Review of Marine Time Transport 2015

U n i t e d N at i o n s C o n f e r e n c e o n T r a d e A n d D e v e l o p m e n t
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Review
of Maritime
Transport
2015
U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T
REVIEW
OF MARITIME
TRANSPORT
2015
New York and Geneva, 2015

ii REVIEW OF MARITIME TRANSPORT 2015
NOTE
The Review of Maritime Transport is a recurrent publication prepared by the UNCTAD secretariat since 1968 with
the aim of fostering the transparency of maritime markets and analysing relevant developments. Any factual or
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UNITED NATIONS PUBLICATION
Sales no. E. 15.II.D.6
ISBN 978-92-1-112892-5
eISBN: 978-92-1-057410-5
ISSN 0566-7682
ACKNOWLEDGEMENTS iii
ACKNOWLEDGEMENTS
The Review of Maritime Transport 2015 has been prepared by UNCTAD. The preparation was coordinated
by Jan Hoffmann with administrative support and formatting by Wendy Juan, under the overall guidance of
Anne Miroux. Contributors were Regina Asariotis, Hassiba Benamara, Jan Hoffmann, Anila Premti, Ricardo
Sanchez, Vincent Valentine, Gordon Wilmsmeier and Frida Youssef.
The publication was edited by Deniz Barki and John Rogers. The cover was designed by Sophie Combette.
The desktop publishing was carried out by Nathalie Loriot.
The considered comments and valuable input provided by the following reviewers are gratefully acknowledged:
Celine Bacrot, James Coldwell, Trevor Crowe, Mahin Faghfouri, Peter Faust, Marco Fugazza, Ki-Soon Hwang,
Nicolas Maystre, Shin Ohinata, Tansu Ok, Richard Oloruntoba, Christopher Plsson, Sarinka Parry-Jones,
Dong-Wook Song, Patricia Sourdin and Andr Stochniol. Thanks are also due to Vladislav Shuvalov for reviewing
the publication in full.
iv REVIEW OF MARITIME TRANSPORT 2015
TABLE OF CONTENTS
Note.................................................................................................................................................................................... ii
Acknowledgements.............................................................................................................................................................. iii
List of tables, figures and boxes............................................................................................................................................ v
Abbreviations ...................................................................................................................................................................... vii
Explanatory notes................................................................................................................................................................ viii
Vessel groupings used in the Review of Maritime Transport.................................................................................................... ix
Executive summary.............................................................................................................................................................. x
1. DEVELOPMENTS IN INTERNATIONAL SEABORNE TRADE............................................. 1

A. World economic situation and prospects......................................................................................................... 2
B. World seaborne trade.................................................................................................................................... 5
C. Sustainable and resilient maritime transport systems....................................................................................... 21
2. STRUCTURE, OWNERSHIP AND REGISTRATION OF THE WORLD FLEET......................... 29

A. Structure of the world fleet............................................................................................................................. 30
B. Ownership and operation of the world fleet..................................................................................................... 35
C. Container ship deployment and liner shipping connectivity .............................................................................. 39
D. Registration of ships...................................................................................................................................... 41
E. Shipbuilding, demolition and new orders......................................................................................................... 43
3. FREIGHT RATES AND MARITIME TRANSPORT COSTS.................................................. 47

A. Determinants of maritime transport costs ....................................................................................................... 48
B. International transport costs........................................................................................................................... 54
C. Recent developments in freight rates.............................................................................................................. 56
4. PORTS....................................................................................................................... 65
A. Ports and port-related developments.............................................................................................................. 66
B. International terminal operators...................................................................................................................... 70
C. Sustainability challenges facing ports ............................................................................................................. 73
5. LEGAL ISSUES AND REGULATORY DEVELOPMENTS..................................................... 79

A. Important developments in transport law......................................................................................................... 80
B. Regulatory developments relating to the reduction of greenhouse gas emissions from international
shipping and other environmental issues......................................................................................................... 83
C. Other legal and regulatory developments affecting transportation..................................................................... 89
D. Status of conventions..................................................................................................................................... 96
E. Trade facilitation and sustainable development................................................................................................ 97
TABLE OF CONTENTS v
LIST OF TABLES, FIGURES AND BOXES
Tables
1.1. World economic growth, 20122015 (annual percentage change)................................................................... 2

1.2. Growth in the volume of merchandise, 20122014 (annual percentage change)............................................... 4
1.3. Developments in international seaborne trade, selected years (millions of tons loaded)....................................... 6
1.4 (a). World seaborne trade 20062014, by type of cargo, country group and region (millions of tons)........................ 8
1.4 (b). World seaborne trade 20062014, by type of cargo, country group and region (percentage share).................... 10
1.5. Major producers and consumers of oil and natural gas, 2014 (world market share in percentage)...................... 15
1.6. Some major dry bulks and steel: Main producers, users, exporters and importers, 2014 (world market
shares in percentages)................................................................................................................................... 17
1.7. Estimated containerized cargo flows on major EastWest container trade routes, 20092014
(million TEUs and percentage annual change).................................................................................................. 21
2.1. World fleet by principal vessel types, 20142015 (beginning-of-year figures, thousands of dwt;
percentage share in italics) ........................................................................................................................... 31
2.2. Age distribution of the world merchant fleet, by vessel type, as of 1 January 2015 (percentage
of total ships and dwt).................................................................................................................................... 33
2.3. Ownership of the world fleet, as of 1 January 2015 (dwt)................................................................................. 36
2.4. The 50 leading liner companies, 1 May 2015 (Number of ships and total shipboard capacity
deployed, ranked by TEU) .............................................................................................................................. 37
2.5. Container ship deployment on selected routes, 1 May 2015............................................................................. 40
2.6. The 35 flags of registration with the largest registered fleets, as of 1 January 2015 (dwt).................................. 42
2.7. Distribution of dwt capacity of vessel types, by country group of registration, January 2015
(beginning-of-year figures,per cent of dwt, annual growth in percentage points in italics).................................. 43
2.8. Deliveries of newbuildings, major vessel types and countries where built (2014, thousands of GT)...................... 44
2.9. Tonnage reported sold for demolition, major vessel types and countries where demolished
(2014, thousands of GT)................................................................................................................................ 44
3.1. Container freight markets and rates................................................................................................................ 58
3.2. Baltic Exchange tanker indices....................................................................................................................... 59
3.3. Tanker market summary clean and dirty spot rates, 20102014 (Worldscale)................................................ 60
4.1. Container port throughput for 80 developing countries/territories and economies in transition,
20122014 (TEUs)........................................................................................................................................ 67
4.2. Top 20 container terminals and their throughput, 20122014 (TEUs and percentage change)............................ 69
4.3. Top global terminals berth productivity, 2014 (container moves per ship, per hour on all vessel sizes)................ 70
4.4. Worlds leading ports by productivity, 2014 (container moves per ship, per hour on all vessel
sizes and percentage increase)....................................................................................................................... 71
5.1. Contracting States Parties to selected international conventions on maritime transport as at 30 June 2015........ 97
5.2. Examples of articles of the TFA that may benefit from and help to achieve SDGs............................................... 98
vi REVIEW OF MARITIME TRANSPORT 2015
Figures
1.1. The OECD Industrial Production Index and indices for world GDP, merchandise trade and seaborne
shipments (19752014) (base year 1990 = 100)........................................................................................... 5
1.2. International seaborne trade, selected years (millions of tons loaded)................................................................ 6
1.3. Structure of international seaborne trade, 2014............................................................................................... 7
1.4 (a). World seaborne trade, by country group, 2014 (percentage share in world tonnage).......................................... 12
1.4 (b). Participation of developing countries in world seaborne trade, selected years
(percentage share in world tonnage)............................................................................................................... 12
1.4 (c). World seaborne trade, by region, 2014 (percentage share in world tonnage)..................................................... 13
1.5. World seaborne trade in cargo tonmiles by cargo type, 20002015 (billions of tonmiles)............................... 15
1.6 (a). Global containerized trade, 19962015 (million TEUs and percentage annual change)....................................... 19
1.6 (b). Estimated containerized cargo flows on major EastWest container trade routes (million TEUs), 19952014....... 20
1.6 (c). Distribution of global containerized trade by route, 2014 (percentage share of global trade in TEUs)................... 20
2.1. Annual growth of the world fleet, 20002014 (per cent of dwt)........................................................................ 30
2.2. World fleet by principal vessel types, 19802015 (beginning-of-year figures, percentage share of dwt).............. 31
2.3. Contract year for tonnage (dwt) delivered in 2014............................................................................................ 32
2.4. Vessel types of the world fleet, by year of building (dwt as of 1 January 2015).................................................. 32
2.5. Share of newbuildings (number of ships) with ballast water treatment systems, by main vessel
type, 20072014.......................................................................................................................................... 35
2.6. Presence of liner shipping companies: Average number of companies per country and average
container-carrying capacity deployed (TEUs) per company per country (20042015)......................................... 41
2.7. World tonnage on order, 20002015 (thousands of dwt).................................................................................. 45
3.1. Determinants of maritime transport costs........................................................................................................ 48
3.2. Statistical correlation between articles of the WTO TFA and indicators for trade efficiency.................................. 49
3.3. The no-relationship between distance and maritime transport costs............................................................... 50
3.4. The relationship between transport costs and LSBCI, 2012 and 2013............................................................... 51
3.5. Transport costs and economies of scale.......................................................................................................... 52
3.6. International transport costs: Freight costs as a percentage of value of imports, ten-year
averages within country groups, 19852014.................................................................................................. 55
3.7. Growth of demand and supply in container shipping, 20002015 (annual growth rates).................................... 57
3.8. Baltic Exchange Dry Index, 20122015 (index base year 1985 = 1,000 points)................................................ 61
3.9. Daily earnings of bulk carrier vessels, 20082015 ($ per day)......................................................................... 62
5.1. The Human Development Index (HDI) and the number of trade facilitation measures notified as category A......... 99
Boxes
1.1. Examples of voluntary self-regulation in shipping ............................................................................................ 22

5.1. The current status of the ISO 28000 series of standards ................................................................................. 92
ABBREVIATIONS vii
ABBREVIATIONS
AEO authorized economic operator
BWM Convention International Convention for the Control and Management of Ships Ballast Water
and Sediments
CBP Customs and Border Protection (United States of America)
CH4 methane
CO carbon monoxide
CO2 carbon dioxide
COP21 twenty-first session of the Conference of the Parties to the United Nations Framework
Convention on Climate Change
CSAV Compaa Sudamericana de Vapores
CSI Container Security Initiative
CTPAT CustomsTrade Partnership against Terrorism (United States of America)
dwt dead-weight ton
ECA emission control area
ECLAC Economic Commission for Latin America and the Caribbean
EEDI Energy Efficiency Design Index
FEU 40-foot equivalent unit
FPSO floating production, storage and offloading unit
GDP gross domestic product
GHG greenhouse gas
GT gross tonnage
HDI Human Development Index
HNS hazardous noxious substances
HNS Convention International Convention on Liability and Compensation for Damage in Connection
with the Carriage of Hazardous and Noxious Substances by Sea
IAPH International Association of Ports and Harbors
ILO International Labour Organization
IMO International Maritime Organization
ISO International Organization for Standardization
ISPS Code International Ship and Port Facilities Security Code
JOC Journal of Commerce
kgCO2e/modTEU kilograms CO2 emitted per modified 20-foot equivalent unit
LDC least developed country
LNG liquefied natural gas
LPG liquefied petroleum gas
LPI Logistics Performance Index (World Bank)
LSBCI Liner Shipping Bilateral Connectivity Index (UNCTAD)
LSCI Liner Shipping Connectivity Index (UNCTAD)
MARPOL International Convention for the Prevention of Pollution from Ships
MEPC Marine Environment Protection Committee (IMO)
MLC Maritime Labour Convention
MRA mutual recognition agreement
MSC Maritime Safety Committee (IMO)
N2O nitrous oxide
NOx nitrogen oxides
OECD Organization for Economic Cooperation and Development
PM particulate matter
ppm parts permillion
viii REVIEW OF MARITIME TRANSPORT 2015
SAFE Framework of Standards to Secure and Facilitate Global Trade

SDG sustainable development goal
SEEMP Ship Energy Efficiency Management Plan
SID seafarers identity document
SIDS small island developing State(s)
SOLAS International Convention for the Safety of Life at Sea
SO2 sulphur dioxide
SOx sulphur oxides
STCW International Convention on Standards of Training, Certification and Watchkeeping
for Seafarers
TEU 20-foot equivalent unit
TFA Trade Facilitation Agreement (World Trade Organization)
UNCLOS United Nations Convention on the Law of the Sea
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
UNFCCC United Nations Framework Convention on Climate Change
WCO World Customs Organization
WTO World Trade Organization
EXPLANATORY NOTES
The Review of Maritime Transport 2015 covers data and events from January 2014 until June 2015. Where
possible, every effort has been made to reflect more recent developments;
All references to dollars ($) are to United States of America dollars, unless otherwise stated;
Unless otherwise stated, ton means metric ton (1,000 kg) and mile means nautical mile;
Because of rounding, details and percentages presented in tables do not necessarily add up to the totals;
n.a.: not available;
A hyphen (-) signifies that the amount is nil;
In the tables and the text, the terms countries and economies refer to countries, territories or areas;
Since 2014, the Review of Maritime Transport does not include printed statistical annexes. Instead, UNCTAD
has expanded the coverage of statistical data on compact disc and online via the following links:
Seaborne trade: http://stats.unctad.org/seabornetrade
Merchant fleet by flag of registration: http://stats.unctad.org/fleet
Merchant fleet by country of ownership: http://stats.unctad.org/fleetownership
Merchant fleet by country of ownership and flag of registration: http://stats.unctad.org/shipregistration
Ship building by country in which built: http://stats.unctad.org/shipbuilding
Ship scrapping by country of demolition: http://stats.unctad.org/shipscrapping
Liner Shipping Connectivity Index (LSCI): http://stats.unctad.org/lsci
Liner Shipping Bilateral Connectivity Index (LSBCI): http://stats.unctad.org/lsbci
Containerized port traffic: http://stats.unctad.org/teu
VESSEL GROUPINGS USED IN THE REVIEW OF MARITIME TRANSPORT ix
Vessel groupings used in the Review of Maritime Transport
Group Constituent ship types
Oil tankers Oil tankers
Bulk carriers Bulk carriers, combination carriers
General-cargo ships Multi-purpose and project vessels, roll-on roll-off cargo, general cargo
Container ships Fully cellular container ships
Other ships Liquefied petroleum gas carriers, liquefied natural gas

carriers, parcel (chemical) tankers, specialized tankers, reefers,
offshore supply ships, tugs, dredgers, cruise ships, ferries,
other non-cargo ships
Total all ships Includes all the above-mentioned vessel types
Approximate vessel size groups referred to in the Review of Maritime Transport,

according to generally used shipping terminology
Crude oil tankers

Very large crude carrier 200,000 dead-weight tons (dwt) plus
Suezmax crude tanker 120,000200,000 dwt
Aframax crude tanker 80,000119,999 dwt
Panamax crude tanker 60,00079,999 dwt
Dry bulk and ore carriers

Capesize bulk carrier 100,000 dwt plus
Panamax bulk carrier 60,00099,999 dwt
Handymax bulk carrier 40,00059,999 dwt
Handysize bulk carrier 10,00039,999 dwt
Container ships
Post-Panamax container ship beam of > 32.3 metres
Panamax container ship beam of < 32.3 metres
Source: Clarksons Research.

Note: Unless otherwise specified, the ships covered in the Review of Maritime Transport include all propelled seagoing
merchant vessels of 100 gross tonnage (GT) and above, excluding inland waterway vessels, fishing vessels, military
vessels, yachts and offshore fixed and mobile platforms and barges (with the exception of floating production storage
and offloading units (FPSOs) and drillships).
x REVIEW OF MARITIME TRANSPORT 2015
EXECUTIVE SUMMARY
The year 2015 is a milestone for sustainable The fleet

development. The international community has a
unique opportunity to strengthen its commitment
The world fleet grew by 3.5 per cent during the
to sustainable development and consider how best
12 months to 1 January 2015, the lowest annual
to mainstream sustainability principles across all
growth rate in over a decade. In total, at the beginning
economic activities and sectors, including maritime
of the year, the worlds commercial fleet consisted of
transport. In this context, relevant chapters of the
89,464vessels, with a total tonnage of 1.75billion dwt.
present edition of the Review of Maritime Transport
For the first time since the peak of the shipbuilding
highlight some issues that are at the interface of
cycle, the average age of the world fleet increased
maritime transport and sustainability and underscore
slightly during 2014. Given the delivery of fewer
the role of maritime transport in helping implement
newbuildings, combined with reduced scrapping
a workable international sustainable development
activity, newer tonnage no longer compensated for
agenda.
the natural aging of the fleet.
Greece continues to be the largest ship-owning
Seaborne trade country, followed by Japan, China, Germany and
Singapore. Together, the top five ship-owning countries
The world economy embarked on a slow-moving control more than half of the world tonnage. Five of the
recovery led by uneven growth in developed top 10 ship-owning countries are from Asia, four are
economies and a slowdown in developing countries European and one is from the Americas.
and economies in transition. In 2014, the world gross
domestic product (GDP) increased marginally by The Review of Maritime Transport further illustrates the
2.5per cent, up from 2.4per cent in 2013. Meanwhile, process of concentration in liner shipping. While the
world merchandise trade increased by 2.3 per cent; container-carrying capacity per provider per country
this is down from 2.6per cent in 2013 and below the tripled between 2004 and 2015, the average number
pre-crisis levels. of companies that provide services from/to each
countrys ports decreased by 29per cent. Both trends
Accordingly, preliminary UNCTAD estimates indicate illustrate two sides of the same coin: as ships get
that global seaborne shipments have increased by bigger and companies aim at achieving economies
3.4 per cent in 2014, that is at the same rate as in of scale, there remain fewer companies in individual
2013. Additions to volumes exceeded 300million tons markets.
taking the total to 9.84billion tons. This performance
unfolded in the context of a number of developments, New regulations require the shipping industry to invest
including (a) a slowdown in large emerging developing in environmental technologies, covering issues such
economies; (b) lower oil price levels and new refinery as emissions, waste, and ballast water treatment.
capacity developments; and (c) a slow-moving and Some of the investments are not only beneficial for the
uneven recovery in the advanced economies. environment, but may also lead to longer-term cost
savings, for example due to increased fuel efficiency.
On balance, growth in world GDP, merchandise
trade and seaborne shipments is expected to Economic and regulatory incentives will continue to
continue at a moderate pace in 2015. The outlook encourage individual owners to invest in modernizing
remains uncertain and subject to many downside their fleets. Unless older tonnage is demolished, this
risks, including continued moderate growth in global would lead to further global overcapacity, continuing
demand and merchandise trade, the fragile recovery in the downward pressure on freight and charter rates.
Europe, diverging outlooks for net oil consumers and The interplay between more stringent environmental
producers, geopolitical tensions, and a potential faster regulations and low freight and charter rates should
slowdown in developing economies, in particular the encourage the further demolition of older vessels;
large emerging economies, as well as uncertainty this will not only help reduce the oversupply in the
about the pace and the implications of the slowdown market, but also contribute to lowering the global
in China. environmental impact of shipping.
EXECUTIVE SUMMARY xi
Freight costs to international terminal operators. The worlds

largest terminal operator handled 65.4million 20-foot
Developing countries, especially in Africa and Oceania, equivalent units (TEUs) in 2014, an increase of 5.5per
pay 40 to 70 per cent more on average for the cent over the previous year. Of this figure, 33.6million
international transport of their imports than developed TEUs related to its operations at the port of Singapore
countries. The main reasons for this situation are to and 31.9million TEUs from its international portfolio.
be found in these regions trade imbalances, pending Hutchison Port Holdings trust is the second largest
port and trade facilitation reforms, as well as lower international terminal operator by market share. With
trade volumes and shipping connectivity. There operations in China and Hong Kong, China, it is not
is potential for policymakers to partly remedy the as geographically diverse as some other international
situation through investments and reforms, especially terminal operators. APM Terminals has a geographical
in the regions seaports, transit systems and customs presence in 39 countries. DP World is the most
administrations. geographically diverse of the global terminal operators,
with a network of more than 65 terminals spanning six
Container freight rates remained volatile throughout continents.
2014 although with different trends on individual
trade lanes. Market fundamentals have not changed The economic, environmental and social challenges
significantly despite the expansion in global demand facing ports include growing and concentrated traffic
for container shipping. This was mainly due to volumes brought about by ever-increasing ship size;
pressure from the constant supply of vessels that the the cost of adaptation of port and port hinterland
market rates continued to face, with the introduction infrastructure measures; a changing marketplace as
of very large units on mainlane trades and the a result of increased alliances between shipping lines;
cascading effect on non-mainlanes trades. The tanker national budget constraints limiting the possibilities
market, which encompasses the transportation of of public funding for transport infrastructure; volatility
crude oil, refined petroleum products and chemicals, in energy prices, the new energy landscape and the
witnessed an equally volatile freight rate environment transition to alternative fuels; the entry into force of
in 2014 and early 2015. The dry bulk market freight stricter sulphur limits (in, for example, International
rates faced another challenging year influenced by the Maritime Organization (IMO) emission control area
surplus capacity that still exists and the uncertainties (ECA) countries); increasing societal and environmental
in demand projections. Bulk carrier earnings fell 5per pressure; and potential changes in shipping routes
cent from 2013 to reach an average of $9,881 per from new or enlarged international passage ways.
day in 2014. The low level of earnings exerted financial
pressure on owners and led to several companies
Legal and regulatory framework
filing for bankruptcy.
In 2014, important regulatory developments in the field

