transport is the backbone of international trade and the global economy. 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 the case of most developing countries.

UNCTAD’s Review of Maritime Transport has since 1968 provided coverage of key developments affecting international seaborne trade, shipping, the world fleet, ports, freight markets, and transport-related regulatory and legal frameworks.

The year 2015 is a milestone for sustainable development. The international community has a unique opportunity to strengthen its commitment to sustainable development and consider how best to mainstream sustainability principles across all economic activities and sectors, including maritime transport. In this context, in addition to the review of key economic and legal developments, the present edition of the Review of Maritime Transport highlights some issues that are at the interface of maritime transport and sustainability.

Chapter 1: Seaborne trade

The world economy embarked on a slow-moving recovery led by uneven growth in developed economies and a slowdown in developing countries and economies in transition. In 2014, the world gross domestic product (GDP) increased marginally by 2.5 per cent, up from 2.4 per cent in 2013. Meanwhile, world merchandise trade increased by 2.3 per cent; this is down from 2.6 per cent in 2013 and below the pre-crisis levels.

Chapter 2: The fleet

The world fleet grew by 3.5 per cent during the 12 months to 1 January 2015, the lowest annual growth rate in over a decade. In total, at the beginning of the year, the world's commercial fleet consisted of 89,464 vessels, with a total tonnage of 1.75 billion dwt. For the first time since the peak of the shipbuilding cycle, the average age of the world fleet increased slightly during 2014. Given the delivery of fewer new buildings, combined with reduced scrapping activity, newer tonnage no longer compensated for the natural aging of the fleet.

Chapter 3: Freight costs

Developing countries, especially in Africa and Oceania, pay 40 to 70 per cent more on average for the international transport of their imports than developed countries. The main reasons for this situation are to be found in these regions' trade imbalances, pending port and trade facilitation reforms, as well as lower trade volumes and shipping connectivity. Container freight rates remained volatile throughout 2014 although with different trends on individual trade lanes. The tanker market witnessed an equally volatile freight rate environment in 2014 and early 2015. The dry bulk market freight rates faced another challenging year influenced by the surplus capacity that still exists and the uncertainties in demand projections.

Chapter 4: Ports

Developing economies' share of world container port throughput increased marginally to approximately 71.9 per cent. This continues the trend of a gradual rise in developing countries' share of world container throughput. The economic, environmental and social challenges facing ports include growing and concentrated traffic volumes brought about by ever-increasing ship size; the cost of adaptation of port and port hinterland infrastructure measures; a changing marketplace as a result of increased alliances between shipping lines; national budget constraints limiting the possibilities of public funding for transport infrastructure; volatility in energy prices, the new energy landscape and the transition to alternative fuels; the entry into force of stricter sulphur limits; increasing societal and environmental pressure; and potential changes in shipping routes from new or enlarged international passage ways.

Chapter 5: Legal and regulatory framework

The Polar Code, establishing mandatory provisions to ensure ship safety and prevent environmental pollution in both Arctic and Antarctic waters, which was adopted at IMO and will enter into force on 1 January 2017. To further strengthen the legal framework relating to ship-source air pollution and the reduction of greenhouse gas (GHG) emissions from international shipping, several regulatory measures were also adopted at IMO and the third IMO GHG Study 2014 was finalized. In addition, guidelines for the development of the Inventory of Hazardous Materials required under the 2010 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention) were adopted, and further progress was made with respect to measures helping to prevent and combat pollution of the sea from oil and other harmful substances. Continued enhancements were made to regulatory measures in the field of maritime and supply chain security and their implementation. As regards suppression of piracy and armed robbery, an issue considered in some detail in a recent two-part report on maritime piracy prepared by UNCTAD, positive developments were noted, however, concerns remain about the seafarers still being held hostage.