Surging international seaborne trade will continue to outpace GDP through to 2050, presenting significant challenges for ports and supporting infrastructure

By
Carly Fields,

Global freight transport is set to more than quadruple by 2050, according to a new report from the International Transport Forum at the OECD.

Average distances for shipping will also increase, by 12%, with the North Pacific surpassing the North Atlantic as the world’s busiest trading corridor in terms of freight volume (in tonne-km) by 2050, said the ITF Transport Outlook 2015.

Said the report: “This reflects the shift of the economic centre of gravity towards Asia resulting from the greater trade between Asia and the rest of the world, especially North America, Africa and Europe.”

The ITF outlook marks out the Indian Ocean corridor for large growth, with freight volume quadrupling in this area alone. Intra-African (+715%) and intra-Asian (+403%) freight volumes will also join the high growth areas by 2050, but road transportation will dominate in these areas.

“Growth in trade is also expected to outpace GDP growth over the next 50 years”

“Significant growth” will take place in the Mediterranean and Caspian Sea corridors and despite slow growth (1.5% annually), the intra-European corridor will remain, in absolute terms, as one of the most active freight transport corridors in the world.

Generally, traditional trade routes between developed economies will grow relatively slowly, whereas the growth of the trade corridors connecting emerging economies will average 17% growth annually.

“Trade patterns are expected to shift geographically, illustrating the unequal distribution of income across world regions and changes in consumption structure and relative productivity. Asia and Africa will face substantial increases in trade shares, thanks to rapid economic growth, mainly after 2030, resulting in large market potential with low production costs,” said the report. “In parallel, trade within the Euro area will perform less efficiently while some OECD countries will undergo a slight decrease of their trade share.”

Non-OECD growth will be particularly strong as multi-lateral trade liberalisation has an increasing impact on trade in these countries. For instance, trade among Asian economies is estimated to increase from around 6% to 16% over the projection period.

 Seaborne recovery

The ITF calculates that approximately 85% of total international freight volume is carried by sea and since the recovery in trade from the 2009 recession, international sea cargo has continued to outperform world GDP growth.

“International trade has grown rapidly in the post-war era with trade volume growing twenty-seven fold between 1950 and 2007, three times faster than world Gross Domestic Product (GDP) growth. Growth in trade is also expected to outpace GDP growth over the next 50 years,” said the report.

Underlying trade projections assume that GDP will grow at an annual 3% rate, while growth in trade is estimated to grow at around 3.5% yearly. This is almost half of the previous 6.9% growth rate that characterised the period 1990-2007.

World seaborne trade, measured in tons loaded, grew 4% to 9.2bn tons in 2012, or 11% above the pre-crisis peak in 2008, according to the UNCTAD. In tonne-miles, maritime transport grew by 4%, reaching 46bn tonne-miles. “Recent trade projections suggest that the world seaborne trade growth will stabilise to moderate levels in the near-term,” said the report.

Maritime transport is expected to surge by 2050 on the back of global and regional increases in population levels and increased economic activity. “This increase is driven by the changes in the product composition but also by growth in the average hauling distance caused by changes in the geographical composition of trade,” said the report.

This overall increase in international trade will challenge ports around the world as they struggle to cope with a near fourfold increase in port volumes by 2050. And on an environmental front, over the period 2010-2050, international trade related CO2 emissions are expected to grow by a factor of 3.9, with road freight accounting for the majority of those emissions. Growth in seaborne trade will contribute to a 290% growth in CO2 emissions from freight transport by 2050.

ITF Secretary-General José Viegas commented: “The foreseeable increase in global freight represents an unprecedented challenge for the world’s transport systems. Increasing capacity constraints in transport can act as a brake on economic growth, [while] a quadrupling of freight emissions can seriously undermine climate change mitigation.”