Ports of transport and trade facilitation included the adoption
of the International Code for Ships Operating in Polar
Developing economies share of world container port Waters (Polar Code), expected to enter into force
throughput increased marginally to approximately on 1 January 2017, as well as a range of regulatory
71.9 per cent. This continues the trend of a gradual developments relating to maritime and supply chain
rise in developing countries share of world container security and environmental issues.
throughput. The increased share of world container To further strengthen the legal framework relating
throughput for developing countries reflects an
to ship-source air pollution and the reduction of
increase in SouthSouth trade.
greenhouse gas (GHG) emissions from international
The performance of ports and terminals is important shipping, several regulatory measures were adopted
because it affects a countrys trade competitiveness. at IMO, and the third IMO GHG Study 2014 was
There are many determinants to port/terminal finalized. Also, guidelines for the development of
performance labour relations, number and type the Inventory of Hazardous Materials required under
of cargo handling equipment, quality of backhaul the 2010 International Convention on Liability and
area, port access channel, land-side access and Compensation for Damage in Connection with the
customs efficiency, as well as potential concessions Carriage of Hazardous and Noxious Substances by
xii REVIEW OF MARITIME TRANSPORT 2015
Sea (HNS Convention) which, however, is not yet in Secure and Facilitate Global Trade (SAFE Framework)
force were adopted, and further progress was made in June 2015, which includes a new pillar 3: Customs-
with respect to technical matters related to ballast to-other government and inter-government agencies.
water management, ship recycling, and measures As regards suppression of maritime piracy and armed
helping to prevent and combat pollution of the sea robbery, positive developments were noted in the
from oil and other harmful substances. waters off the coast of Somalia and the wider western
Continued enhancements were made to regulatory Indian Ocean. However, concern remains about the
measures in the field of maritime and supply chain seafarers still being held hostage. A downward trend
security and their implementation, including the of attacks in the Gulf of Guinea was also observed,
issuance of a new version of the World Customs indicating that international, regional and national
Organization (WCO) Framework of Standards to efforts are beginning to take effect.
DEVELOPMENTS IN
INTERNATIONAL
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 2.5per cent, up from 2.4per cent
in 2013. Meanwhile, world merchandise trade increased by 2.3per cent; this is down from 2.6per
cent in 2013 and below the pre-crisis levels.
Accordingly, preliminary UNCTAD estimates indicate that global seaborne shipments have
increased by 3.4 per cent in 2014, that is at the same rate as in 2013. Additions to volumes
exceeded 300million tons taking the total to 9.84billion tons. This performance unfolded in the
context of a number of developments, including (a) a slowdown in large emerging developing
economies; (b) lower oil price levels and new refinery capacity developments; and (c) a slow-
moving and uneven recovery in the advanced economies.
On balance, growth in world GDP, merchandise trade and seaborne shipments is expected
to continue at a moderate pace in 2015. The outlook remains uncertain and subject to many
downside risks, including continued moderate growth in global demand and merchandise
trade, the fragile recovery in Europe, diverging outlooks for net oil consumers and producers,
geopolitical tensions, and a potential faster slowdown in developing economies, in particular the
large emerging economies, as well as uncertainty about the pace and the implications of the
slowdown in China.
2 REVIEW OF MARITIME TRANSPORT 2015
A. WORLD ECONOMIC SITUATION AND Gross domestic product growth in the transition
economies was constrained by weak exports
PROSPECTS and external financing constraints as well as the
uncertainty caused by the geopolitical conflicts in
1. World economic growth the region. Although developing countries remained
the engine of growth, contributing three quarters of
Global GDP increased by 2.5per cent in 2014, up from global expansion in 2014 (International Monetary
2.4per cent in 2013 (see table 1.1). Although positive, Fund, 2015), slower GDP growth reflects, in particular,
this growth remains below the pre-crisis levels with weaker expansion in developing America and a
almost all economies having shifted to a lower growth slowdown in China. Elsewhere, the economies of the
path. Growth in the advanced economies accelerated least developed countries (LDCs) continued to expand
to 1.6 per cent, while GDP in both the developing at a rapid rate (5.3per cent).
economies and the economies in transition expanded
at the slower rates of 4.5per cent and 0.9per cent, China continued to grow at the relatively robust rate
respectively. The emerging recovery in the advanced of 7.4per cent. However, this rate is much below the
economies was uneven, led by accelerated growth average growth of 10.0per cent achieved years earlier
in the United States (2.4 per cent) and the United and reflects, to a large extent, the slowdown in the
Kingdom of Great Britain and Northern Ireland (3.0per industrial production. Growth in industrial production
cent) and a fragile recovery in the European Union averaged 8.0per cent in 2014, down from 14.0per
(1.3per cent). Meanwhile, GDP growth in Japan came cent in 2011 and 10per cent in 2012 and 2013 (Dry
to a standstill due, among other factors, to the 2014 Bulk Trade Outlook, 2015a). Meanwhile, GDP in India
consumption tax increase and the fading away of the expanded by 7.1per cent and is expected to grow at
effect of the fiscal and monetary stimulus introduced a faster rate in 2015. The slowdown in China entails
in 2013. some important implications for seaborne trade,
Table 1.1. World economic growth, 20122015 (annual percentage change)

Region/country 2012 2013 2014 2015a
WORLD 2.2 2.4 2.5 2.5
Developed economies 1.1 1.3 1.6 1.9
of which:
European Union 28 -0.5 0.1 1.3 1.7
of which:
France 0.2 0.7 0.2 1.2
Germany 0.4 0.1 1.6 1.5
Italy -2.8 -1.7 -0.4 0.7
United Kingdom 0.7 1.7 3.0 2.3
Japan 1.7 1.6 -0.1 0.9
United States 2.3 2.2 2.4 2.3
Developing economies 4.7 4.8 4.5 4.1
of which:
Africa 5.1 3.8 3.4 3.2
South Africa 2.2 2.2 1.5 1.9
Asia 5.1 5.6 5.5 5.2
China 7.7 7.7 7.4 6.9
India 4.4 6.4 7.1 7.5
Western Asia 4.0 4.1 3.3 2.5
Developing America 3.2 2.8 1.4 0.8
Brazil 1.8 2.7 0.1 -1.5
Least developed countries 4.3 5.3 5.3 3.5
Transition economies 3.3 2.0 0.9 -2.6
of which:
Russian Federation 3.4 1.3 0.6 -3.5
Source: UNCTAD. Trade and Development Report 2015. Table 1.1.

a
Forecast.
Note: Calculations for country aggregates are based on GDP at constant 2005 dollars.
CHAPTER 1: DEVELOPMENTS IN INTERNATIONAL SEABORNE TRADE 3
shipping investors, service providers and users in view including a global demand and merchandise trade
of the countrys major role in supporting growth in Asia that undershoot expectations, the different economic
as well as in other developing regions. On the import outlooks for net oil consumers and producers, political
side, dry bulk shipping and crude oil tankers have shocks and geopolitical tensions, a potential faster
benefited the most from Chinas robust demand while, slowdown in large developing economies, as well as
on the export side, container shipping, especially on uncertainty about the pace of the slowdown in China
the intra-Asian routes and westbound to Europe and and related implications for the world economy, trade
North America, was the main beneficiary. The impact and seaborne shipments.
of a further slowdown in China will extend beyond the
Chinese and Asian borders. 2. World merchandise trade
Looking forward, global economic growth is projected
to moderate in 2015 supported mainly by growth in In 2014, the volume of global merchandise trade (that
the advanced economies and relatively strong growth is, trade in value terms but adjusted to account for
in Asia. Growth in developing countries as a group inflation and exchange rate movements) increased at
is expected to decelerate due to factors such as the the slower rate of 2.3 per cent, down from 2.6 per
low oil price levels and their impact on oil exporting cent in 2013. Reflecting an uneven recovery in the
countries, persistent political uncertainties, concerns advanced economies, this performance remained
about developments involving the European Union below the pre-crisis trends, with slower growth in
and Greece, and a continued rebalancing of Chinas developing economies and economies in transition
economy. constraining growth in overall merchandise trade
volumes (see table 1.2).
The precise impact of lower oil prices will depend
largely on their duration. The broad effects of a drop Despite the deceleration recorded in 2014, developing
are generally positive as it stimulates global demand. countries continue to fuel global merchandise trade
However, this also implies an income shift from oil flows. UNCTAD data indicate that although developed
producers to consumers. Lower oil price levels will economies continue to contribute the largest shares to
support the purchasing power of consumers in world exports and imports (51.1per cent and 54.9per
importing countries. For example, a sustained $30 cent, respectively, in 2014), their contribution has been
decline in oil prices is expected to result in over declining over the years. Meanwhile, the contribution
$200billion per year of savings for consumers in the of developing countries and economies in transition to
United States through lower prices for gasoline, diesel, world merchandise trade has been on the rise.
jet fuel and home heating oil (Politico Magazine, 2014). The share of developing countries in world exports in
Conversely, demand from oil exporting countries will be
2014 was estimated at 45.0per cent (32.0per cent
constrained, including as a result of fiscal adjustments
in 2000), while their share of world imports amounted
(for example, cuts of subsidies), unfavourable terms
to 42.2per cent (28.9per cent in 2000). This reflects
of trade and loss of revenue. It is estimated that each
the shift in economic influence observed over recent
one-dollar fall in oil prices will result in a $2billion loss
years whereby developing countries are gaining
in revenue for the Russian Federation (Johnson, 2015).
greater market share in world merchandise trade both
Meanwhile, the oil and gas export earnings of the
in terms of growth and levels.
Gulf Cooperation Council countries are expected to
decline by around $300billion (International Monetary The uneven performances among and within country
Fund, 2015). Other potential impacts of persistent groupings impacted the performance of containerized
lower oil prices relate to the delays, postponements or trade in 2014. Breaking away from patterns observed
cancellations of oil and gas investment projects that since 2009, volumes on the AsiaEurope and trans-
may only have been feasible in a higher energy price- Pacific container trade lanes (peak leg) reversed trends
setting. Reduced energy sector investments will, in and recorded robust growth during the year.
the medium or long term, likely dampen production as Projected growth remains vulnerable, however, given
well as growth in oil and gas trades. continued uncertainties arising in connection with
In sum, the world economy has embarked on a slow weaker growth in emerging economies, particularly
moving global recovery. On balance, GDP growth is a potential sharp slowdown in China, as well as
expected to continue to moderate in 2015 with the concerns about the fragile recovery in the European
outlook remaining subject to many downside risks, Union and the situation in Greece. The slowdown
in China will impact on the global recovery in trade appears to be unwinding. Over the past few years,
volumes and affect the prospects of other countries, world GDP has been growing at about the same rate
especially developing countries that have over recent as trade. This may be the result of limited growth in
years deepened their economic and trade relations the fragmentation of global production processes, a
with China through greater integration into regional maturation of value chains (in China and the United
and global value chains and by emerging as key States), a change in the composition of global demand
sources of supply in terms of raw commodities. with a slow recovery in investment goods that are
more trade intensive than government and consumer
A rebalancing of Chinas economy can significantly
spending, costlier or limited trade finance, and
reshape the maritime transport landscape and alter
potentially a rise in reshoring/nearshoring. In
shipping and seaborne trade patterns. The super
the latter case, it has been observed that trade in
cycle experienced by shipping over the past years was
intermediate goods may have weakened recently
driven by globalization and rapid growth in the division
and could signal reshoring activity or at least a
of international labour and fragmentation in international
lack of further offshoring (HSBC Bank, 2015).
production processes. Within the globalized context,
However, views on reshoring/nearshoring remain
the resource-intensive growth phase of China and its
inconclusive. Some observed trends suggest that
greater integration into the global production and value
a number of manufacturers are offshoring certain
chains have been a key driver. As China has generated
operations while at the same time bringing other
much of the growth in world seaborne trade since 2009,
activities back home or closer to home. Therefore,
the challenge for shipping is to ensure that the trade
while some reshoring may be taking place due to
dynamism generated by Chinas expansion continues
increasing labour costs in the offshore locations,
and is replicated elsewhere.
factors other than labour costs are taken into
In addition to the performance of global GDP and account when making relevant decisions about
trade, other factors may also be at play and currently production sites. These include the quality of labour
shaping the slow global economic and trade recovery. and access to foreign markets such as the Chinese
The long-term trade to GDP ratio of two to one markets (Cohen and Lee, 2015).
Table 1.2. Growth in the volume of merchandise, 20122014 (annual percentage change)
Countries/regions
2012 2013 2014 2012 2013 2014
2.0 2.6 2.3 WORLD 2.0 2.3 2.3
0.6 1.4 2.0 Developed economies -0.4 -0.3 3.2
of which:
-0.1 1.7 1.5 European Union -2.5 -0.9 2.8
-1.0 -1.9 0.6 Japan 3.8 0.5 2.8
3.9 2.6 3.1 United States 2.8 0.8 4.7
4.0 4.2 2.9 5.1 6.1 2.0
Developing economies
of which:
5.5 -2.0 -3.6 Africa 13.2 5.2 3.3
3.2 2.1 2.4 Developing America 3.3 4.0 0.6
4.0 5.2 3.5 Asia 7.7 6.6 2.2
of which:
6.2 7.7 6.8 China 3.6 9.9 3.9
-1.8 8.5 3.2 India 5.9 -0.2 3.2
9.6 3.1 0.3 Western Asia 9.2 9.6 0.2
0.7 1.8 0.2 Transition economies 5.6 -0.8 -8.5
Source: UNCTAD secretariat, based on UNCTADstat.

Note: Data on trade volumes are derived from international merchandise trade values deflated by UNCTAD unit value indices.
Consequently, it may be argued that long-term trade B. WORLD SEABORNE TRADE

recovery depends on trends in GDP growth as well as
on how the relationship between trade and GDP unfolds
1. General trends in seaborne trade
and whether relevant initiatives to further stimulate
demand and trade are implemented. These may include Although the responsiveness of trade to GDP growth
stimulating demand for investment goods (for example, may have moderated over recent years, demand for
capital goods, transport and equipment) that are more maritime transport services and seaborne trade volumes
import intensive; reorganizing supply chains with a new continue to be shaped by global economic growth
scope for the division of international labour, including and the need to carry merchandise trade. Figure 1.1
in South Asia, sub-Saharan Africa and South America; highlights the association between economic growth
increasing trade finance; furthering the liberalization of and industrial activity, as measured in this particular
trade and reducing protective measures. In this respect, case by the Organization for Economic Cooperation
the potential for greater trade liberalization is firming up and Development (OECD) Industrial Production Index,
with the adoption of the World Trade Organization (WTO) merchandise trade and seaborne shipments.
Trade Facilitation Agreement (TFA) and the negotiations
relating to the potential expansion of the WTO Information Preliminary estimates indicate that the volume of world
Technology Agreement. Other initiatives including, seaborne shipments expanded by 3.4 per cent in
among others, the Transatlantic Trade and Investment 2014, that is, at the same rate as in 2013. Additions
Partnership between the European Union and the United to volumes exceeded 300 million tons, taking the
States, which could raise the transatlantic annual GDP total to 9.84billion, or around four fifths of total world
by $210 billion (Francois et al., 2013) and the Trans- merchandise trade. Dry cargo was estimated to have
Pacific Partnership, which could boost world income by accounted for over two thirds of the total, while the share
$295billion, also have the potential to further stimulate of tanker trade, including crude oil, petroleum products
global trade (Petri and Plummer, 2012). and gas was estimated to have slightly declined from
Figure 1.1. The OECD Industrial Production Index and indices for world GDP, merchandise trade and seaborne
shipments (19752014) (base year 1990 = 100)
350
World
merchandise
300
trade
250 World
seaborne
trade
200
World GDP
150
OECD
Industrial
100 Production
Index
50
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Sources: UNCTAD secretariat, based on OECD Main Economic Indicators, June 2015; United Nations Department of Economic and
Social Affairs, 2015; LINK Global Economic Outlook, June 2015; UNCTAD Review of Maritime Transport, various issues;
WTO, appendix table A1a, World merchandise exports, production and gross domestic product, 19502012; WTO press
release 739, 14 April 2015.
Table 1.3. Developments in international seaborne trade, selected years (millions of tons loaded)
Total
Year Oil and gas Main bulksa Other dry cargo (all cargoes)
1970 1 440 448 717 2 605
1980 1 871 608 1 225 3 704
1990 1 755 988 1 265 4 008
2000 2 163 1 295 2 526 5 984
2005 2 422 1 709 2 978 7 109
2006 2 698 1 814 3 188 7 700
2007 2 747 1 953 3 334 8 034
2008 2 742 2 065 3 422 8 229
2009 2 642 2 085 3 131 7 858
2010 2 772 2 335 3 302 8 409
2011 2 794 2 486 3 505 8 784
2012 2 841 2 742 3 614 9 197
2013 2 829 2 923 3 762 9 514
2014 2 826 3 112 3 903 9 842
Sources: UNCTAD secretariat, based on data supplied by reporting countries and as published on the relevant government and port
industry websites, and by specialist sources. Data for 2006 onwards have been revised and updated to reflect improved
reporting, including more recent figures and better information regarding the breakdown by cargo type. Figures for 2014 are
estimated based on preliminary data or on the last year for which data were available.
a
Iron ore, grain, coal, bauxite/alumina and phosphate rock; the data for 2006 onwards are based on various issues of the Dry
Bulk Trade Outlook, produced by Clarksons Research.
Figure 1.2. International seaborne trade, selected years (millions of tons loaded)
12 000
10 000
8 000
6 000
4 000
2 000
0 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Container 102 152 234 371 598 969 1 076 1 193 1 249 1 127 1 280 1 393 1 464 1 544 1631
Other dry cargo 1 123 819 1 031 1 125 1 928 2 009 2 112 2 141 2 173 2 004 2 022 2 112 2 150 2 218 2272
Five major bulks 608 900 988 1 105 1 295 1 709 1 814 1 953 2 065 2 085 2 335 2 486 2 742 2 923 3112
Oil and gas 1 871 1 459 1 755 2 050 2 163 2 422 2 698 2 747 2 742 2 642 2 772 2 794 2 841 2 829 2 826
Sources: UNCTAD, Review of Maritime Transport, various issues. For 20062014, the breakdown by type of cargo is based on
Clarksons Research, Shipping Review and Outlook, various issues.
nearly 30.0per cent in 2013 to 28.7per cent in 2014 trade weakened as compared with the previous year.
(see tables1.3, 1.4 (a) , 1.4 (b) and figure1.2). Crude oil shipments contracted (-1.6per cent), while
Dry cargo shipments increased by 5.0per cent, while petroleum products (+1.7 per cent) and gas trades
tanker trade contracted by 1.6 per cent. Within dry (+3.9per cent) expanded at slower rates. The structure
cargo, dry bulk trade, including the five major bulk of world seaborne trade is presented in figure 1.3.
commodities (iron ore, coal, grain, bauxite/alumina and Developing countries continued to contribute
phosphate rock) as well as the minor bulk commodities larger shares to international seaborne trade. Their
(agribulks, metals and minerals, and manufactures) is contribution in terms of global goods loaded was
estimated to have increased by 5.0 per cent, taking estimated at 60per cent, while their import demand
the total to 4.55billion tons. Although growth in coal as measured by the volume of goods unloaded
trade is estimated to have decelerated significantly to reached 61 per cent (see figure 1.4 (a)). Behind the
2.8per cent as compared with over 12.0per cent in headline figures however, the individual contributions
2012 and 5.0 per cent in 2013, dry bulk shipments vary by regions and type of cargo, reflecting among
continued to be supported by the rapid expansion of other factors, differences in countries economic
global iron ore volumes, which in turn, was driven by structures, composition of trade, urbanization and
Chinas continued strong import demand. level of development, as well as levels of integration
into global trading networks and supply chains.
Other dry cargo (general cargo, break bulk and
containerized) accounted for 35.2 per cent of all Over the past decade, developing countries have
dry cargo shipments and is estimated to have incrementally shifted patterns of trade. Since the
increased by 4.9per cent to reach 2.47billion tons. 1970s, the distribution between the goods loaded
Containerized trade, which accounted for about two and unloaded has changed significantly. As shown
thirds of other dry cargo, was estimated to have in figure 1.4 (b), over the years developing countries
increased by a strong 5.6per cent, taking the total to have become major importers and exporters and a
1.63billion tons. In 2014, the performance of tanker driving force underpinning seaborne trade flows and
Figure 1.3. Structure of international seaborne trade, 2014
Grain
Gas & chemicals 4%
6%
Petroleum products Crude oil

9% 17%
Other dry
9% Containerized
15%
Coal
12%
Minor bulks
15%
Iron ore
13%
Source: UNCTAD secretariat, based on Clarksons Research, Seaborne Trade Monitor, 2(5), May 2015.
Table 1.4 (a). World seaborne trade 20062014, by type of cargo, country group and region (millions of tons)
Goods loaded Goods unloaded
Country group Year Petroleum Petroleum

Total Crude products Dry cargo Total Crude products Dry cargo
and gas and gas
Millions of tons
World 2006 7 700.3 1 783.4 914.8 5 002.1 7 878.3 1 931.2 893.7 5 053.4
2007 8 034.1 1 813.4 933.5 5 287.1 8 140.2 1 995.7 903.8 5 240.8
2008 8 229.5 1 785.2 957.0 5 487.2 8 286.3 1 942.3 934.9 5 409.2
2009 7 858.0 1 710.5 931.1 5 216.4 7 832.0 1 874.1 921.3 5 036.6
2010 8 408.9 1 787.7 983.8 5 637.5 8 443.8 1 933.2 979.2 5 531.4
2011 8 784.3 1 759.5 1 034.2 5 990.5 8 797.7 1 896.5 1 037.7 5 863.5
2012 9 196.7 1 785.7 1 055.0 6 356.0 9 188.5 1 929.5 1 055.1 6 203.8
2013 9 513.6 1 737.9 1 090.8 6 684.8 9 500.1 1 882.0 1 095.2 6 523.0
2014 9 841.7 1 710.3 1 116.1 7 015.3 9 808.4 1 861.5 1 122.6 6 824.2
Developed economies 2006 2 460.5 132.9 336.4 1 991.3 4 164.7 1 282.0 535.5 2 347.2
2007 2 608.9 135.1 363.0 2 110.8 3 990.5 1 246.0 524.0 2 220.5
2008 2 715.4 129.0 405.3 2 181.1 4 007.9 1 251.1 523.8 2 233.0
2009 2 554.3 115.0 383.8 2 055.5 3 374.4 1 125.3 529.9 1 719.2
2010 2 865.4 135.9 422.3 2 307.3 3 604.5 1 165.4 522.6 1 916.5
2011 2 982.5 117.5 451.9 2 413.1 3 632.3 1 085.6 581.3 1 965.4
2012 3 122.9 125.2 459.7 2 538.0 3 700.2 1 092.6 556.5 2 051.1
2013 3 188.3 114.4 470.5 2 603.4 3 679.4 1 006.7 556.6 2 116.0
2014 3 370.8 111.8 486.7 2 772.3 3 744.1 985.4 552.4 2 206.3
Transition economies 2006 410.3 123.1 41.3 245.9 70.6 5.6 3.1 61.9
2007 407.9 124.4 39.9 243.7 76.8 7.3 3.5 66.0
2008 431.5 138.2 36.7 256.6 89.3 6.3 3.8 79.2
2009 505.3 142.1 44.4 318.8 93.3 3.5 4.6 85.3
2010 515.7 150.2 45.9 319.7 122.1 3.5 4.6 114.0
2011 505.0 132.6 42.0 330.5 156.7 4.2 4.4 148.1
2012 544.2 135.6 40.3 368.3 148.1 3.8 4.0 140.3
2013 551.9 145.1 32.1 374.8 77.4 1.1 10.6 65.7
2014 591.2 136.1 43.4 411.8 80.1 0.9 11.2 67.9
Developing economies 2006 4 829.5 1 527.5 537.1 2 765.0 3 642.9 643.6 355.1 2 644.3
2007 5 017.2 1 553.9 530.7 2 932.6 4 073.0 742.4 376.3 2 954.3
2008 5 082.6 1 518.0 515.1 3 049.6 4 189.1 684.9 407.2 3 097.0
2009 4 798.4 1 453.5 502.9 2 842.0 4 364.2 745.3 386.9 3 232.1
2010 5 027.8 1 501.6 515.6 3 010.5 4 717.3 764.4 452.0 3 500.9
2011 5 296.8 1 509.4 540.4 3 247.0 5 008.8 806.7 452.1 3 750.0
2012 5 529.6 1 524.9 555.0 3 449.7 5 340.1 833.1 494.7 4 012.4
2013 5 773.4 1 478.5 588.2 3 706.7 5 743.4 874.2 527.9 4 341.3
2014 5 879.7 1 462.4 586.0 3 831.3 5 984.3 875.3 559.0 4 550.0
Table 1.4 (a). World seaborne trade 20062014, by type of cargo, country group and region (millions of tons)
(continued)
Country group Year Petroleum Petroleum

Total Crude products Dry cargo Total Crude products Dry cargo
and gas and gas
Millions of tons
Africa 2006 721.9 353.8 86.0 282.2 349.8 41.3 39.4 269.1
2007 732.0 362.5 81.8 287.6 380.0 45.7 44.5 289.8
2008 766.7 379.2 83.3 304.2 376.6 45.0 43.5 288.1
2009 708.0 354.0 83.0 271.0 386.8 44.6 39.7 302.5
2010 754.0 351.1 92.0 310.9 416.9 42.7 40.5 333.7
2011 723.7 338.0 68.5 317.2 378.2 37.8 46.3 294.1
2012 757.8 364.2 70.2 323.4 393.6 32.8 51.0 309.8
2013 815.3 327.5 82.4 405.3 432.2 36.6 65.3 330.3
2014 761.3 301.4 78.3 381.6 466.0 36.4 69.3 360.3
America 2006 1 030.7 251.3 93.9 685.5 373.4 49.6 60.1 263.7
2007 1 067.1 252.3 90.7 724.2 415.9 76.0 64.0 275.9
2008 1 108.2 234.6 93.0 780.6 436.8 74.2 69.9 292.7
2009 1 029.8 225.7 74.0 730.1 371.9 64.4 73.6 234.0
2010 1 172.6 241.6 85.1 846.0 448.7 69.9 74.7 304.2
2011 1 239.2 253.8 83.5 901.9 508.3 71.1 73.9 363.4
2012 1 282.6 253.3 85.9 943.4 546.7 74.6 83.6 388.5
2013 1 263.7 240.0 69.8 953.9 569.4 69.4 89.4 410.7
2014 1 283.6 232.0 72.6 979.0 606.9 70.0 92.7 444.3
Asia 2006 3 073.1 921.2 357.0 1 794.8 2 906.8 552.7 248.8 2 105.3
2007 3 214.6 938.2 358.1 1 918.3 3 263.6 620.7 260.8 2 382.1
2008 3 203.6 902.7 338.6 1 962.2 3 361.9 565.6 286.8 2 509.5
2009 3 054.3 872.3 345.8 1 836.3 3 592.4 636.3 269.9 2 686.2
2010 3 094.6 907.5 338.3 1 848.8 3 838.2 651.8 333.1 2 853.4
2011 3 326.7 916.0 388.2 2 022.6 4 108.8 697.8 328.0 3 082.9
2012 3 480.9 905.8 398.1 2 177.0 4 386.9 725.7 355.5 3 305.7
2013 3 686.9 909.4 435.2 2 342.4 4 728.7 767.4 369.2 3 592.1
2014 3 826.8 927.3 434.3 2 465.2 4 897.2 768.0 392.6 3 736.5
Oceania 2006 3.8 1.2 0.1 2.5 12.9 0.0 6.7 6.2
2007 3.5 0.9 0.1 2.5 13.5 0.0 7.0 6.5
2008 4.2 1.5 0.1 2.6 13.8 0.0 7.1 6.7
2009 6.3 1.5 0.2 4.6 13.1 0.0 3.6 9.5
2010 6.5 1.5 0.2 4.8 13.4 0.0 3.7 9.7
2011 7.1 1.6 0.2 5.3 13.5 0.0 3.9 9.6
2012 8.3 1.6 0.8 5.9 13.0 0.0 4.6 8.4
2013 7.5 1.6 0.8 5.1 13.1 0.8 4.1 8.2
2014 8.1 1.6 0.9 5.5 14.2 0.9 4.4 8.9
Table 1.4 (b). World seaborne trade 20062014, by type of cargo, country group and region (percentage share)
Petroleum
Petroleum products
products and gas
Country group Year Total Crude and gas Dry cargo Total Crude Dry cargo
Percentage share
World 2006 100.0 23.2 11.9 65.0 100.0 24.5 11.3 64.1
2007 100.0 22.6 11.6 65.8 100.0 24.5 11.1 64.4
2008 100.0 21.7 11.6 66.7 100.0 23.4 11.3 65.3
2009 100.0 21.8 11.8 66.4 100.0 23.9 11.8 64.3
2010 100.0 21.3 11.7 67.0 100.0 22.9 11.6 65.5
2011 100.0 20.0 11.8 68.2 100.0 21.6 11.8 66.6
2012 100.0 19.4 11.5 69.1 100.0 21.0 11.5 67.5
2013 100.0 18.3 11.5 70.3 100.0 19.8 11.5 68.7
2014 100.0 17.4 11.3 71.3 100.0 19.0 11.4 69.6
Developed economies 2006 32.0 7.4 36.8 39.8 52.9 66.4 59.9 46.4
2007 32.5 7.5 38.9 39.9 49.0 62.4 58.0 42.4
2008 33.0 7.2 42.3 39.7 48.4 64.4 56.0 41.3
2009 32.5 6.7 41.2 39.4 43.1 60.0 57.5 34.1
2010 34.1 7.6 42.9 40.9 42.7 60.3 53.4 34.6
2011 34.0 6.7 43.7 40.3 41.3 57.2 56.0 33.5
2012 34.0 7.0 43.6 39.9 40.3 56.6 52.7 33.1
2013 33.5 6.6 43.1 38.9 38.7 53.5 50.8 32.4
2014 34.3 6.5 43.6 39.5 38.2 52.9 49.2 32.3
Transition economies 2006 5.3 6.9 4.5 4.9 0.9 0.3 0.3 1.2
2007 5.1 6.9 4.3 4.6 0.9 0.4 0.4 1.3
2008 5.2 7.7 3.8 4.7 1.1 0.3 0.4 1.5
2009 6.4 8.3 4.8 6.1 1.2 0.2 0.5 1.7
2010 6.1 8.4 4.7 5.7 1.4 0.2 0.5 2.1
2011 5.7 7.5 4.1 5.5 1.8 0.2 0.4 2.5
2012 5.9 7.6 3.8 5.8 1.6 0.2 0.4 2.3
2013 5.8 8.3 2.9 5.6 0.8 0.1 1.0 1.0
2014 6.0 8.0 3.9 5.9 0.8 0.0 1.0 1.0
Developing economies 2006 62.7 85.6 58.7 55.3 46.2 33.3 39.7 52.3
2007 62.4 85.7 56.9 55.5 50.0 37.2 41.6 56.4
2008 61.8 85.0 53.8 55.6 50.6 35.3 43.6 57.3
2009 61.1 85.0 54.0 54.5 55.7 39.8 42.0 64.2
2010 59.8 84.0 52.4 53.4 55.9 39.5 46.2 63.3
2011 60.3 85.8 52.2 54.2 56.9 42.5 43.6 64.0
2012 60.1 85.4 52.6 54.3 58.1 43.2 46.9 64.7
2013 60.7 85.1 53.9 55.4 60.5 46.4 48.2 66.6
2014 59.7 85.5 52.5 54.6 61.0 47.0 49.8 66.7
Africa 2006 9.4 19.8 9.4 5.6 4.4 2.1 4.4 5.3
2007 9.1 20.0 8.8 5.4 4.7 2.3 4.9 5.5
2008 9.3 21.2 8.7 5.5 4.5 2.3 4.7 5.3
2009 9.0 20.7 8.9 5.2 4.9 2.4 4.3 6.0
2010 9.0 19.6 9.4 5.5 4.9 2.2 4.1 6.0
2011 8.2 19.2 6.6 5.3 4.3 2.0 4.5 5.0
2012 8.2 20.4 6.6 5.1 4.3 1.7 4.8 5.0
2013 8.6 18.8 7.6 6.1 4.5 1.9 6.0 5.1
2014 7.7 17.6 7.0 5.4 4.8 2.0 6.2 5.3
Table 1.4 (b). World seaborne trade 20062014, by type of cargo, country group and region (percentage share)
(continued)
Petroleum
Petroleum products
products and gas
Country group Year Total Crude and gas Dry cargo Total Crude Dry cargo
Percentage share
America 2006 13.4 14.1 10.3 13.7 4.7 2.6 6.7 5.2
2007 13.3 13.9 9.7 13.7 5.1 3.8 7.1 5.3
2008 13.5 13.1 9.7 14.2 5.3 3.8 7.5 5.4
2009 13.1 13.2 7.9 14.0 4.7 3.4 8.0 4.6
2010 13.9 13.5 8.7 15.0 5.3 3.6 7.6 5.5
2011 14.1 14.4 8.1 15.1 5.8 3.7 7.1 6.2
2012 13.9 14.2 8.1 14.8 5.9 3.9 7.9 6.3
2013 13.3 13.8 6.4 14.3 6.0 3.7 8.2 6.3
2014 13.0 13.6 6.5 14.0 6.2 3.8 8.3 6.5
Asia 2006 39.9 51.7 39.0 35.9 36.9 28.6 27.8 41.7
2007 40.0 51.7 38.4 36.3 40.1 31.1 28.9 45.5
2008 38.9 50.6 35.4 35.8 40.6 29.1 30.7 46.4
2009 38.9 51.0 37.1 35.2 45.9 34.0 29.3 53.3
2010 36.8 50.8 34.4 32.8 45.5 33.7 34.0 51.6
2011 37.9 52.1 37.5 33.8 46.7 36.8 31.6 52.6
2012 37.8 50.7 37.7 34.3 47.7 37.6 33.7 53.3
2013 38.8 52.3 39.9 35.0 49.8 40.8 33.7 55.1
2014 38.9 54.2 38.9 35.1 49.9 41.3 35.0 54.8
Oceania 2006 0.0 0.1 0.01 0.0 0.2 - 0.7 0.1
2007 0.0 0.1 0.01 0.0 0.2 - 0.8 0.1
2008 0.1 0.1 0.01 0.0 0.2 - 0.8 0.1
2009 0.1 0.1 0.02 0.1 0.2 - 0.4 0.2
2010 0.1 0.1 0.0 0.1 0.2 - 0.4 0.2
2011 0.1 0.1 0.0 0.1 0.2 - 0.4 0.2
2012 0.1 0.1 0.1 0.1 0.1 - 0.4 0.1
2013 0.1 0.1 0.1 0.1 0.1 - 0.4 0.1
2014 0.1 0.1 0.1 0.1 0.1 - 0.4 0.1
industry websites, and by specialist sources. Data from 2006 onwards have been revised and updated to reflect improved
reporting, including more recent figures and better information regarding the breakdown by cargo type. Figures for 2014 are
estimated based on preliminary data or on the last year for which data were available.
demand for maritime transport services. They are no and purchasing power of oil producers/exporters and
longer only sources of supply of raw materials, but also consumers/importers, terms of trade, and investments
key players in globalized manufacturing processes in oil and gas, as well as investments in alternative fuels
and a growing source of demand. In terms of regional and fuel efficient technologies. Meanwhile, direct impacts
influence, Asia continued to dominate as the main on shipping and seaborne trade are reflected in lower fuel
loading and unloading area in 2014, followed by the and transport costs. Ship bunker fuel costs have fallen
Americas, Europe, Oceania and Africa (figure 1.4 (c)). significantly over the past few months. For example, the
The impact of the drop in oil price levels since June 380 centistoke bunker prices in Rotterdam dropped from
2014 extends beyond the energy markets and the world $590 per ton in June 2014 to $318 per ton in December
economy to also affect shipping and seaborne trade, in 2014, a drop of 46per cent (Clarksons Research, 2015a).
particular tanker trade. Indirect impacts are felt through Lower fuel costs reduce ship operators expenditure and
changes in the areas of activity and sectors that generate rates paid by shippers. This, in turn, can stimulate the
the demand for maritime transport services. These include demand for maritime transport services and increase
changes in production costs, economic growth, income seaborne cargo flows.
Figure 1.4 (a). World seaborne trade, by country group, 2014 (percentage share in world tonnage)
70
60
50
40
30
20
10
0 Developed economies Developing economies Transition economies

Loaded 34 60 6
Unloaded 38 61 1
industry websites, and by specialist sources. Estimated figures are based on preliminary data or on the last year for which
data were available.
Figure 1.4 (b). Participation of developing countries in world seaborne trade, selected years
(percentage share in world tonnage)
70
60
50
40
30
20
10
0 1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Loaded 63 58 51 53 56 63 62 62 61 60 60 60 61 60
Unloaded 18 26 29 37 41 46 50 51 56 56 57 58 60 61
Source: UNCTAD Review of Maritime Transport, various issues.

Figure 1.4 (c). World seaborne trade, by region, 2014 (percentage share in world tonnage)
70
60
50
40
30
20
10
Asia Americas Europe Oceania Africa

Loaded 41 22 18 12 8
Unloaded 58 16 20 2 5
industry websites, and by specialist sources. Estimated figures are based on preliminary data or on the last year for which
data were available.
In addition to being potentially beneficial to shippers not increased, owing probably to the slower design
and trade generally, it may be argued that lower speed of eco-ships and the risk for profitability. Faster
bunker fuel costs can further shape the global shipping speeds are likely to liberate excess capacity back
networks and enhance market access and connectivity into some shipping markets and therefore undermine
by making, for example, additional port calls on the fundamentals of the market and the profitability
existing services more cost-effective. Furthermore, in (Lloyds List, 2015a). It was noted that if carriers were,
addition to supporting demand and therefore larger for example, to speed up their services to remove one
crude trade volumes, lower oil prices and the related week from transit times on the AsiaEurope container
contango can lead to the use of tankers as storage route, they would be adding 2.5 per cent to the
units to store oil. Although a number of fixtures were existing capacity on the route (Lloyds List, 2015b).
reported in 2014 and early 2015, oil storage did not To put this in perspective and based on information
become as widespread as initially expected given obtained from Clarksons Research, it should be noted
the less promising trends in oil futures and the rise in that prior to implementing slow steaming, a typical
charter rates (Clarksons Research, 2015a). structure for a journey from the Far East to Europe,
for example, included eight ship services to maintain
Some observers have commented that a lower price
weekly calls over a period of 56 days for full rotation
and cost environment could potentially undermine
(28 days for one leg). With the implementation of slow
the competitiveness of energy-efficient ships and
steaming, the number of ship services increased to ten
eco-ship designs and equipment (Ship & Bunker,
to maintain weekly calls, while transit times increased
2014a). Others have argued that the benefits
to 70 days for a full rotation (35 days for one leg).
generated from slow steaming, a major cost-cutting
measure implemented since 2008/2009, could be A related development that affects the shipping
eroded as ships resume sailing at faster speeds industry is the coming into force on 1 January 2015
(Journal of Commerce (JOC), 2014). While uncertainty of the requirement under the International Convention
about the future of slow steaming remains, so far it for the Prevention of Pollution from Ships, 1973, as
would appear that average operating speeds have modified by the Protocol of 1978 (MARPOL) annex
VI (Regulations for the Prevention of Air Pollution from With crude oil volumes estimated to have contracted
Ships), specifically under regulation 14, which covers in 2014, the associated tonmiles remained flat,
emissions of sulphur oxides (SOX) and particulate indicating growth in distances travelled. The average
matter from ships. The ECAs were established under haul of crude oil trade to Asia was estimated at
MARPOL annex VI for SOX and include the Baltic Sea over 5,000 miles in 2014, or 9 per cent greater
area, the North Sea area, the North American Atlantic than 2005 levels (Elliott-Green, 2015). China has
area, and the United States Caribbean Sea area. Ships been driving growth given its increasing sourcing of
trading in ECAs are required to use fuel oil with a sulphur crude oil imports from various locations, including
content of no more than 0.10per cent from 1 January both long and shorter haul routes (for example, the
2015. The previous limit was 1.00per cent (IMO, 2015). Caribbean, West Africa, Western Asia and the Russian
The current limit applied in waters other than ECAs is Federation). India is also increasingly sourcing crude
3.50per cent and is set to drop to 0.50per cent on and oil imports from Western Asia, Western Africa and the
after 1 January 2020; however, the coming into force Caribbean, resulting in growing long-haul imports. The
of this latter limit is subject to a review to be completed average haul of Indian crude oil imports was estimated
by 2018 regarding the availability of the required fuel oil at over 4,000 miles in 2014, up from 1,900 miles in
(IMO, 2015). Although ship operators were concerned 2005 (Elliott-Green, 2015). The United States has
about the cost of using more expensive lower sulphur also contributed to the tonmile trends observed over
fuels, the lower oil price environment has helped recent years. While its crude oil imports have fallen
offset the price premium, with the cost of cleaner fuel by nearly half since 2005, its crude oil tonmiles have
remaining reasonable given the general lower oil prices declined less rapidly. This reflects the United States oil
and bunker fuel costs (Barnard, 2015). However, in trade patterns as larger import declines were recorded
anticipation of the potential increase in bunker fuel on the short-haul trades (for example, West Africa) as
costs, some carriers have announced some surcharges opposed to the longer haul Western Asian route. In
that will be applied if necessary. 2014, the average haul of crude oil imports into the
United States increased to 7,000 miles, representing
2. Seaborne trade in tonmiles an 18 per cent increase over 2005 (Elliott-Green,
2015). Tonmiles generated by the trade of petroleum
The tonmile unit offers a more accurate measure products increased by 3.8 per cent, while gas trade
of demand for shipping services and tonnage as it tonmiles expanded by 2.6 per cent, driven mainly
takes into account distance, which determines ships by growth in the liquefied petroleum gas (LPG) flows
transportation capacity over time. In 2014, growth (Clarksons Research, 2015b).
in tonmiles performed by maritime transportation
was estimated to have increased by 4.4per cent, up 3. Seaborne trade by cargo type
from 3.1per cent in 2013 (see figure 1.5) (Clarksons
Research, 2015b). Dry bulk commodities, namely iron (a) Tanker trade
ore, coal, grain, bauxite and alumina, phosphate rock
and minor bulks accounted for nearly half of the total Crude oil
52,572 estimatedbillion tonmiles performed in 2014.
While oil prices are an important market signal, other
The tonmiles of the dry bulks expanded at a firm
factors are also increasingly shaping the tanker trade
rate (6.4per cent for major dry bulk commodities and
landscape. These include the response of shale oil
5.2per cent for minor bulks). Ton-miles generated by
producers to the lower oil price levels, policy decisions
containerized trade were estimated to have increased
by members of the Organization of the Petroleum
by 5.4per cent (Clarksons Research, 2015b), driven
Exporting Countries, geopolitical developments, and
by the recovery on the peak legs of the AsiaEurope
political tensions.
and trans-Pacific trade routes as well as the continued
rise in the longer haul NorthSouth trade volumes. Reflecting subdued growth in global oil consumption
Coal and iron ore import demand from Asia has in 2014 (+0.8per cent) (International Energy Agency,
contributed significantly to the growth in dry bulk trade 2015), crude oil shipments were estimated at
volumes over recent years. Apart from China, iron ore 1.7 billion tons in 2014, a drop of 1.7 per cent over
and coal demand from other fast growing economies the previous year. The firm import demand of Asian
such as India and the Republic of Korea has also been countries, in particular China and India, the effect of
on the rise. lower oil prices on stock building, and increased oil
Figure 1.5. World seaborne trade in cargo tonmiles by cargo type, 20002015 (billions of tonmiles)
60 000
50 000
40 000
30 000
20 000
10 000
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014a 2015b
Chemicals 552 562 593 606 625 651 689 724 736 765 824 864 889 908 899 912
Gas 576 591 611 662 719 736 833 913 956 958 1 147 1 344 1 346 1 347 1 382 1 444
Oil 9 631 9 352 8 971 9 698 10 393 10 729 11 036 11 011 11 200 10 621 11 237 11 417 11 890 11 779 11 969 12 339
Container 3 170 3 271 3 601 4 216 4 785 5 269 5 757 6 422 6 734 6 030 6 833 7 469 7 673 8 076 8 514 9 024
Other (minor bulks & other) 9 998 10 023 10 167 10 275 10 729 10 782 11 330 11 186 11 272 10 325 11 504 11 927 12 375 12 952 13 514 13 833
Five main dry bulks 6 896 7 158 7 331 7 852 8 527 9 107 9 745 10 503 11 028 11 400 12 824 13 596 14 691 15 312 16 294 16 685
Source: UNCTAD secretariat, based on data from Clarksons Research (2015b).

a
Estimated
b
Forecast
supply (+2.5 per cent) have combined to offset the Table 1.5. Major producers and consumers
limited growth elsewhere and the decline in import of oil and natural gas, 2014
volumes of the United States and Europe. (world market share in percentage)
In 2014, crude oil imports into the United States
World oil production World oil consumption
declined by nearly 12per cent to reach 4.5million
Western Asia 32 Asia Pacific 34
barrels per day, while imports into China increased by
North America 18 North America 22
9.8per cent (5.6million barrels per day) (Clarksons Transition economies 16 Europe 15
Research, 2015c) in tandem with its growing refinery Developing America 12 Developing America 10
capacity, strategic petroleum reserves requirements Africa 9 Western Asia 9
as well as the supporting effect of lower oil prices. Asia Pacific 9 Transition economies 5
This trend is likely to continue given the expected Europe 3 Africa 4
further growth in Chinas refinery capacity and World natural gas production World natural gas consumption
petroleum reserve requirements. Underpinned by North America 26 North America 26
a rising national refinery capacity, India has over Transition economies 22 Asia Pacific 20
recent years emerged as an important crude oil Western Asia 17 Transition economies 17
importer (Clarksons Research, 2015d). On the Asia Pacific 15 Western Asia 14
export side, members of the Organization of the Europe 7 Europe 13
Petroleum Exporting Countries maintained the Developing America 7 Developing America 8
production levels to retain market share. African Africa 6 Africa 4
crude exports contracted by 4.6 per cent due to Source: UNCTAD secretariat on the basis of data published in
the British Petroleum (BP) Statistical Review of World
technical problems in Angola, infrastructure-related Energy 2015 (June 2015).
disruptions in Nigeria as well as conflicts in Libya. Note: Oil includes crude oil, shale oil, oil sands and natural
An overview of global consumers and producers of gas liquids NGLs the liquid content of natural gas where
this is recovered separately). The term excludes liquid fuels
oil and gas is presented in table 1.5. from other sources as biomass and coal derivatives.
Refined petroleum products (British Petroleum, 2015). Rising import demand

in developing Asia and America was supported by
Developments in refinery capacities can significantly growing power generation, petrochemical and heating
shape crude and product trade patterns. In 2014, demand, as well as expanded regasification capacity
the global refinery capacity increased by 1.4 per in China and India.
cent (British Petroleum, 2015), driven mainly by
growth in Brazil, China, Singapore and Western Major exporters, including Qatar, reduced exports,
Asia. According to UNCTADs estimates, which while others such as Algeria, Australia, Malaysia and
include gas trade, the volume of petroleum products Papua New Guinea recorded increases in export
and gas loaded in 2014 increased by 2.3per cent volumes. Meanwhile, LNG imports into the United
and reached 1.11 billion tons. Meanwhile, data States have been curtailed by the shale revolution.
from Clarksons Research indicate that petroleum However, the country has the potential to eventually
products are estimated to have increased by 1.7per emerge as an important gas exporter (British
cent in 2014 and reached 977 million tons, while Petroleum, 2015).
gas trade increased by 3.9 per cent and totalled Overall, firm global demand for LNG, led by the
319million tons (Clarksons Research, 2015b). Asian economies, is expected to support growth
On the supply side, increasing exports from Western in LNG carrier demand, while environmental
Asia (+6.3per cent), the United States (+4.0per cent) regulations and air emission controls may lead to a
and the economies in transition (+3.6per cent) helped growing role for gas. Some observers predict that
support growth (Clarksons Research, 2015b). Imports LNG volumes will double by 2020, with Australia
into Latin America (+11.8 per cent) and developing emerging as a world leading exporter together with
Asia (other than China) (+6.3per cent) have been the other producers such as the Russian Federation,
main driver of growth. Meanwhile, imports into Africa, the United States, Canada and East Africa (Lloyds
Australia, India, Japan and the Republic of Korea are List, 2015c). These developments will affect
estimated to have remained steady, while imports demand for gas carriers and further shape LNG
into China, the United States and Europe declined trade flows and patterns.
by 25 per cent, 12.5 per cent and 1.5 per cent, Global LPG trade is estimated to have increased by
respectively (Clarksons Research, 2015b). 12.7per cent in 2014 to reach 71million tons. Growth
During recent years, China has moved away from was largely supported by the expansion of shale
being a net importer of oil products. Together, Chinas production in the United States and LPG exports
domestic oversupply of petroleum products, growing (Clarksons Research, 2015a). Imports of LPG into
refinery capacity and reduced national demand have China and India remained firm and contributed to
contributed to reducing import needs and increasing raising long-haul trades and helping absorb more gas
exports. Refinery capacity in Western Asia has carrier capacity (Clarksons Research, 2015a).
also been on the rise, reflecting growing domestic
requirements as well as export needs. Although the (b) Dry cargo trade: Major and minor dry
capacity growth was limited in the United States, bulks and other dry cargo
throughput increased by 3.5 per cent, taking the
The import demand of emerging developing
countrys global share to over 20 per cent in 2014
economies, in particular China and India,
(British Petroleum, 2015).
remained the main driver of growth in dry bulk
Natural gas and liquefied gases cargo shipments in 2014. During the year, the
increase in world seaborne dry bulk shipments
Liquefied natural gas (LNG) increased its share of global was estimated at 5.0 per cent, a slower rate than
gas trade carried by sea in 2014. Volumes increased the previous four years (Dry Bulk Trade Outlook,
by 2.5per cent, taking the total to 333.3billion cubic 2015a). Growth was underpinned by the strong
metres. Growth was driven by higher import demand expansion in iron ore trade (+12.4 per cent) which
in China, India, the United Kingdom, Brazil and accounted for about 30.0 per cent of all dry bulk
Mexico. Japan, the largest world importer, increased cargo and reached 1.34 billion tons. In contrast,
imports by 1.4per cent, while the Republic of Korea, coal trade shipments were estimated to have
the second largest importer, recorded a decline of increased by a modest 2.8per cent, a much slower
5.7 per cent as inventory restocking was completed rate than the double-digit growth recorded in 2012
(+12.3 per cent). Shipments of the five major bulk Table 1.6. Some major dry bulks and steel:
commodities increased by 6.5 per cent, while the Main producers, users, exporters
volume of minor bulk commodities is estimated to and importers, 2014 (world market
have increased by 2.0per cent, reaching 3.1billion shares in percentages)
tons and 1.43 billion tons, respectively. Exports of
dry bulk commodities such as bauxite, nickel ore, Steel producers Steel users
iron ore and coal were constrained by, among other China 50 China 46
factors, bans on mining activities, restrictions on Japan 7 United States 7
exports, weather patterns, regulatory measures United States 7 India 5
and policies seeking to promote national producers
India 5 Japan 4
and industries. An overview of global producers and
users of steel as well as importers of select major Republic of Korea 4 Republic of Korea 4
dry bulk commodities is presented in table1.6. Russian Federation 4 Russian Federation 3
Germany 3 Transition economies 3
Iron ore shipments
Turkey 2 Germany 3
Supported by increased production and exports Brazil 2 Turkey 2
from Australia, seaborne iron ore trade is estimated
Ukraine 2 Mexico 1
to have grown by 12.4 per cent, taking the total to
Other 15 Other 22
1.34 billion tons in 2014 (Dry Bulk Trade Outlook,
2015a). While growth in Chinas steel production Iron ore exporters Iron ore importers
decelerated in 2014 (World Steel Association, 2015), Australia 54 China 68
its iron ore imports remained robust due to lower Brazil 25 Japan 10
international iron ore prices and the ample supply from
South Africa 5 Europe 9
Australia. The cheaper and higher quality imported
Canada 3 Republic of Korea 6
iron ore displaced domestic supply. There are
significant concerns, however, about the long-term Sweden 2 Other 7
developments in Chinas steel industry and related Other 12
implications for dry bulk shipping. On the positive side Coal exporters Coal importers
for shipping, the increased Indian import demand may
Indonesia 34 China 20
indicate the potential of India to further rely on iron ore
Australia 31 Europe 19
imports to support its growing steel production sector.
Indias iron ore imports are currently expected to grow Russian Federation 9 India 18
by 23per cent in 2015. Colombia 6 Japan 15
Shipments from Australia are estimated to have South Africa 6 Republic of Korea 11
increased by 24.2 per cent and accounted for over Canada 3 Taiwan Province of China 5
half of global iron ore exports in 2014. Exports from Other 12 Malaysia 2
Brazil, which accounted for 25.3per cent of world iron Thailand 2
ore shipments, increased by 5.4 per cent. Exports
Other 9
from Sierra Leone grew by approximately 51.0 per
cent to reach 18.1 million tons despite the negative Grain exporters Grain importers
impact of the Ebola outbreak on mining activities (Dry United States 26 Asia 33
Bulk Trade Outlook, 2015b). European Union 14 Africa 21
Looking forward, while, in the short term, iron ore Ukraine 10 Developing America 20
shipments are expected to continue to grow, concerns Canada 9 Western Asia 19
relating to a slowdown of Chinas steel industry and Argentina 8 Europe 5
import demand are causing uncertainty in the outlook
Russian Federation 8 Transition economies 2
for bulk carrier demand. Additionally, while lower iron
ore prices stimulated iron ore trade in 2014, the sharp Others 25
fall in prices raises concerns about the ability of some Sources: UNCTAD secretariat, based on data from World Steel
Association, 2015; Dry Bulk Trade Outlook (May
miners to continue production at a loss (Trimmel, 2015a); Clarksons Research (2015b); and International
2015). Grains Council, Grains Market Report, June 2015.
Coal shipments have increased by 11.1per cent in 2014 and totalled

430 million tons (Dry Bulk Trade Outlook, 2015a).
Growth in world coal shipments (thermal and coking) Other exporters including Australia and Argentina
decelerated to 2.8 per cent with total volumes recorded flat growth rates or contractions in export
estimated at 1.2 billion tons. Thermal coal exports, volumes during the crop year 2013/2014.
which accounted for over two thirds of coal trade in
2014, are estimated to have increased by 3.8per cent Japan, the top world importer, imported less grain
and reached 950million tons. Coking coal shipments (-1.3per cent), while China, the second world importer,
fell marginally (0.8per cent) to 262million tons, owing increased its imports, in particular of soybeans
mainly to reduced import demand from China (Dry Bulk (+16.4 per cent). The strong demand from China
Trade Outlook, 2015a). will continue to support soybean export shipments
from developing America. Other grain importers such
China was the main engine fuelling the rapid expansion as Algeria, Indonesia, the Islamic Republic of Iran,
of world seaborne coal trade over the past decade, with Mexico and Saudi Arabia increased their imports,
its share of global coal shipments reaching 20.0per cent while the economies in transition Brazil, Colombia,
in 2014, up from 2.0 per cent in 2005. An estimated Morocco and Tunisia reduced their imports, given
10.0per cent drop in Chinas coal imports in 2014 may ample domestic supply.
have a significant impact on dry bulk shipping demand.
Factors contributing to the drop in Chinas imports Bauxite, alumina and phosphate rock
include, among others, the falling import demand, Bauxite trade continues to face uncertainty due to
which reflects Chinas regulations on saleable coal Indonesias export restrictions, introduced in January
use, a slowdown in steel production, coal import taxes 2014. Global bauxite and alumina trade volumes are
and quality limits, efforts to protect the domestic coal estimated to have contracted by 24.5per cent in 2014
mining industry, hydroelectric power production and to reach 105million tons. Chinas import volumes of
government initiatives to reduce air pollution. bauxite contracted by over half in 2014, a stark contrast
Elsewhere, imports into the European Union have with the 79.0per cent increase of 2013, when refiners
also dropped and are expected to further depress as stockpiled the mineral in anticipation of the export ban
member States comply with the Large Combustion Plant (Dry Bulk Trade Outlook, 2015a). Indonesia used to
Directive (European Commission, 2001). The Directive be the largest exporter of bauxite to China. However,
contributed to reducing coal emissions by 5.0per cent with the application of the export restrictions, China is
between 2008 and 2013, as some stations have already increasingly sourcing its imports from Malaysia. In the
been closed (Jones and Worthington, 2014). Reflecting meantime, Australia has the potential to emerge as an
its growing steel production, Indias coking coal imports important supplier.
are estimated to have grown by 24.3 per cent, while In 2014, global shipments of phosphate rock are
thermal coal imports grew by 7.1per cent. On the export estimated to have increased by 7.2per cent, taking the
side, total thermal coal exports from Indonesia dropped total volume to 30 million tons. World phosphate rock
by 1.7 per cent, while exports from the United States production declined by 2.2per cent, with contractions
fell by 33.7per cent, owing in particular to rising mining in output in China and the United States being to some
production costs, lower international coal prices and, extent offset by increased production in Morocco.
generally, weaker global demand. Coking coals exports Global production capacity is projected to grow owing
from the main exporters, including Canada, the Russian to expansions in existing mines in Jordan, Kazakhstan,
Federation and the United States, also declined in 2014, Morocco, Peru, the Russian Federation and Tunisia.
with the exception of exports from Australia (+3.6 per World consumption of phosphorus pentoxide (P2O5)
cent) (Dry Bulk Trade Outlook, 2015a). from phosphate rock is also projected to increase, with
the largest growth occurring in Asia and developing
Grain shipments
America. These trends are likely to drive up shipments
Reflecting improved weather conditions and harvest of phosphate rock and shape the associated flows and
recovery in key exporters including Canada, the trade patterns.
European Union, Ukraine and the United States, and,
Dry cargo: Minor bulks
in the case of the Russian Federation, a favourable
exchange rate, global grain shipments (including Growth in global shipments of minor bulk commodities
wheat, coarse grain and soybean) are estimated to are estimated to have decelerated to 1.8 per cent in
2014, with total volumes reaching 1.43 billion tons. journeys (peak legs) of the major EastWest trans-
Manufactures (steel and forest products) accounted Pacific and AsiaEurope trade lanes. Partly reflecting
for 41.9 per cent of the total followed by metals and the recovery in the United States and the improved
minerals (35.4 per cent) and agribulks (22.8 per cent). prospects for Europe, containerized trade volumes
While manufactures and agribulks each increased by carried on the AsiaEurope and trans-Pacific peak
6.0per cent in 2014, metals and minerals declined by legs are estimated to have increased by 7.5per cent
3.0 per cent (Dry Bulk Trade Outlook, 2015a). Growth and 6.3 per cent respectively (Clarksons Research,
in manufactures reflected the firm increase in Chinese 2015e). In comparison, and reflecting a weaker import
steel production and export growth supported by a tax demand in Asia, trade volumes on backhaul journeys
rebate on some products as well as weaker domestic remained weak. Weaker demand for imports from
steel demand. Exports of metals and minerals were Europe and North America does not necessarily reflect
constrained by reduced Indonesian exports of nickel ore a drop in the overall import demand, as imports into
following the implementation of the export ban in January Asia often include waste and other residual products.
2014. Chinas nickel ore imports are increasingly sourced Volumes on the westbound leg of the trans-Pacific
from the Philippines, which have come to dominate the route contracted while shipments on the eastbound
international nickel ore market in the past year. The leg of the AsiaEurope trade route increased only
drop in metals and minerals is also reflective of the fall in marginally (see table 1.7 and figure 1.6 (b)).
anthracite shipments resulting from a drop in Viet Nams
The recovery on the mainlane EastWest routes
exports (Clarksons Research, 2015a).
does not, however, reveal the changing patterns of
global demand. The total mainlane container trade
Other dry cargo: Containerized trade
is estimated to have grown by 9.0per cent between
In 2014, global containerized trade was estimated 2007 and 2014 while trade volumes on the non-
to have increased by 5.3 per cent and reached mainlane trades are said to have expanded by 45per
171 million TEUs (see figure 1.6 (a)). Global growth cent during the same period. Consequently, the share
was boosted by the recovery on the headhaul of world trade held by the mainlane trades fell from
Figure 1.6 (a). Global containerized trade, 19962015 (million TEUs and percentage annual change)
200 20
Million TEUs (left) Percentage annual change (right)
180
15
160
140
10
120
100 5
80
0
60
40
-5
20
0 -10
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: UNCTAD secretariat, based on Drewry Shipping Consultants, Container Market Review and Forecast 2008/2009; and
Clarksons Research, Container Intelligence Monthly, various issues.
Figure 1.6 (b). Estimated containerized cargo flows on major EastWest container trade routes (million TEUs),
19952014
25
20
15
10
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Trans-Pacic 8 8 8 8 9 11 11 12 13 15 16 18 19 19 17 19 19 20 22 22
EuropeAsiaEurope 4 5 5 6 6 7 7 8 11 12 14 16 18 19 17 19 20 20 22 23
Transatlantic 3 3 4 4 4 4 4 4 5 5 6 6 6 6 5 6 6 6 6 7
Source: UNCTAD secretariat, based on the Global Insight Database as published in Bulletin Fal, 288(8/2010) (International maritime
transport in Latin America and the Caribbean in 2009 and projections for 2010), United Nations Economic Commission for
Latin America and the Caribbean (ECLAC). Data for 2009, 2010, 2011, 2012, 2013 and 2014 are based on table1.7.
Figure 1.6 (c). Distribution of global containerized trade by route, 2014 (percentage share of global trade
in TEUs)
Intraregional Mainlane
and East-West
South-South 30%
40%
Secondary
East-West
13%
North-South
17%
Source: UNCTAD secretariat, based on Clarksons Research (2015e); and Lloyds List Data Hub Statistics, various issues.
Table 1.7. Estimated containerized cargo flows on major EastWest container trade routes, 20092014
(million TEUs and percentage annual change)
Transpacific Europe Asia Transatlantic
AsiaNorth North America EuropeNorth North America

AsiaEurope EuropeAsia
America Asia America Europe
2009 10.6 6.1 11.5 5.5 2.8 2.5
2010 12.3 6.5 13.3 5.7 3.2 2.7
2011 12.4 6.6 14.1 6.2 3.4 2.8
2012 13.1 6.9 13.7 6.3 3.6 2.7
2013 13.8 7.9 14.3 6.9 3.6 2.7
2014 14.7 7.5 15.4 7.0 3.9 2.7
Percentage change
6.3 -4.5 7.5 1.3 8.3 0.0
20132014
Source: UNCTAD secretariat, based on data from MDS Transmodal as published in Lloyds List Data Hub Trade Statistics; and
Containerisation International, various issues. Data for 2013 and 2014 are sourced from Clarksons Research, Container
Intelligence Monthly, 17(4), May 2015.
36.0per cent in 2007 to 30.0per cent in 2014. At the steaming in container shipping continued and appears
same time, intraregional (led by intra-Asian trade) and to be the norm as there is no outright increase in vessel
SouthSouth trade accounted for 40per cent of global speeds (ShippingWatch, 2014). In the meantime,
containerized volumes in 2014, followed by flows on the shipowners continue to order very large container ships,
mainlane EastWest (30per cent), NorthSouth (17per as illustrated by the very recent ordering of 11 second-
cent) and secondary EastWest trade routes (13 per generation Triple-E container vessels with a capacity of
cent) (Clarksons Research, 2015f) (figure1.6 (c)). 19,630 TEUs each (Lloyds List, 2015d).
Other relevant developments affecting containerized Operators on the Far East to Europe trade route
trade in 2014 included continued overcapacity, the continued to pursue lower costs through vessel sharing
cascading effect (ship capacity moved from main/ arrangements and by deploying very large container
artery lanes to secondary routes), the uncertainty about ships. Four key alliances are now in operation and include
the future of slow steaming (see also section B.1) and 2M, the Ocean Three, the G6 and the CKYHE. The exact
the alignment of major container ship operators in four impact of this new alignment of the major container ship
mega-alliances. operators has yet to be fully assessed. Meanwhile,
The oversupply of container ship capacity remained shippers are advocating greater scrutiny and the need
a challenge given, in particular, the current cascading to conduct reviews to determine how the alliances are
effect and related implications for port infrastructure impacting on the industry. In this respect, European
requirements, the configuration of shipping services (direct shippers have launched an initiative to carry out a wide
versus trans-shipments), and earnings and profitability industry survey and a review of the implications of the
on the routes where ships were redeployed. There were mega-vessel sharing agreement (JOC staff, 2015).
also concerns about the continued dominance of very
large vessels in the container ship order book and the
mismatch between the delivery of high-capacity vessels
C. SUSTAINABLE AND RESILIENT
and the pattern of global demand growth. MARITIME TRANSPORT SYSTEMS
Initially implemented in response to higher oil and bunker The year 2015 is a milestone for sustainable
fuel prices, slow steaming helped manage oversupply development. With the international community
in container shipping. Slow steaming is estimated to currently elaborating a post-2015 development
have resulted in the employment of 1.3million TEUs, the agenda, there is a renewed opportunity to strengthen
equivalent of 7.0per cent of the global container fleet the international commitment to sustainable
capacity (Ship & Bunker, 2014b). Despite the recovery development and consider how best to mainstream
on the main EastWest trade lanes and the lower sustainability principles across all economic sectors,
oil prices and bunker fuel costs, the practice of slow including maritime transport.
With over 80 per cent of world merchandise trade providing recommendations on sustainable transport
being carried by sea, maritime transport remains the that are actionable at global, national and local as well
backbone of international trade and globalization. as sectoral levels, the High-Level Advisory Group is
Equally, the sector is a key enabling factor for other expected to publish a report on the global transport
sectors and economic activities such as marine outlook and convene the first international conference
equipment manufacturing, maritime auxiliary on sustainable development in 2016.
services (for example, insurance, banking, brokering,
Against this background the following sections
classification and consultancy), fisheries, tourism
highlight selected relevant issues that lie at the interface
and the offshore energy sector, as well as other
of maritime transport and sustainable development.
marine-based industries such as shipbuilding and
ship demolition. In this context, sustainable maritime
transport systems entail, among other factors, 1. Factors driving sustainability in
transport infrastructure and services that are safe, maritime transport
socially acceptable, universally accessible, reliable,
affordable, fuel-efficient, environmentally friendly, low Efforts to improve the energy-related, environmental
carbon and climate-resilient. and social performance of the maritime transport
sector are largely driven by regulation, including in
Achieving greater sustainability in transport, including
particular rules adopted under the auspices of IMO.
maritime transport, has long been recognized as a key
Sustainability and resilience-motivated regulations
development objective, including in the context of the
span a broad range of issues and include safety
1992 Earth Summit, the United Nations Conference
(accidents), security (regulatory measures and piracy),
on Sustainable Development, UNCTAD XIII, the third
marine pollution (for example, oil spills, ballast water,
International Conference on Small Island Developing
garbage and ship paint), labour conditions (seafarers
States (SIDS), the second United Nations Conference on
rights and working conditions), air pollution (SOx) and
Landlocked Developing Countries, and, more recently,
nitrogen oxides (NOx)), as well as GHG emissions.
the United Nations General Assembly resolution on
the Role of transport and transit corridors in ensuring Market requirements and growing customer demands
international cooperation, stability and sustainable for greater corporate social responsibility in global
development (A/RES/69/213). Additional momentum supply chains, transparency, agility, reliability and
is also generated by the work carried out by the United lighter environmental footprints are also increasingly
Nations Secretary-General High-Level Advisory Group driving significant changes in the maritime transport
on Sustainable Transport. Established with a view to industry. Customers across supply chains are
Box 1.1. Examples of voluntary self-regulation in shipping

The Clean Cargo Working Group has developed tools and methodologies to help understand and manage sustainability
impacts. Relevant measures include average trade lane emissions data that can be used for a benchmarking of carriers
performances based on their carbon emissions, as well as for more informed decisions by both carriers and shippers
(Business for Social Responsibility, 2014).
The World Ports Climate Initiative, under the International Association of Ports and Harbors (IAPH): The 50 participating
ports in the Initiative are engaged in reducing GHG emissions from their activities, including by influencing the
sustainability of supply chains. For example, the Environmental Ship Index aims to identify seagoing ships that have
better performance in terms of reducing air emissions, and includes a reporting scheme on GHG emissions from ships.
The Environmental Ship Index can be used to promote clean ships (IAPH, 2015a).
IAPH Air Quality and Greenhouse Gas Tool Box, and work relating to climate adaptation in ports such as the Climate
Protection Plan Development (IAPH, 2015b).
The Sustainable Shipping Initiative brings together leading companies from across the industry and around the world
with a view to a sustainable future. Relevant activities include the launch of the Case for Action report in 2011, and
efforts to promote greater uptake of sustainable shipping rating schemes to provide transparency and comparability
and to enable cargo owners, charters and shipowners to integrate sustainability into commercial decisions (Sustainable
Shipping Initiative, 2015).
Charterers representing 20per cent of global shipped tonnage are adopting policies to avoid using inefficient ships
based on their GHG emissions performance (International Transport Journal, 2015).
increasingly expecting transportation service total annual transport infrastructure investments

providers, including maritime transport service are allocated to OECD countries (Partnership on
providers, to act as strategic partners that can help Sustainable Low Carbon Transport, 2015).
them achieve economic benefits as well as value
A well-articulated transport infrastructure vision
for the environment and society (Business for Social
and a long-term plan that also seeks to close the
Responsibility, 2010).
infrastructure gap in maritime transport should be
In response to the growing demands both at the pursued as matters of priority. Such efforts should be
regulatory and the market levels the maritime based on a careful coordination of the social, economic
transport industry is increasingly, in addition to and physical development of maritime transport
regulation and mandated measures, taking voluntary systems. Maritime transport infrastructure developers,
measures and adopting private self-regulation to investors and managers should mainstream
integrate sustainability and resilience principles into sustainability and resilience criteria into their broader
activities, policies and decisions. Box 1.1 illustrates transport development plans at the early stages of the
some examples of actions taken at the industry level relevant decision-making and investment processes.
both in response to as well as in anticipation of greater As maritime transport infrastructure such as ports
demands for improved performances in terms of have long life cycles, not accounting for the long-
sustainability and resilience. term sustainability and resilience including climate
resilience requirements, may involve costly retrofitting
2. Access, connectivity and of equipment and infrastructure and adjustment of
operations and services.
infrastructure
The strategic importance of maritime transport

3. Energy and transport costs
infrastructure and services for market access, globalized
As discussed in section B.1, the heavy reliance
production, trade competitiveness, employment,
of maritime transport on fossil fuels for propulsion
income generation, poverty reduction and social
enhances the exposure of freight rates and transport
progress cannot be overemphasized. Consequently,
costs to high oil price volatility. Although the mid-2014
for many developing countries, addressing the physical
drop in oil and bunker fuel prices may be a welcome
and non-physical barriers such as infrastructure issues
development, the effect is likely to be short-lived, given
(for example, insufficiency, inadequacy, congestion
the projected growth in the global energy demand and
and maintenance requirements), missing links and
the risk of rapid cuts in oil production due to reduced
interoperability of, for example equipment, vehicles,
investment in the oil extractive and refining industries.
technologies and standards, is key.
An assessment of the effect of oil prices on maritime
However, the transport infrastructure gap remains
freight rates, including for containerized goods, iron ore
a significant challenge in many developing regions.
and crude oil, reveals that rates and therefore transport
Global transport infrastructure needs have been
costs in all three market segments were sensitive to a
estimated at $11 trillion over the period 2009
rise in oil prices, albeit at different degrees (UNCTAD,
2030 (OECD, 2011). Meanwhile, the infrastructure
2010). For containerized trade, the estimated elasticity
gap in developing countries, including transport
ranges between 0.19 and 0.36; a similar elasticity is
infrastructure, is significant. In the Latin America and
estimated for crude oil cargo 0.28. For iron ore,
the Caribbean region for example, investment needs
on the other hand, the elasticity is estimated to be
required annually to meet infrastructure demand for
much larger, approximately equal to unity. Developing
the period 20122020 are estimated at 6.2per cent
countries are already facing disproportionately higher
of GDP, or some $320billion (ECLAC, 2014).
transport costs, with UNCTAD estimating the 2013
To close the gap on the large infrastructure deficit average freight costs as a share of imports value
in developing countries, including in transportation, at close to 7.0 per cent for developed economies,
existing estimates indicate that spending must reach 10.0per cent for developing economies and 8.0per
$1.8 trillion$2.3 trillion per year by 2020 compared cent for the world average. The negative implications
with the current levels of $0.8 trillion$0.9 trillion of volatile oil and fuel costs for economies sustainable
per year (United Nations Development Programme development can be significant given the potential
(UNDP), 2013). Currently 60 per cent of estimated impact on transport costs, affordability of services
and trade competitiveness. Greater sustainability in infrastructure maintenance and management;

maritime transport requires as a matter of priority that rethinking supply-chain designs, including the location
the overdependence on oil-based propulsion systems of production sites; reshaping transport architecture
be effectively addressed (UNCTAD, 2010). Reducing and networks and rerouting trade to ensure the most
exposure to volatility in oil prices and fuel costs though energy-efficient and less carbon-emitting trajectories;
investment in energy efficiency measures, alternative improving cooperation and stakeholder networking;
energy sources and more sustainable operational promoting trade facilitation measures that reduce
and management practices can help control fuel and border delays and inefficiencies; making greater use
transport costs, derive efficiency gains and therefore of information and communications technologies as
enable more effective access to markets and promote well as intelligent transport systems; and promoting
trade competiveness. energy-efficient transport technologies.
The potential benefits of energy efficiency measures
4. Energy, environment and carbon can be significant. The International Energy Agency
emissions considers energy efficiency as the worlds first fuel
and estimates the 2012 global investment markets
In addition to raising transport costs and acting as a in energy efficiency at between $310 billion and
barrier to trade, heavy reliance on oil for propulsion $360 billion (Kojima and Ryan, 2010). A significant
undermines resource conservation objectives and potential for energy efficiency exists in emerging
leads to environmental deterioration through air and economies outside the OECD, with efficiency able
marine pollution and carbon emissions. In 2012, to slash up to $90 billion in global transport-related
carbon dioxide (CO2) emissions from international fuel costs by 2020 while reducing local air pollution.
shipping were estimated at 2.2 per cent of global In maritime transport, key regulatory instruments
CO2 emissions (IMO, 2014a). While the contribution addressing the nexus between energy, air pollution
of international shipping to global carbon emissions and carbon emissions from shipping are the technical
may be relatively low when assessed per unit of cargo and operational measures mandated by IMO in 2011
and distance travelled, these emissions are, however, (IMO, 2015). The relevant requirements include the
likely to grow if left unchecked. Forecast scenarios for Energy Efficiency Design Index (EEDI) and the Ship
the medium term suggest that international shipping Energy Efficiency Management Plan (SEEMP). In
carbon emissions could increase 50250 per cent considering 22 potential ship efficiency measures and
by 2050, depending on economic growth and calculating their aggregated cost effectiveness and
global energy demand. Equally, international freight, reduction potential, one study finds that, by 2020,
including maritime transport, is projected to more than the industrys growing fleet could reduce annual CO2
quadruple by 2050, with associated CO2 emissions emissions by 33 per cent of the projected annual
generated by all modes engaged in the international total (International Council for Clean Transportation,
trade between 2010 and 2050 growing by a factor 2011). Another study investigated 28 energy-saving
of 3.9 (International Transport Forum/OECD, 2015). options and estimated a reduction of CO2 emissions
In this context, locking in fossil fuels and related in shipping by 2030 of more than 50 per cent (Alvik
technologies in freight transport, including maritime et al., 2010). Other relevant measures include those
transport, will perpetuate unsustainable transport relating to the IMO sulphur limits imposed on fuels
patterns. used by ships, globally as well as in designated ECAs
Breaking away from fossil fuel-intensive maritime (see section B).
transport systems and shifting towards greater
sustainability and resilience, including through tailored 5. Climate change impacts, adaptation
and targeted policies, regulations, incentives and and resilience-building
programmes, is an imperative for freight transport,
including maritime. Relevant strategies for the freight Maritime transport is facing the dual challenge of
transport sector include, for example: promoting, climate mitigation and adaptation.1 While future
when feasible and as applicable, a modal shift towards trends in emissions from international shipping remain
more environmentally and less energy-intensive uncertain (subject to international efforts/commitments
modes (maritime, short-sea shipping, waterways to cut GHG emissions and the efforts of IMO and the
and rail); shifting to lower-carbon fuels; promoting twenty-first session of the Conference of the Parties
to the United Nations Framework Convention on be crucial to ensure that any adaptation measures
Climate Change (COP21) and curbing GHG emissions adopted are tailored to reflect the local conditions,
remains an urgent imperative to ensure manageable especially in developing regions. However, to be
global warming levels, the effects of climate variability more effective, enhancing adaptive capacity requires
and change irrespective of the causes are already that actions are also integrated with other policies
being felt in different parts of the world, often in the such as disaster preparedness, land-use planning,
poorest countries with low adaptive capacity. environmental conservation, coastal planning, and
Transport networks and seaports in particular are likely national plans for sustainable development.
to be highly affected by climate change factors given
port location and vulnerability. Climatic factors such 6. Financing sustainable and resilient
as rising water levels, floods, storms, precipitation, maritime transport
extreme weather events and associated risks such
as coastal erosion, inundation and deterioration of Enhancing the sustainability and resilience of
hinterland connections have implications for shipping maritime transport entails some cost implications
volumes and costs, cargo loading and capacity, sailing and calls for additional resources. However, in an
and/or loading schedules, storage and warehousing. era of increasingly constrained national budgets,
With international trade being increasingly multimodal finding innovative ways to mobilize the requisite
and requiring the use of rail, road and waterway sources is critical. New sources and mechanisms and
transport, these impacts will also affect the transport greater private sector involvement such as through
corridors above and beyond the ports acting as publicprivate partnerships is important. In terms of
gateways. innovative financing mechanisms, climate finance
Climate change impacts on maritime transport can could emerge as an important channel for mobilizing
be direct and indirect, that is, by causing changes additional resources, including for maritime transport.
in demand for maritime transport services (Gledhill In this respect, at their June 2015 summit, the Group
et al., 2013). In this respect, one study estimated of Seven leaders reiterated their commitment to the
that in 2005, the exposure of 136 port megacities to Copenhagen Accord to jointly mobilize $100 billion
coastal flooding (population and assets) was $3 trillion per year by 2020, and to make the green climate
(Nicholls et al., 2008). When assuming a sea level fund operational in 2015 (Group of Seven Summit,
rise of half a metre by 2050 (the tipping scenario), the 2015). Some analysts argue that, in connection with
asset exposure (that is, economic assets in the form of climate action, redirecting existing resources towards
buildings, transport infrastructure, utility infrastructure, low-carbon and sustainable uses would be sufficient
physical assets within built infrastructure, vehicles (Vivid Economics, 2014). The argument is as follows:
and other assets) of the same 136 port megacities the best estimate of additional investments required
was projected to be $28 trillion (Lenton et al., 2009). to mitigate and adapt to climate change in developing
A climate-induced port closure or disruption to regions amounts to $400billion$500billion per year
operations can be costly, although, to put things in by 2030. At the same time, overall investment in the
perspective, a comparison with, for example, the same countries increased by more than $3.25trillion
impact of a labour dispute-related port closure can be during the period 20022012. Therefore, redirecting
made. just a fraction of the expected continued growth
in investment towards mitigation and adaptation
Building the climate resilience of maritime transport
action would support the realization of climate and
systems is therefore a precondition for sustainability.
sustainable development objectives (Vivid Economics,
Enhancing understanding and technical knowledge
2014).
among policymakers, transport planners and transport
infrastructure managers of climate change impacts In addition to increasing the levels and diversifying the
on coastal transport infrastructure, services and sources of finance, financing energy-efficient maritime
operations is of the essence. It is equally important to transport systems requires that the key barriers to
strengthen their capacity to take informed decisions investments such as the split incentives involving
and respond with effective, appropriate and well- shipowners and charterers (charters do not share or
designed climate policy and adaptation measures. give back savings to shipowners) be addressed. With
Conducting risk assessments for critical transport investment in ship energy efficiency being generally
infrastructure and facilities, especially in ports, will carried out by shipowners/operators, the costs
associated with leveraging innovative ship energy- can also, in cooperation, for example, with the
efficient technologies and alternative fuels (for example, shipping and port industry, partner to leverage carbon
equipment, hull design, engines, propulsion systems markets to promote energy-efficient technologies.
and operational measures) are part of the overall As has been argued in the case of air transport,
capital costs involved in ordering a ship. Decisions to development banks also have a role to play (World
invest, for example, in eco-ships that save on fuel use Bank/International Bank for Reconstruction and
and reduce air emissions but that are more expensive, Development, 2012). For example, they could support
are made by shipowners/operators who depend energy efficiency measures that apply to maritime
largely on the banking sector to meet their financing transport infrastructure (for example, technologies
requirements. On the positive side, banks are said that support cold ironing in ports) to complement ship
to be increasingly taking into account sustainability energy-efficiency measures.
criteria and ship energy-efficiency performances, in
To sum up, the year 2015 is a milestone for sustainable
particular when making financing decisions. With
development, in which a path for a new international
energy-efficient ships being more likely to have a higher
sustainable development agenda will be set, and a
asset value and a longer lifespan, banks are reported
global climate policy framework adopted. Maritime
to be increasingly favouring investments in sustainable
transport has an important role to play in addressing the
ships such as eco-ships that entail reduced financing
global sustainability and resilience agenda. The sector
risks (including better chartering potential and lower
is thus at a critical juncture as it has an opportunity to
fuel costs) (The Marine Professional, 2015).
assert its strategic importance as an economic activity
Shipping-related market-based instruments could that generates employment and revenue, enables
also be used to help finance investments in energy trade, supports supply chains and links communities;
efficiency. At present and in addition to technical and underscore its potential to generate value in
design standards, the international community, under terms of economic viability as well as social equity,
the auspices of IMO/United Nations Framework resource conservation and environmental protection.
Convention on Climate Change (UNFCCC), is However, for this role to effectively materialize,
considering several instruments to regulate GHG relevant sustainability and resilience criteria need to be
emissions from international shipping, including integrated and mainstreamed into maritime transport
market-based measures such as levies/taxes and planning, policies and investment decisions. Adopting
emission-trading mechanisms. Revenues generated a multi-stakeholder approach involving Governments,
by these instruments could be reinvested in the the maritime transport industry, financial institutions
shipping sector, including with a view to energy and other relevant partners is an overriding imperative
efficiency measures. However, so far agreement on for these efforts to be successful. Equally, collecting,
any international market-based instrument to regulate sharing and disseminating relevant data, including
carbon emissions from international shipping has yet relevant sustainability and performance indicators,
to be achieved. is necessary, as is the need to scale up financing,
enhance capacity-building, share best practices and
Governments have a role to play in supporting private
enable greater use of relevant technologies.
sector investment in energy-efficient technologies
and alternative fuels by creating a favourable climate, Chapter 2 addresses trends in the world merchant
including through fiscal and monetary incentives (for fleet, chapter 4 deals with port-related developments
example, tax breaks and subsidies in support of and chapter 5 considers legal issues and regulatory
energy-efficient technologies, grants or subsidies for developments, each highlighting ways in which the
research and development) and enabling regulatory maritime transport industry can contribute to achieving
and policy frameworks that support innovation and greater sustainability in the maritime transport sector.
facilitate processes and procedures. Governments
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World Steel Association (2015). World crude steel output increases by 1.2% in 2014. January.
ENDNOTES
1
For additional information about the science of climate change and its impacts on transport, including
coastal transport infrastructure, see relevant documentation on UNCTAD work in the field available at
http://unctad.org/en/Pages/DTL/TTL/Legal/Climate-Change-and-Maritime-Transport.aspx.
STRUCTURE,
OWNERSHIP AND
2
REGISTRATION
OF THE WORLD FLEET
The world fleet grew by 3.5per cent during the 12months to 1 January 2015, the lowest annual
growth rate in over a decade. In total, at the beginning of the year, the worlds commercial fleet
consisted of 89,464vessels, with a total tonnage of 1.75billion 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 newbuildings, combined with reduced scrapping activity, newer
tonnage no longer compensated for the natural aging of the fleet.
Greece continues to be the largest ship-owning country, followed by Japan, China, Germany and
Singapore. Together, the top five ship-owning countries control more than half of the world tonnage.
Five of the top 10 ship-owning countries are from Asia, four are European and one is from the Americas.
The Review of Maritime Transport further illustrates the process of concentration in liner shipping.
While the container-carrying capacity per provider per country tripled between 2004 and 2015, the
average number of companies that provide services from/to each countrys ports decreased by
29per cent. Both trends illustrate two sides of the same coin: as ships get bigger and companies
aim at achieving economies of scale, there remain fewer companies in individual markets.
New regulations require the shipping industry to invest in environmental technologies, covering
issues such as emissions, waste, and ballast water treatment. Some of the investments are not
only beneficial for the environment, but may also lead to longer-term cost savings, for example
due to increased fuel efficiency.
Economic and regulatory incentives will continue to encourage individual owners to invest in
modernizing their fleets. Unless older tonnage is demolished, this would lead to further global
overcapacity, continuing the downward pressure on freight and charter rates. The interplay
between more stringent environmental regulations and low freight and charter rates should
encourage the further demolition of older vessels; this will not only help reduce the oversupply
in the market, but also contribute to lowering the global environmental impact of shipping.
A. STRUCTURE OF THE WORLD FLEET Despite the continued economic crisis, the container
ship fleet increased by 5.2per cent in the same period
and thus stands in contrast to the slowdown in global
1. World fleet growth and principal
economic growth. A further increase in the rate of
vessel types containerization may to some extent lead to growing
demand for container-carrying capacity, yet overall during
Responding to the growth in demand (see chapter recent years demand has grown less than supply, leading
1), the world fleet grew by 3.5 per cent during the to a situation of continued oversupply in the container
12 months to 1 January 2015, the lowest annual shipping market, resulting in continued downward
growth rate in over a decade.1 In total, at the beginning pressure on container freight rates (see chapter3).
of the year, the worlds commercial fleet consisted of
89,464 vessels, with a total tonnage of 1.75billion dwt The growth in the offshore and gas tanker segment
(figure2.1 and table2.1). The new tonnage added to surpassed all other vessel types and reflects
the global fleet continued to decline in comparison the expansion of trade in gas and new offshore
with previous years in absolute terms. At the same exploration projects. This development contrasts the
time, the overall growth rate of tonnage was still above slow growth in oil carriers (1.4 per cent). The ferries
that of global GDP and trade growth, and even slightly and passenger vessels fleet expanded by 4.8 per
higher than that of the growth of seaborne trade. cent, indicating positive expectations about demand
in the cruise industry. The overall positive development
The greatest and expanding share in the global fleet
in the market segment of other types also indicates
are dry bulk carriers, which by the beginning of 2015
the further specialization of the global fleet (table 2.1).
had reached a share of 43.5per cent of total capacity;
the result of a 4.4per cent growth rate between 2014 The cyclical nature of shipbuilding is exemplified in
and 2015 and even higher expansion in the years figure 2.3, which illustrates the year the vessels built in
20102013 (figure 2.2). 2014 were contracted. As illustrated in figure 2.4, total
Figure 2.1. Annual growth of the world fleet, 20002014 (per cent of dwt)
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: UNCTAD, Review of Maritime Transport, various issues.

CHAPTER 2: STRUCTURE, OWNERSHIP AND REGISTRATION OF THE WORLD FLEET 31
tonnage delivered in 2014 was only slightly more than new ship and the moment the new ship is delivered to
half the tonnage delivered in 2011, the peak year of the market. Ships are often ordered when the market
the historically largest ever shipbuilding cycle. Several is perceived as strong, only to be delivered years later,
years pass between the placement of an order for a when the market may have become weaker.
Figure 2.2. World fleet by principal vessel types, 19802015 (beginning-of-year figures, percentage share
of dwt)
50
45
40
35
30
25
20
15
10
5
0
1980 1990 2000 2010 2015
Oil tanker 49.7 37.4 35.4 35.3 28.0
Dry bulk 27.2 35.6 34.6 35.8 43.5
General cargo 17.0 15.6 12.7 8.5 4.4
Container 1.6 3.9 8.0 13.3 13.0
Source: UNCTAD secretariat, based on data supplied by Clarksons Research and the Review of Maritime Transport, various issues.
Note: All propelled seagoing merchant vessels of 100 GT and above, excluding inland waterway vessels, fishing vessels, military
vessels, yachts and offshore fixed and mobile platforms and barges (with the exception of floating production, storage and
offloading units (FPSOs) and drillships).
Table 2.1. World fleet by principal vessel types, 20142015 (beginning-of-year figures, thousands of dwt;
percentage share in italics)
Principal types 2014 2015 Percentage change 2015/2014

Oil tankers 482 447 489 388 1.4%
28.6% 28.0%
Bulk carriers 728 322 760 468 4.4%
43.1% 43.5%
General cargo ships 77 507 76 731 -1.0%
4.6% 4.4%
Container ships 215 880 227 741 5.5%
12.8% 13.0%
Other types: 185 306 194 893 5.2%
11.0% 11.1%
Gas carriers 46 335 49 675 7.2%
2.7% 2.8%
Chemical tankers 41 688 42 181 1.2%
2.5% 2.4%
Offshore 69 513 74 174 6.7%
4.1% 4.2%
Ferries and passenger ships 5 531 5 797 4.8%
0.3% 0.3%
Other/n.a. 22 241 23 066 3.7%
1.3% 1.3%
World total 1 689 462 1 749 222 3.5%
100% 100%
Source: UNCTAD secretariat, based on data supplied by Clarksons Research.
Note: Propelled seagoing merchant vessels of 100 GT and above.
Figure 2.3. Contract year for tonnage (dwt) delivered in 2014
25 000
Thousand dwt
20 000
Other
15 000
Container
General cargo
10 000
Dry bulk
Oil tanker
5 000

2000
2006
2007
2008
2009
2010
2011
2012
2013
2014
Year of contract

Note: Propelled seagoing vessels of 100 GT and above.
Figure 2.4. Vessel types of the world fleet, by year of building (dwt as of 1 January 2015)
180
Million dwt
160
140
120
100
80 Other
Container
60
General cargo
40
Dry bulk
20
Oil tanker
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Before 1990
Year built
Table 2.2. Age distribution of the world merchant fleet, by vessel type, as of 1 January 2015 (percentage
of total ships and dwt)
Country grouping 04 59 1014 1519 20 + Average age Average age Change

Types of vessel years years years years years 2014 2015 2015/2014
World:
Ships 47.50 18.68 11.12 11.55 11.15 9.07 9.15 -0.09
Bulk carriers
Dwt 51.88 18.73 10.46 9.94 8.99 8.08 7.98 0.10
Average vessel
80 338 73 728 69 145 63 323 59 290
size (dwt)
World:
Ships 20.94 34.31 17.61 17.55 9.60 10.88 10.70 0.18
Container ships
Dwt 34.88 34.22 16.58 10.18 4.14 8.23 8.19 0.04
Average vessel
74 310 44 487 42 001 25 869 19 235
size (dwt)
World:
Ships 10.68 14.89 7.70 8.96 57.76 24.86 24.18 0.68
General cargo
Dwt 22.09 18.86 10.05 10.17 38.83 17.97 17.76 0.21
Average vessel
8 297 5 388 6 086 4 885 2 758
size (dwt)
World:
Ships 18.74 21.72 12.69 8.32 38.54 18.37 17.92 0.45
Oil tankers
Dwt 29.90 32.59 22.83 10.04 4.64 8.98 8.51 0.47
Average vessel
83 196 78 871 95 231 65 702 6 521
size (dwt)
World:
Ships 16.55 16.87 9.22 8.88 48.48 22.22 21.86 0.36
Others
Dwt 20.41 26.49 12.31 9.16 31.62 15.65 15.30 0.35
Average vessel
6 619 8 547 7 574 5 834 3 962
size (dwt)
World:
Ships 14.94 15.64 8.35 7.96 53.12 20.25 19.89 0.35
All ships
Dwt 38.71 25.50 14.90 9.92 10.97 9.63 9.41 0.22
Average vessel
42 873 30 899 34 042 23 160 6 095
size (dwt)
Developing
economies: Ships 20.28 17.71 8.64 9.24 44.12 19.76 19.43 0.33
All ships
Dwt 41.55 20.45 10.97 10.98 16.05 10.37 10.20 0.17
Average vessel
36 453 21 879 25 241 22 128 6 788
size (dwt)
Developed
economies: Ships 20.20 21.02 12.79 11.24 34.76 18.52 18.17 0.35
All ships
Dwt 37.46 29.00 17.56 9.10 6.88 8.90 8.65 0.25
Average vessel
52 026 39 690 40 847 24 649 7 142
size (dwt)
Countries with
economies in
Ships 7.29 7.71 3.68 4.03 77.30 28.82 28.12 0.70
transition:
All Ships
Dwt 20.21 22.70 15.56 12.57 28.97 15.56 15.03 0.53
Average vessel
17 659 20 706 27 366 20 029 2 398
size (dwt)

Most tonnage delivered in 2014 had been contracted more modern vessels into the peripheral regions
during the previous four years, as well as to some and routes. As these ships tend to be bigger, this
extent in 2008 and 2007. Relatively fewer new orders trend increases the pressure on port infrastructure
were placed in 2009, after the economic slump (figure development in developing countries.
2.3). Thus most current deliveries result from decisions
made after the economic crisis. The continued high 3. Environmental sustainability:
level of growth of container vessels indicates the
Trends in vessel technologies
industrys persistent strategy to realize economies of
scale as well as cost savings, for example through
New regulations (see also chapter 5) require that the
increased energy efficiency.
shipping industry invest in environmental technologies,
The resulting oversupply of tonnage may not be covering issues such as emissions, waste and/or
good news for shipowners. However, it is a positive ballast water treatment. Some of the investments are
development from the perspective of those who not only beneficial for the environment, but may lead
aim at reviving global trade; there is no shortage of to longer term cost savings, for example thanks to
carrying capacity, and as a result trade costs continue increased fuel efficiency.
to decline in the long term (see also chapter 3).
Figure 2.5 illustrates the increasing introduction
of ballast water treatment systems, making use
2. Age distribution of the world of technologies such as ultraviolet, chemical and
merchant fleet filtration systems. Their effectiveness varies according
to factors such as seawater salinity, temperature and
For the first time since the peak of the shipbuilding sediment load (Clarksons Research, 2014a). In 2013
cycle, the average age of the world fleet increased and 2014, more than half of new container ships were
slightly during 2014. Given the delivery of fewer built with such systems. The share was lower, albeit
newbuildings, combined with reduced scrapping also growing, in other vessel types.
activity, newer tonnage no longer compensated for Emissions from maritime transport are of increasing
the natural aging of the fleet (table 2.2). As overall concern. More stringent measures have been adopted
growth rates have been slowing down for the third by IMO in relation to SOx and NOx. As regards SOx,
consecutive year, the current aging of the fleet is there exist new global limits, as well as more stringent
a natural phenomenon of the concluding shipping limits in ECAs in Europe and North America.
cycle and will accelerate over the next few years.
However, the current fleet is significantly younger As regards technologies, there are three main methods
than a decade ago. Average values somewhat hide of compliance with the SOx regulations. These are (a)
that the low average fleet age is largely the result of low sulphur fuels such as marine gas oil; (b) scrubber
newbuildings in the dry bulk and container sector, technology for the after-treatment of exhaust gas
while the age of other vessel types continues to that uses seawater to wash out SOx; (c) alternative
increase. The average age of other vessels is fuels, notably LNG, and potentially also biofuels and
double that of the two previously mentioned sectors. methanol.
The solution an owner chooses for will depend on
The distribution is also not equal across regions,
a range of factors, including the amount of time
countries and shipping routes. A central driver for
spent in ECAs, the ships fuel consumption and
these differences is the cascading effect induced
its age. Scrubber systems reportedly cost in the
by overcapacity in the main trade lanes, which
range of $2 million$4 million per vessel (Clarksons
shifts older and often smaller vessels to secondary
Research, 2014b) and it is expected that the majority
routes. Also, new environmental regulations push
of shipowners will switch to marine gas oil in the short
older tonnage into regions with less restrictive
term. Only for ships operating mostly in ECAs will
regimes. Peripheral and less developed regions,
scrubbers become more economic, as they enable
and particularly services between these, already
the use of standard heavy fuel oil, which is cheaper
tend to be those with the oldest and potentially
than low sulphur fuel alternatives.
less environmentally friendly fleets. Hence, the
cascading effect actually has a positive impact from Data on vessel newbuildings suggests that the
an environmental perspective, as it pushes relatively majority of ships will meet new limits for ECAs by
Figure 2.5. Share of newbuildings (number of ships) with ballast water treatment systems, by main vessel
type, 20072014
60%
Container
50%
40%
30%
Oil tanker
20%
All ships
Dry bulk
10%
0%
2007 2008 2009 2010 2011 2012 2013 2014

Note: Propelled seagoing merchant vessels of 1,000 GT and above.
switching to low sulphur fuels such as marine gas oil B. OWNERSHIP AND OPERATION OF
in the short term. A small share of the existing fleet and
the order book is reported to have scrubbers installed. THE WORLD FLEET
In particular, ships that spend a lot of time in ECAs find
the installation of scrubbers convenient. In the longer 1. Ship-owning countries
term, as global SOx limits are further tightened, it can
be expected that more scrubbers will be installed Greece continues to be the largest ship-owning
rather than opting for the short-term solution of using country, accounting for more than 16 per cent of
marine gas oil (Clarksons Research, 2014b). the world total, followed by Japan, China, Germany
and Singapore. Together, the top five ship-owning
Using LNG as fuel is another option to reduce countries control more than half of the world tonnage
emissions. In March 2015, only 178 ships were LNG (dwt) (table 2.3). Five of the top ten ship-owning
fuelled or capable of running on LNG, most of which countries are from Asia, four are European, and one
were LNG carriers themselves (Clarksons Research, (the United States) is from the Americas.
2015a). Nevertheless, the share of tonnage using
LNG as fuel is increasing, and as regulations on Over the last decade, China, Hong Kong (China), the
emissions become more stringent, this growth can Republic of Korea and Singapore have moved up in
be expected to continue in the longer term. The use the ranking of largest ship-owning countries, while
of LNG as fuel will also depend on the installation of Germany, Norway and the United States have a lower
the corresponding bunkering infrastructure. Currently, market share today than in 2005.
the infrastructure is lacking, with only sparse coverage In South America, the largest ship-owning country (in
of LNG fuelling stations, mostly located in Northern dwt) continues to be Brazil, followed by Mexico, Chile
Europe (Morgan Stanley, 2013). and Argentina. The African country with the largest
Table 2.3. Ownership of the world fleet, as of 1 January 2015 (dwt)
Number of vessels Dead-weight tonnage
Foreign Total as
Rank Country/territory National Foreign
Total National flag Foreign flag Total flag as a % a%
(dwt) of ownership flag flag
of total of world
1 Greece 796 3 221 4 017 70 425 265 209 004 526 279 429 790 74.80% 16.11%
2 Japan 769 3 217 3 986 19 497 605 211 177 574 230 675 179 91.55% 13.30%
3 China 2 970 1 996 4 966 73 810 769 83 746 441 157 557 210 53.15% 9.08%
4 Germany 283 3 249 3 532 12 543 258 109 492 374 122 035 632 89.72% 7.04%
5 Singapore 1 336 1 020 2 356 48 983 688 35 038 564 84 022 252 41.70% 4.84%
6 Republic of Korea 775 843 1 618 16 032 807 64 148 678 80 181 485 80.00% 4.62%
7 Hong Kong, China 727 531 1 258 56 122 972 19 198 299 75 321 271 25.49% 4.34%
8 United States 789 1 183 1 972 8 731 781 51 531 743 60 263 524 85.51% 3.47%
9 United Kingdom 477 750 1 227 12 477 513 35 904 386 48 381 899 74.21% 2.79%
10 Norway 848 1 009 1 857 17 066 669 29 303 873 46 370 542 63.20% 2.67%
Taiwan Province of
11 117 752 869 4 681 240 40 833 077 45 514 317 89.71% 2.62%
China
12 Bermuda 5 317 322 289 818 41 932 611 42 222 429 99.31% 2.43%
13 Denmark 392 538 930 15 286 153 20 893 511 36 179 664 57.75% 2.09%
14 Turkey 576 954 1 530 8 321 506 19 366 264 27 687 770 69.95% 1.60%
15 Monaco 260 260 23 929 323 23 929 323 100.00% 1.38%
16 Italy 596 207 803 15 961 983 6 040 199 22 002 182 27.45% 1.27%
17 India 697 147 844 14 546 706 7 268 449 21 815 155 33.32% 1.26%
18 Brazil 228 163 391 3 150 493 17 308 798 20 459 291 84.60% 1.18%
19 Belgium 87 156 243 7 302 545 12 787 196 20 089 741 63.65% 1.16%
20 Russian Federation 1 291 448 1 739 5 920 435 12 403 644 18 324 079 67.69% 1.06%
Islamic Republic
21 157 70 227 3 986 804 14 093 340 18 080 144 77.95% 1.04%
of Iran
22 Switzerland 47 291 338 1 403 668 16 492 768 17 896 436 92.16% 1.03%
23 Indonesia 1 504 153 1 657 12 908 577 4 120 935 17 029 512 24.20% 0.98%
24 Netherlands 775 445 1 220 6 589 901 10 415 708 17 005 609 61.25% 0.98%
25 Malaysia 466 142 608 8 430 359 7 707 526 16 137 885 47.76% 0.93%
United Arab
26 95 684 779 472 967 14 845 550 15 318 518 96.91% 0.88%
Emirates
27 Saudi Arabia 86 155 241 2 004 631 11 358 349 13 362 980 85.00% 0.77%
28 France 180 277 457 3 517 344 7 636 312 11 153 656 68.46% 0.64%
29 Cyprus 141 179 320 3 811 947 6 858 661 10 670 608 64.28% 0.62%
30 Viet Nam 786 92 878 6 527 639 1 510 645 8 038 284 18.79% 0.46%
31 Kuwait 42 27 69 5 293 213 2 462 656 7 755 869 31.75% 0.45%
32 Canada 209 139 348 2 743 006 5 004 054 7 747 060 64.59% 0.45%
33 Oman 6 31 37 5 842 7 008 489 7 014 331 99.92% 0.40%
34 Sweden 101 234 335 1 248 460 5 194 955 6 443 415 80.62% 0.37%
35 Qatar 56 70 126 888 093 5 471 554 6 359 647 86.04% 0.37%
Total top 35 ship-owning
18 410 23 950 42 360 470 985 656 1 171 491 033 1 642 476 689 71.32% 94.69%
countries
All others 2 962 2 486 5 448 35 004 138 51 845 622 86 849 760 59.70% 5.01%
Unknown country of
717 5 234 918 0.30%
ownership
WORLD TOTAL 48 525 1 734 561 367 100.00%
Source: UNCTAD secretariat, based on data supplied by Clarksons Research. For a complete listing of nationally owned fleets,
see http://stats.unctad.org/fleetownership.
fleet ownership is Angola, followed by Nigeria and in Europe (Denmark, Switzerland and France), while
Egypt (see also the extended data available online most other carriers among the top 20 are based in
for all ship-owning countries under UNCTADstat Asia and one company in South America (Compaa
fleet ownership database http://stats.unctad.org/ Sudamericana de Vapores (CSAV)), headquartered
fleetownership. in Santiago; the company has recently merged with
Hapag Lloyd (headquartered in Germany) (table 2.4).
China, Indonesia and the Russian Federation have a
Note that about half of the ships operated by the liner
large number of nationally flagged and owned ships,
companies are not owned by them, but are chartered
which are largely employed in coastal or inter-island
from the shipowner, who is likely to be from a third
shipping. These markets tend to be protected from
country, for example Germany or Greece.
foreign competition and do not necessarily fall under
global IMO regulations. Ships deployed on these Concentration in the sector continues to increase
services tend to be smaller and older than the fleet and the recent mergers of CSAV and Hapag Lloyd,
deployed on international routes. and Compaa Chilena de Navegacin Interocenica
and Hamburg Sd, have contributed further to this
2. Container ship operators development. In the beginning of 2015, the top ten
companies operated over 61 per cent of the global
Together, the three largest liner shipping companies, container fleet and the top 20 controlled 83per cent
that is, those companies that operate the container of all capacity. All companies with vessels on order are
ships deployed on regular services, have a share of investing in larger vessels, as the average vessel size
almost 35per cent of the world total container-carrying of the order book is in all cases larger than the current
capacity. The top three companies are headquartered average container-carrying capacity.
Table 2.4. The 50 leading liner companies, 1 May 2015 (Number of ships and total shipboard capacity
deployed, ranked by TEU)
Market share Average Orderbook Orderbook Average vessel

Rank Operator TEU Vessels
% (TEU) vessel size TEU vessels size orderbook
1 Maersk Line A/S 13.45 2 526 490 478 5 286 91 080 9 10 120
Mediterranean Shipping
2 13.22 2 483 979 451 5 508 498 680 36 13 852
Company (MSC) SA
3 CMA CGM S.A. 8.00 1 502 417 375 4 006 182 500 16 11 406
Evergreen Marine
4 Corporation (Taiwan) 5.08 954 280 204 4 678 354 000 23 15 391
Limited (Evergreen Line)
COSCO Container Lines
5 4.55 854 171 158 5 406 119 500 10 11 950
Limited (COSCON)
China Shipping
6 Container Lines 4.00 751 507 136 5 526 19 100 1 19 100
Company Limited
Hapag-Lloyd
7 3.90 732 656 145 5 053 0 -
Aktiengesellschaft
Hanjin Shipping
8 3.41 640 490 104 6 159 0 -
Company Limited
Mitsui O.S.K. Lines
9 3.19 599 772 111 5 403 122 300 6 20 383
Limited (MOL)
10 APL Limited 2.91 545 850 96 5 686 0 -
Orient Overseas
11 Container Line Limited 2.77 520 328 103 5 052 143 656 8 17 957
(OOCL)
Hamburg
Sudamerikanische
12 2.66 498 902 104 4 797 0 -
Dampfschifffahrts-
Gesellschaft KG
deployed, ranked by TEU) (continued)

Nippon Yusen Kabushiki
13 2.63 494 953 104 4 759 112 000 8 14 000
Kaisha (NYK)
Yang Ming Marine
14 2.60 487 771 103 4 736 182 000 13 14 000
Transport Corporation
Hyundai Merchant
15 Marine Company Limited 2.13 399 791 65 6 151 60 000 6 10 000
(HMM)
Kawasaki Kisen Kaisha
16 2.12 397 623 77 5 164 110 960 8 13 870
Limited ('K' Line)
Pacific International
17 Lines (Private) Limited 1.99 374 849 139 2 697 22 905 6 3 818
(PIL)
United Arab Shipping
18 1.98 372 841 53 7 035 214 300 13 16 485
Company (S.A.G.) (UASC)
Zim Integrated Shipping
19 1.58 296 554 66 4 493 0 -
Services Limited
Compania Sud
20 Americana de Vapores 1.26 237 567 40 5 939 18 000 2 9 000
S.A. (CSAV)
21 Wan Hai Lines Limited 1.07 200 970 88 2 284 0 -
22 X-Press Feeders 0.67 126 009 87 1 448 0 -
MCC Transport
23 (Singapore) Private 0.58 109 662 62 1 769 0 -
Limited
24 Delmas 0.53 99 078 47 2 108 0 -
SITC Container Lines
25 0.41 76 765 63 1 218 14 400 8 1 800
Company Limited
Korea Marine Transport
26 Company Limited (KMTC 0.40 75 779 46 1 647 5 400 1 5 400
Line)
Nile Dutch Africa Line
27 0.40 75 678 29 2 610 0 -
BV
United States Military
28 0.36 68 334 58 1 178 0 -
Sealift Command
Compania Chilena
29 de Navegacion 0.32 59 906 14 4 279 18 030 2 9 015
Interoceanica S.A. (CCNI)
30 CNC Line Limited 0.32 59 787 26 2 300 0 -
BBC Chartering &
31 Logistic GmbH & 0.31 57 570 93 619 0 -
Company KG
TS Lines Company
32 0.31 57 477 36 1 597 0 -
Limited
Safmarine Container
33 0.28 52 638 23 2 289 0 -
Lines N.V.
Arkas Konteyner ve
34 0.28 52 180 36 1 449 5 000 2 2 500
Tasimacilik A.S.
35 Seago Line 0.27 50 688 22 2 304 0 -
Simatech Shipping &
36 0.24 45 947 19 2 418 8 700 2 4 350
Forwarding L.L.C.
Sinotrans Container
37 Lines Company Limited 0.23 43 447 36 1 207 16 000 4 4 000
(Sinolines)
deployed, ranked by TEU) (continued)

Regional Container Lines
38 0.23 43 371 29 1 496 0 -
Public Company Limited
ANL Singapore Private
39 0.22 41 660 12 3 472 0 -
Limited
40 Gold Star Line Limited 0.22 41 474 17 2 440 0 -
Hafiz Darya Shipping
41 0.22 41 337 9 4 593 0 -
Company (HDS Line)
42 Grimaldi Group S.p.A. 0.21 40 262 41 982 0 -
43 Unifeeder A/S 0.20 36 711 37 992 0 -
Westfal-Larsen Shipping
44 0.19 35 151 17 2 068 0 -
AS
45 Swire Shipping Limited 0.18 34 333 24 1 431 0 -
46 Seaboard Marine Limited 0.17 32 358 26 1 245 0 -
Sinokor Merchant
47 0.17 31 969 32 999 0 -
Marine Company Limited
Spliethoff's
48 0.17 31 454 36 874 0 -
Bevrachtingskantoor B.V.
Heung-A Shipping
49 0.17 31 332 31 1 011 5 400 3 1 800
Company Limited
Samudera Shipping Line
50 0.16 30 995 26 1 192 3 600 2 1 800
Limited
Source: UNCTAD secretariat, based on data provided by Lloyds List Intelligence.

Note: Includes all container-carrying ships known to be operated by liner shipping companies.
It is important to note that the attempt to realize C. CONTAINER SHIP DEPLOYMENT

economies of scale leads to new vessel orders that
at the same time increase the risk of oversupply. AND LINER SHIPPING
The average vessel size for all new vessels on order CONNECTIVITY
by the top 15 companies is above 10,000 TEUs,
Since 2004, the UNCTAD LSCI has provided an
which is double the current average size of vessels
indicator of each coastal countrys access to the
in the existing fleet of each company. Only very few
global liner shipping network, that is the network of
companies outside the top 20 carriers have placed
regular maritime transport services for containerized
any new orders, and if at all, these orders are for far
cargo. The complete time series is published in
smaller vessel sizes.
electronic format on UNCTADstat (http://stats.unctad.
The need to confront the oversupply has resulted org/lsci). The LSCI is generated from five components
in more frequent and wider cooperation of shipping that capture the deployment of container ships by liner
lines on all routes, thus providing more and more shipping companies to a countrys ports of call: (a)
homogenous services. A resulting challenge in the the number of ships; (b) their total container-carrying
industry is the difficulty of service differentiation as capacity; (c) the number of companies providing
container transport is a highly standardized transport services with their own operated ships; (d) the number
service and shipping lines are rarely in a position to of services provided; and (e) the size (in TEUs) of the
establish differentiation of services in terms of quality. largest ship deployed.
The trend towards larger ships, mergers and more The country with the highest LSCI is China, followed
collaboration is also reflected on individual routes and by Singapore, Hong Kong (China), the Republic of
markets. The next section, on container ship fleet Korea, Malaysia, and Germany. The best connected
deployment, provides a more detailed analysis. countries in Africa are Morocco, Egypt and South
Africa, reflecting their geographical position at the five or more providers. Competition is limited on the
corners of the continent. In Latin America, Panama remaining 68 per cent as the number of companies
has the highest LSCI, benefiting from its canal and offering services is smaller or equal to four. This situation
the location at the crossroads of main EastWest and particularly affects small economies and island States.
NorthSouth routes, followed by Mexico, Colombia The most competitive routes for direct container
and Brazil. The 10 economies with the lowest LSCI shipping services are intraregional in Asia and Europe.
are all island States, reflecting their low trade volumes There are 51 liner companies that have vessels
and remoteness. deployed on routes that directly connect Singapore
with ports in Malaysia, 46 companies provide direct
The LSCI of a country is not only determined by its
services between China and the Republic of Korea,
trade volume, but increasingly by its position within the
and 44 carriers offer a direct connection between the
global liner shipping network. The relevance of hubs
Netherlands and the United Kingdom (see table 2.5).
becomes evident in a high level of connectivity despite
a relative low level of trade; examples are Jamaica,
Morocco, Panama and Sri Lanka. The centrality Table 2.5. Container ship deployment on
selected routes, 1 May 2015
of these countries in the global network is of high
relevance for the regions in which they are located, as Number of
these points offer a high level of connectivity beyond companies Largest vessel
Direct services
the traditional direct connectivity. (vessel (TEU)
operators)
Only 1718 per cent of pairs of countries are
Malaysia Singapore 51 15 908
connected with each other through a direct service;
all other country pairs need to make use of at least China Republic of Korea 46 19 224
one trans-shipment for bilateral containerized
Netherlands United Kingdom 44 19 224
trade (Fugazza et al., 2013; Fugazza, 2015). Trans-
shipment in many trade relations is growing and widely China Japan 39 13 092
practiced in the industry to reach economies of scale
Germany Netherlands 36 19 224
and density in operations, and thus it is also widely
accepted by customers as trans-shipment operations China Singapore 35 15 908
have become very efficient and the switch between
Japan Republic of Korea 35 10 000
services is often made in few hours.
Argentina Brazil 23 9 700
Building on UNCTADs newly developed LSBCI (http://
stats.unctad.org/lsbci (accessed 15 July 2015), China United States 23 13 360
UNCTAD research suggests that lacking a direct
Panama United States 21 5 116
maritime connection with a trade partner is associated
with lower values of exports. Estimates point to a China Germany 19 19 224
range varying from minus 42per cent to minus 55per
Cte d'Ivoire Nigeria 19 8 540
cent. When assessing the effect of the number trans-
shipments necessary to connect country pairs, any Chile Peru 18 10 000
additional trans-shipment is associated with a 20
China South Africa 16 10 000
25 per cent lower value of exports. Results further
suggest that in the absence of a bilateral connectivity United Republic of Tanzania
6 3 091
Mozambique
indicator the impact of bilateral distance on bilateral
exports is likely to be overestimated in statistical Kenya Malaysia 5 3 108
estimations (Fugazza, 2015). Comoros United Arab
3 2 226
Emirates
A view of the level of connectivity from a bilateral
perspective shows that intraregional routes are those Fiji Australia 3 2 742
with the greatest services capacity. The bilateral Dominica United States 1 600
perspective further opens up the possibility of taking
a closer look at the level of competition. It shows that Japan Marshall Islands 1 970
on only 32per cent of all 11,650 bilateral connections, Source: UNCTAD secretariat, based on data supplied by
including options with trans-shipments, are there Lloyds List Intelligence.
Figure 2.6 further illustrates the process of concentration economies of scale, there remain fewer companies in
in liner shipping. While the container-carrying capacity individual markets. It is a challenge for policymakers to
per provider per country tripled between 2004 and support technological advances and cost savings, for
2015, the average number of companies that provide example through economies of scale, yet at the same
services to each countrys ports decreased by 29per time ensure a sufficiently competitive environment
cent. Both trends illustrate two sides of the same coin. so that cost savings are effectively passed on to the
As ships get bigger and companies aim at achieving clients, that is, importers and exporters.
Figure 2.6. Presence of liner shipping companies: Average number of companies per country and average
container-carrying capacity deployed (TEUs) per company per country (20042015)
25 50 000
Liner companies
TEU/company
20 40 000
15 30 000
10 20 000
5 10 000
0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Liner companies 22.1 21.8 20.5 20.2 19.5 18.4 17.9 17.8 17.0 16.3 16.1 15.7
TEU/company 13 625 14 471 16 675 19 080 21 246 22 182 26 111 27 628 32 387 34 261 36 072 39 530
Source: UNCTAD secretariat, based on data supplied by Lloyds List Intelligence.
D. REGISTRATION OF SHIPS Care has to be taken when interpreting the data, as

several registries have outsourced important parts
As of 1 January 2015, Panama, Liberia and the of their operations and thus not all revenues remain
Marshall Islands are the largest vessel registries. in the flag State. Nevertheless, for some developing
Together, they account for a 41.8 per cent share of countries the provision of flag State services has
the world tonnage, with the Marshall Islands having become an important source of income.
recorded an impressive growth of over 13 per cent
over 2014 (table 2.6). More than three quarters of Historically, when the first shipowners started to flag
the world fleet are registered in developing countries out by registering their ships in a foreign open registry
(table 2.7), including in many open registries, that is, in the 1970s or even earlier, one of the motivations
registries where the owner does not need to be of may have been less stringent safety and environmental
the same nationality as the country where the ship is regulations. Today, there is no generalized difference
registered. The tonnage registered under a foreign flag between open and national registries as far as the
(where the nationality of the owner is different from the ratification and implementation of relevant international
flag flown by the vessel) is 71 per cent of the world conventions is concerned. A comparative table
total (see also table 2.3 above). provided by the International Chamber of Shipping
Table 2.6. The 35 flags of registration with the largest registered fleets, as of 1 January 2015 (dwt)
Share of Deadweight Share of Cumulated Average Dwt growth

Number of
Flag of registration world total, tonnage world total share vessel size 2015/2014
vessels
vessels (1,000 dwt) (dwt) (dwt) (dwt) as %
Panama 8 351 9.33 352 192 20.13 20.13 44 052 0.91
Liberia 3 143 3.51 203 832 11.65 31.79 65 018 0.31
Marshall Islands 2 580 2.88 175 345 10.02 41.81 67 990 13.32
Hong Kong (China) 2 425 2.71 150 801 8.62 50.43 63 575 6.47
Singapore 3 689 4.12 115 022 6.58 57.01 33 830 8.52
Malta 1 895 2.12 82 002 4.69 61.70 43 898 8.69
Greece 1 484 1.66 78 728 4.50 66.20 63 286 4.45
Bahamas 1 421 1.59 75 779 4.33 70.53 54 322 2.54
China 3 941 4.41 75 676 4.33 74.85 20 756 -1.28
Cyprus 1 629 1.82 33 664 1.92 76.78 32 000 3.96
Isle of Man 1 079 1.21 23 008 1.32 78.09 55 441 -2.28
Japan 5 224 5.84 22 419 1.28 79.38 5 558 7.47
Norway 1 558 1.74 20 738 1.19 80.56 15 339 -1.20
Italy 1 418 1.58 17 555 1.00 81.57 14 556 -11.22
United Kingdom 1 865 2.08 17 103 0.98 82.54 16 059 -0.35
Republic of Korea 673 0.75 16 825 0.96 83.51 10 099 -3.13
Denmark 7 373 8.24 16 656 0.95 84.46 26 606 13.94
Indonesia 1 604 1.79 15 741 0.90 85.36 3 681 2.29
India 1 174 1.31 15 551 0.89 86.25 10 157 -1.39
Antigua and Barbuda 650 0.73 12 753 0.73 86.98 10 909 -3.45
Germany 3 561 3.98 12 693 0.73 87.70 22 230 -11.69
United States 1 613 1.80 12 683 0.73 88.43 6 089 2.59
United Republic of Tanzania 1 313 1.47 11 703 0.67 89.10 46 256 -1.54
Bermuda 1 245 1.39 11 511 0.66 89.75 71 946 2.69
Malaysia 1 777 1.99 9 232 0.53 90.28 6 793 -0.95
Turkey 2 471 2.76 8 820 0.50 90.79 8 181 -2.64
Netherlands 1 412 1.58 8 651 0.49 91.28 7 536 0.34
Belgium 756 0.85 8 609 0.49 91.77 45 548 21.96
Viet Nam 674 0.75 7 351 0.42 92.19 4 499 0.81
Russian Federation 963 1.08 7 221 0.41 92.60 2 974 2.45
France 670 0.75 6 882 0.39 93.00 16 042 -8.85
Philippines 646 0.72 6 850 0.39 93.39 6 149 6.19
Kuwait 765 0.86 5 440 0.31 93.70 40 002 37.91
Thailand 749 0.84 5 070 0.29 93.99 7 636 0.86
Taiwan Province of China 586 0.66 4 829 0.28 94.27 18 431 8.05
Top 35 total 72 377 80.90 1 648 937 94.27 94.27 27 697 3.53
World total 89 464 100.00 1 749 222 100.00 100.00 22 757 3.54

Note: Propelled seagoing merchant vessels of 100 GT and above, ranked by dead-weight tonnage. For a complete list of all
countries see http://stats.unctad.org/fleet (accessed 19 September 2015).
Table 2.7. Distribution of dwt capacity of vessel types, by country group of registration, January 2015
(beginning-of-year figures,per cent of dwt, annual growth in percentage points in italics)
Total fleet Oil tankers Bulk carriers General cargo Container ships Others
World total 100.00 100.00 100.00 100.00 100.00 100.00
Developed countries 22.70 26.26 17.82 28.38 26.81 25.75
-0.02 -0.09 -0.05 -0.02 0.54 -0.08
Countries with economies 0.71 0.78 0.26 5.35 0.03 1.22
in transition 0.00 0.01 0.01 -0.03 0.00 0.01
Developing countries 76.36 72.91 81.90 65.41 73.14 71.45

0.03 0.08 0.06 -0.05 -0.55 0.05
Of which:
Africa 13.14 17.18 9.98 5.96 20.19 9.93
-0.46 -0.25 -0.44 0.06 -1.11 -0.51
America 26.74 20.68 31.93 22.57 19.75 31.53
-0.68 -0.24 -0.63 -0.76 -2.24 -0.66
Asia 26.05 21.46 29.46 33.92 28.00 18.92
0.27 -0.07 -0.10 0.67 2.27 -0.08
Oceania 10.42 13.60 10.53 2.95 5.20 11.07
0.85 1.10 0.87 0.03 0.74 0.76
Unknown and other 0.24 0.05 0.01 0.86 0.02 1.57
0.00 0.00 -0.03 0.10 0.01 0.02
Note: Propelled seagoing merchant vessels of 100 GT and above.
shows that both national and open registries can be E. SHIPBUILDING, DEMOLITION AND
found among the best and among the worst service
providers (International Chamber of Shipping, 2014). NEW ORDERS
The registries with youngest fleets among the top 35
flags were Hong Kong (China), the Marshall Islands 1. Deliveries of newbuildings
and Singapore.
In total, the world fleet grew by 42million GT in 2014,
Registries with a good track record usually host far
resulting from newbuildings of almost 64 million GT
younger fleets and keep a close eye on the compliance
minus reported demolitions of about 22million GT.
of shipowners with international regulations. It is in
their interest that their flag is not targeted by port State More than 91 per cent of GT delivered in 2014 was
control authorities, as this would make the flag less built in just three countries: China (35.9 per cent);
attractive to shipowners. It is, in fact, in the interest of the Republic of Korea (34.4 per cent); and Japan
these good registries that environmental and safety (21.0 per cent), with China mostly building dry bulk
regulations are ambitious and strictly enforced, as this carriers, followed by container ships and tankers; the
will be more of a challenge to owners and registries Republic of Korea building mostly container ships and
with older and less well-maintained ships. oil tankers; and Japan specializing fundamentally in
bulk carriers.
Interestingly, several of the major open registries are
located in SIDS. These registries have a double interest To respond to demands for a more environmentally
in promoting ambitious regulations, for example within sustainable shipping fleet, shipbuilders, owners
IMO. If, for example, lower global limits on CO2 emissions and non-governmental technical bodies such as
are imposed, this could further enhance the competitive classification societies increasingly collaborate on
advantage of those registries that already host more the development of new technologies and eco-ships.
modern and younger fleets. It would also constitute a Notably, classification societies have in recent years
contribution to climate change mitigation, which is of led research into the use of alternative energies on
paramount concern for many island economies. ships, including wind and solar power.
Table 2.8. Deliveries of newbuildings, major vessel types and countries where built (2014, thousands of GT)
Republic of
China Japan Philippines Rest of world World total
Korea
Oil tankers 2 896 4 781 891 466 9 034

Bulk carriers 13 304 1 588 10 791 869 167 26 719
General cargo 585 329 199 372 1 485
Container ships 4 986 9 135 188 995 735 16 039
Gas carriers 119 3 528 666 14 4 328
Chemical tankers 113 185 188 57 543
Offshore 714 1 485 51 956 3 206
Ferries and passenger ships 92 5 27 767 892
Other 42 835 391 147 1 415
Total 22 851 21 872 13 392 1 865 3 682 63 662
Source: UNCTAD secretariat, based on data provided by Clarksons Research.
Note: Propelled seagoing merchant vessels of 100 GT and above. More detailed data on other countries where vessels were built
is available under http://stats.unctad.org/shipbuilding.
2. Demolition of ships far as emissions are concerned. The Government

of China has extended a subsidy programme that
The scrapping of ships helps reduce the oversupply encourages shipping companies to scrap old
of tonnage, and it encourages the modernization of vessels. The scheme, which began in 2013, provides
the fleet, including from an ecological perspective, financial incentives to shipowners to replace old
as the vessels demolished tend to be less fuel vessels with newer, more environmentally friendly
efficient and more detrimental to the environment as models (Reuters, 2015).
Table 2.9. Tonnage reported sold for demolition, major vessel types and countries where demolished
(2014, thousands of GT)
Unknown
Others/
India China Bangladesh Pakistan Turkey Indian World total
unknown
subcontinent
Oil tankers 393 827 368 2 227 86 160 420 4 482

Bulk carriers 1 576 2 771 2 888 1 458 151 111 143 9 098
General cargo 719 301 313 65 349 259 2 008
Container ships 3 455 777 303 32 63 139 4 769
Gas carriers 215 8 62 28 29 342
Chemical tankers 136 3 10 13 34 1 196
Offshore 127 6 199 331 9 26 697
Ferries and
74 13 19 67 22 194
passenger ships
Other 270 168 106 53 12 609
Total 6 965 4 873 4 269 4 127 839 271 1 051 22 394
Source: UNCTAD secretariat, based on data from Clarksons Research.

Note: Propelled seagoing merchant vessels of 100 GT and above. More detailed data on other countries where vessels were
demolished is available under http://stats.unctad.org/shipscrapping.
South Asia (Bangladesh, India and Pakistan) and China 3. Tonnage on order
together account for more than 90per cent of global
ship breaking. Within ship demolition, furthermore, a The world order book in early 2015 is far below its
certain specialization exists, as most container ships peak of 20082009. Between 2014 and 2015, the
are demolished in India, while Bangladesh and China order book declined for most vessel types except for
purchased more dry bulk carriers, and Pakistan mostly oil tankers. Those who did place new orders did so
oil tankers. for two main reasons: first, they expect future demand
Ship breaking itself is also under scrutiny for its to grow sufficiently to cater for the new deliveries;
environmental impact, particularly the method of second, new ships are more fuel efficient and less
beaching applied in South Asia, which tends to be polluting. To comply with new regulations having as
harmful to the local environment and often lacks health objective the long-term environmental sustainability
and safety measures. Ongoing projects aim at the of international shipping, shipowners find additional
development of safe and environmentally sound ship motivations to replace old tonnage with newbuildings.
recycling, with the goal of improving the standards In April 2015, the container ship order book stood at
and, therefore, the sustainability of the industry (IMO, 18 per cent of existing capacity, its lowest level for
2015). over a decade (Clarksons Research, 2015b).
Figure 2.7. World tonnage on order, 20002015 (thousands of dwt)
350 000
300 000
250 000
200 000
Dry bulk
150 000
100 000 Oil tanker
50 000
Container
0 General
Dry bulk
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 cargo
33 721 35 757 24 144 32 066 55 850 68 878 75 988 106 896 249 289 322 903 302 797 306 458 232 138 139 516 172 539 169 734
Oil tanker 39 546 53 919 65 896 63 678 82 258 97 474 102 010 169 883 184 196 192 252 148 307 134 044 94 936 72 843 85 844 94 851
Container 11 922 18 348 17 121 14 225 33 004 45 241 54 351 57 938 79 665 74 408 58 821 45 860 51 614 40 685 46 795 37 977
General cargo 3 325 3 053 2 984 2 881 3 587 4 638 7 139 10 070 14 389 16 657 14 315 13 051 9 526 6 172 4 226 3 058

Note: Propelled seagoing merchant vessels of 100 GT and above, beginning of year figures.
4. Outlook (see also chapter 3). The interplay between more

stringent environmental regulations and low freight
Economic and regulatory incentives will continue to and charter rates should encourage the further
encourage individual owners to invest in modernizing demolition of older vessels; this would not only
their fleets. Unless older tonnage is demolished, this help reduce the oversupply in the market, but also
would lead to further global overcapacity, continuing contribute to lowering the global environmental
the downward pressure on freight and charter rates impact of shipping.
REFERENCES
Clarksons Research (2014a). World Fleet Monitor. January.
Clarksons Research (2014b). World Fleet Monitor. November.
Clarksons Research (2015a). World Fleet Monitor. March.
Clarksons Research (2015b). Container Intelligence Monthly. April.
Fugazza M (2015). Maritime connectivity and trade. UNCTAD Policy Issues in International Trade and Commodities
No. 70. Geneva.
Fugazza M, Hoffmann J and Razafinombana R (2013). Building a data set for bilateral maritime connectivity.
UNCTAD Policy Issues in International Trade and Commodities No. 61. Geneva.
IMO (2015): Recycling of ships. Available at http://www.imo.org/en/OurWork/Environment/ShipRecycling/Pages/
Default.aspx (accessed 13 July 2015).
International Chamber of Shipping (2014). Shipping industry flag State performance table 20142015. Available
at http://www.ics-shipping.org/docs/default-source/resources/policy-tools/ics-shipping-industry-flag-state-
performance-table-2014-15.pdf?sfvrsn=10 (accessed 13 July 2015).
Lloyds List Intelligence Containers (2015). Available at http://www.lloydslistintelligence.com/llint/containers/
index.htm (accessed 1 May 2015).
Morgan Stanley (2013). Maritime industries. Eco ships: Fuel savings alone do not justify investing in newbuilds.
Morgan Stanley Research. 26 August.
Reuters (2015). UPDATE 1 China extends ship scrapping subsidy programme to end-2017. Industries.
23June. Available at http://www.reuters.com/article/2015/06/23/china-shipping-idUSL3N0Z91FB20150623
(accessed 28 June 2015).UNCTADstat Fleet ownership. See http://stats.unctad.org/fleetownership
(accessed 1July 2015).
UNCTADstat Fleet ownership. See http://stats.unctad.org/fleetownership (accessed 1July 2015).
ENDNOTES
1
The underlying data on the world fleet for chapter 2 has been provided by Clarksons Research, London.
The vessels covered in UNCTADs analysis include all propelled seagoing merchant vessels of 100 GT and
above, including offshore drillships, FPSOs and the Great Lakes fleets of Canada and the United States,
which for historical reasons had been excluded in earlier issues of the Review of Maritime Transport.
Military vessels, yachts, waterway vessels, fishing vessels and offshore fixed and mobile platforms and
barges are excluded. As regards the main vessel types (oil tankers, dry bulk, container and general cargo
carriers), there is no change compared to previous issues of the Review of Maritime Transport. As regards
other vessels, the new data include a smaller number of ships (previously, fishing vessels with little
cargo-carrying capacity had been included) and a slightly higher tonnage due to the inclusion of ships
used in offshore transport and storage. To ensure full comparability of 2015 data with the four previous
years, UNCTAD has updated the fleet data available online for the years 2011 to 2015, applying the same
criteria (see http://stats.unctad.org/fleet). As in previous years, the data on fleet ownership covers only
ships of 1,000 GT and above, as information on the true ownership is often not available for smaller ships.
For more detailed data on fleet ownership see http://stats.unctad.org/fleetownership.
FREIGHT RATES
AND MARITIME
3
TRANSPORT
COSTS
Developing countries, especially in Africa and Oceania, pay 40 to 70per 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. There is potential
for policymakers to partly remedy the situation through investments and reforms, especially in
the regions seaports, transit systems and customs administrations.
Container freight rates remained volatile throughout 2014 although with different trends
on individual trade lanes. Market fundamentals have not changed significantly despite the
expansion in global demand for container shipping. This was mainly due to pressure from the
constant supply of vessels that the market rates continued to face, with the introduction of very
large units on mainlane trades and the cascading effect on non-mainlanes trades. The tanker
market, which encompasses the transportation of crude oil, refined petroleum products and
chemicals, 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. Bulk carrier earnings fell 5per cent from
2013 to reach an average of $9,881 per day in 2014. The low level of earnings exerted financial
pressure on owners and led to several companies filing for bankruptcy.
A. DETERMINANTS OF MARITIME these groups and discuss the options for policymakers
to help reduce international maritime transport costs.
TRANSPORT COSTS
In recent years, policymakers and industry players
Policymakers and shippers have an interest in have increasingly mainstreamed environmental
understanding the determinants of international sustainability criteria into their planning processes,
maritime transport costs. Maritime transport handles policies and structures, not only to respond to global
over 80 per cent of the volume of global trade (and challenges for reducing emissions and improving
about 90 per cent of developing countries volume the environmental footprint but also as a means
of international trade is seaborne) and knowing the to improve energy savings and to achieve a more
reasons for differences in what a trader pays for the efficient allocation of available resources. Specific
international transport of merchandise goods can help actions may involve developing fuel-efficient vessels,
identify possible areas for intervention by policymakers. improving energy efficiency, reshaping transport
Extensive recent research has helped identify the main architecture and networks, adapting and developing
determinants of freight costs (see Cullinane et al., appropriate infrastructure, rethinking and optimizing
2012; ECLAC, 2002; Sourdin and Pomfret, 2012; and operating procedures of freight logistics, harnessing
Wilmsmeier, 2014; and the literature reviewed therein). new technologies, and supporting information and
Figure 3.1 summarizes seven groups of determinants. communications technology and intelligent transport
The remainder of this section will introduce each one of systems.
Figure 3.1. Determinants of maritime transport costs
Ports
Infra- and
supertructure
Port productivity
Port operator
model
Port tariffs
Shipped product Trade flows
Volume of Trade imbalances
shipment Volumes of trade
Value Complementarity
Type of produce of trade
Determinants
of international
maritime
transport costs Structure of the
Facilitation maritime industry
Trade facilitation Competition
Transport Liner services
faciliation supply
Regulation
Position within the

Ship operating costs global shipping
network
Crewing
B
unker Connectivity
R egistration Centrality
Distance
Source: UNCTAD secretariat, based on Wilmsmeier, 2014.

CHAPTER 3: FREIGHT RATES AND MARITIME TRANSPORT COSTS 49
1. Trade and transport facilitation as measures included in article 10 of the WTO TFA) have
a particularly high statistical correlation with a countrys
Reducing waiting times in seaports for ships and ranking in international logistics benchmarks, such as the
their cargo has a direct bearing on trade costs. First, World Bank Logistics Performance Index (figure3.2).
from the shippers perspective, it implies lower costs
associated with the holding of inventory en route to 2. Ship operating costs
the final destination. It has been estimated that each
additional day cargo spends in transit is equivalent to Technological advances have led to a continuous
an ad valorem tariff of 0.6 to 2.1per cent (Hummels and reduction in vessel operating costs over the decades.
Schaur, 2013). Second, waiting times also imply costs Improved fuel efficiency, economies of scale, and
to the carrier, which will ultimately have to be passed on automation in port operations all help to reduce
to the client through higher freight charges. Wilmsmeier environmental and financial costs (see chapter 2).
et al. (2006) estimated that a 10per cent reduction of
However, the drive to invest in lower operating costs may
the time it takes to clear customs implies a reduction of
have some negative repercussion on freight rates. For
the maritime freight of about 0.5per cent.
example, as carriers invest in larger and more energy-
Different trade facilitation measures can be implemented efficient vessels in the current market situation to
to reduce waiting times and improve the logistics achieve economies of scale or to improve fuel efficiency
performance of countries in other ways. It has been they inadvertently also contribute to a further oversupply
suggested by UNCTAD (2015) that the transparent of capacity. While the individual carrier may benefit from
publication of trade-related information (such as measures cost savings from deploying bigger vessels, all carriers
included in article 1 of the WTO TFA) as well as the bear the burden of the resulting oversupply and lower
simplification and reduction of customs formalities (such freight levels to the benefit of importers and exporters.
Figure 3.2. Statistical correlation between articles of the WTO TFA and indicators for trade efficiency
Source: UNCTAD secretariat, based on data from the World Bank (Logistics Performance Index and Doing Business Index) and
WTO (number of category A notifications).
Note: The axis in the chart represents the partial correlation coefficient between the notification of trade facilitation measures under
the 12 TFA articles and the value in the Logistics Performance and the Doing Business indices.
Oversupply of shipping capacity combined with a freight costs will have to cover at least the operating
weak global economy has been a main factor affecting costs of the carrier; put differently, if the price of a
freight rates in recent years. In an effort to deal with transport service does not cover at least the fuel,
low freight rate levels and to leverage some earnings, communications and crewing costs, the carrier will
carriers have looked at measures to improve efficiency anchor the ship and not offer the transport service. In
and optimize operations in order to reduce unit the long term, however, the freight charges will have
operating costs. Some of these measures involved to cover the total average costs, including the fixed
operational consolidation, slow steaming, idling, and costs. As operating (variable) costs are lower today
replacing smaller and older vessels with newer and than in previous decades, this means that freight rates
more fuel efficient ones. may also reach lower levels than in the past. Lower
Although operating costs in shipping have been unit operating costs in bigger vessels, however, can
decreasing, the total costs of the transport system only be reached if utilization rates are sufficient; if they
have declined less. First, total costs for the carrier are not, the carrier might be affected by diseconomies
have to take into account the costs of investing in of scale. The risk of the latter also increases with ship
new assets. Second, larger ships and the increasing size, particularly if demand and supply do not develop
use of hub ports also require ports and port cities to in line with each other. Effectively, freight rates appear
invest in additional capacities for storage, handling to fluctuate more today than in earlier decades, and
and intermodal connections. These additional costs the changing structure of operating versus fixed costs
including external social and environmental costs is probably one of the reasons for this trend.
are not born by the carrier, but by the ports and local
communities. 3. Distance and a countrys position
Lower operating costs as compared to higher fixed within shipping networks
costs (that is, the capital costs associated with larger
and more fuel-efficient ships) will likely also lead Shipping goods over a longer distance requires more
to more volatile freight rates. In the short term, the time (capital costs) and fuel (operating costs). Thus,
Figure 3.3. The no-relationship between distance and maritime transport costs
12
10
Transport cost per ton (ln)
6
R = 0.0174
0
0 2000 4000 6000 8000 10000 12000 14000
Nautival miles
Source: ECLAC and UNCTAD secretariat, based on data from the International Transport Database ECLAC, 2013.
Note: Based on 12,595 observations of maritime transport costs in international trade for the year 2013 at the Standard
International Trade Classification two-digit level.
trading partners that are further away from main Research on liner shipping connectivity frequently
markets might expect to be also confronted with concludes that the position within a network has a
higher bilateral freight costs. As regards the impact of more significant impact than the notion of geographical
distance, the traditional gravity model would suggest distance (Kumar and Hoffmann, 2002; Mrquez-Ramos
that countries that are further away from each other et al., 2005; Wilmsmeier et al., 2006; Wilmsmeier, 2014;
will trade less (see, for example, Tinbergen, 1962; Angeloudis et al., 2006; and McCalla et al., 2005). This
Pyhnen, 1963; and Linnemann, 1966). However, important finding also needs to be seen in the context
traditional gravity models ignore effective distance of the influencing variables of liner network connectivity
and connectivity as potentially described by network such as ship size and frequency, which are determined
structures (for example, the regular shipping liner by the overall level of trade, the geographic position and
services configuration). Limo and Venables (2001) last but not least port infrastructure endowment and
show, using the example of shipping costs to development options (see chapter 4).
Baltimore, that geographic distance alone cannot
The functioning of the network and its structure
explain price differences in freight rates (figure3.3).
involve complex interaction between the maritime and
Figure 3.3 illustrates that the geographical maritime port industry, and also the country and international
distance only has a small statistical correlation with organizations acting as governing and regulating bodies.
freight costs. More than the geographical distance, Decisions made by these actors will subsequently also
it may be rather the economical distance, as for influence the cost of transport for a country or region
example captured by shipping connectivity and a in trade with its counterparts. Figure 3.4 (section C.3)
countrys position within global shipping networks, exemplifies the reduction in freight rates with increasing
that emerges as the relevant factor for international connectivity, where connectivity is an expression of
transport costs. Bilateral liner shipping connectivity, shipping possibilities, port infrastructure endowment
as captured by the UNCTAD LSBCI (see chapter 2) and industry structure (for a detailed discussion, see
has a stronger bearing on freight costs than distance Wilmsmeier and Hoffmann, 2008; and Wilmsmeier,
(figure3.4). 2014).
Figure 3.4. The relationship between transport costs and LSBCI, 2012 and 2013
7
6
R = 0.0814
R = 0.0535
5
2
2012 2013
0
0 0.1 0.2 0.3 0.4 0.5 0.6
LSCBI
Source: UNCTAD secretariat, based on data from the International Transport Database ECLAC, 2012 and 2013.
Note: Based on 7,868 observations of maritime transport costs in international trade for the years 2012 and 2013 at the Standard
International Trade Classification one-digit level.
4. Competition and market regulation and the shipping industry, which have both been
driven by strong concentration processes and
Price-setting in transport and logistics markets vertical integration at global level, have a profound
significantly depends on the level of effective influence on maritime network structure and also on
competition. Competition in the transport markets the degree of integration of a region in the global
depends on the size of the market and effective maritime transport network.
market regulation. Any impediment to free Policymakers need to carefully observe
competition and the potential existence of collusive concentration processes in the maritime industry
behaviour, atomization and monopolies will have and be aware of possible negative effects on the
impacts on price structures, and these factors are trade and competitiveness of a countrys exports,
discussed in the following paragraphs. predominantly in network peripheral countries and
Historically, shipping lines have tried to concentrate regions. See figure2.6 (chapter2), which illustrates
activities in accordance with other market players at the decreasing number of shipping companies
certain points, as they are aware of the benefits of providing services in individual markets.
economies of agglomeration and scope. This has
given room for the development of hub-and-spoke 5. Value, volume and type of shipped
strategies and share capacity, in which the hubs
are nodes for high-volume services to interchange
product
cargoes and to transfer cargo to secondary routes.
The influence of the unitary value of the product
The different strategies of shipping lines, the balance on ocean freight rates has to be interpreted in the
of power between shipping lines, shippers and ports, context of the history and structure of shipping
and constraints related to inland transportation markets. The value of the product also determines
can impact on the evolution and characteristics the elasticity of demand, that is, the willingness of
of and competition in maritime shipping networks. the shipper to pay higher or even premium rates.
Moreover, strategic alliances between the port Earlier works (Wilmsmeier, 2003; Wilmsmeier et
Figure 3.5. Transport costs and economies of scale
16
14
12
10
8
2013
2008
6 2010
0
0 2 4 6 8 10 12 14 16
-2
Volume tons (ln)
Source: UNCTAD secretariat, based on data from the International Transport Database ECLAC, 20082013.
Note: All data are at the Standard International Trade Classification two-digit level, excluding products in Standard International
Trade Classification commodity groups three and nine.
al., 2006; Martnez-Zarzoso and Surez Burguet, Figure 3.5 illustrates the effect of economies of scale
2005; and Wilmsmeier and Martnez-Zarzoso, as volume per shipment. These are economies of
2010) all identify a relevance of the product unit scale realized outside a company as a result of
value on transport costs. Palander (1935) had its location and occur when trade between two
already proposed that transport costs were not countries has low tariffs and customs restrictions,
regular but varied according to the weight, bulk, or a region has an efficient and effective transport
value and perishability of the product, and mode of infrastructure.
transport and distance. Radelet and Sachs (1998)
found that countries differed in their average cost, 6. Port characteristics and
insurance, freight/free on board ratios not only
infrastructure
due to differences in shipping costs but also due
to differences in composition of commodity mix in Port performance is essential for the efficiency
external trade. and effectiveness of the maritime network. Port
infrastructure endowment can be described by
Despite the fact that there is no obvious reason for
variables such as number of cranes, maximum
the connection between the freight rate and value
draught and storage area at origin and destination
of a product, a wide range of works describe the
ports. The interaction of these variables is decisive.
relationship between a products unit value and
Installing ship-to-shore gantries, for example, may
the freight charged. The reason is that operators
well lead to higher port charges for the shipping line.
assume that unit value is inversely related to
The line may still achieve an overall saving, because
the elasticity of demand for transport. Besides
its ships spend less time in the port, or because it can
insurance costs, feedering in hub-and-spoke
change from geared to gearless vessels. This, in turn,
networks, modal switching and the like, can also
will also lead to lower freight rates.
have an influence. Each product has a certain risk
sensibility during transport. Risk in this context can However, development of port infrastructure is only
refer to timely delivery, the probability of theft and/ worthwhile if the entire transport system benefits and
or high sensitivity to changes in the environment not if bottlenecks are only shifted to another element
(temperature and the like). within the system. Factors influencing productivity
are physical, institutional and organizational. Physical
Wilmsmeier and Snchez (2009) analysed transport limiting factors include the area, shape and layout
cost determinants for containerized food imports to of the terminal, the amount and type of equipment
South America and showed that a 10per cent rise available, and the type and characteristics of the
in the value of the commodity increased transport vessels using the terminal. Lack of cranes, insufficient
costs by around 7.6 percent. Special transport land, oddly shaped container yards, inadequate
conditions and needs for certain types of cargo are berthage, inadequate gate facilities, and difficult road
also reflected in the structure of international maritime access are all physical limiting factors. Productivity
transport costs. Containerization has produced must be considered in a system perspective for it to
standard units in terms of size; nevertheless the be of maximum value to industry. This is important
requirements for transporting goods vary and thus from a policy perspective, thus emphasizing the
different types of containers exist to satisfy these need for co-modality and multimodal visions in policy
demands. The transport of refrigerated cargo has recommendations and guidance. All players should
certain implications. have an awareness of the entire system and be wary
of becoming its weak link.
Economies of scale occur at two different levels.
First, system internal economies of scale, which Empirical results presented by Wilmsmeier et al.
reflect the decrease in transport costs per ton, as the (2006) are quite clear and straightforward: increases
size of the individual shipment increases. Second, in port efficiency, port infrastructure, private sector
system external economies of scale, which reflect participation and inter-port connectivity all help to
the decrease in transport costs as the volume of reduce the overall international maritime transport
trade between two countries increases. The latter is costs. If the two countries in their sample with the
also linked to other determinants of transport costs, lowest port efficiency improved their efficiency to the
such as levels of competition, vessel operation level of the two countries with the highest indexes, the
costs and port infrastructure. freight on the route between them would be expected
to decrease by around 25 per cent. Improvements one of the legs of the turnaround trip, the percentage
in port infrastructure and private sector participation, of vessel capacity utilization will be lower, and therefore
too, lead to reduced maritime transport costs. adapt the pricing scheme to the direction of the trip and
Unlike distance, port efficiency can be influenced by to its corresponding expected cargo. Freight rates will
policymakers. Doubling port efficiency at both ends be higher for the shipments transported on the leg of
has the same effect on international maritime transport the trip with more traffic, as the total amount charged
costs as would a move of the two ports 50per cent for this leg must compensate the relatively reduced
closer to each other. income from the return trip, when part of the vessels
capacity will inevitably be taken up with repositioned
Hence, improving port efficiency and productivity
empty containers. Excess capacity on the return trip
and introducing technical advances as well as port
will increase the competition between the various liner
design and planning measures to improve efficiencies
services, and as a result freight rates will tend to be
and reduce time can reveal important insights to
lower. Organization of the transport service market can
policymakers.
reduce empty movements through information and
equipment sharing, freight-pooling, and transnational
7. Trade flows and imbalances cooperation of transport service providers.
The volume and type of cargo has a direct bearing on
the carriers costs. The volume of cargo is important
as it allows for economies of scale, both on the sea
B. INTERNATIONAL TRANSPORT
leg as well as in port, although at times the economies COSTS
of scale achieved on the shipping side may lead to
International transport costs are a key component
congestion and diseconomies of scale in the port.
of trade costs and economic development. Recent
The extent to which the costs incurred by the carrier research in Asia and the Pacific suggests that
are passed on to the client depend on the market tariffs account for only 010 per cent of bilateral
structure and also on the trade balance. On many comprehensive trade costs, while other policy-related
shipping routes, especially for most bulk cargoes, trade costs (that is, of a non-tariff nature) account for
ships sail full in one direction and return almost empty 6090per cent of bilateral trade costs. Put differently,
in the other. Having spare capacity, carriers are willing issues such as transport costs, maritime connectivity,
to transport cargo at a much lower freight rate than and procedures have a stronger bearing on trade
when the ships are already full. Freight rates are thus costs than customs duties (Economic and Social
far higher from China to North America than for North Commission for Asia and the Pacific, 2015).
American exports to China. By the same token, freight
Based on data from merchandise imports, UNCTAD
rates for containerized imports into Africa are higher
has estimated the expenditures on international
than for exports. To some extent the differences in
transport (all modes of transport) for country groups
freight rates that depend on the direction of trade may
(figure 3.6). For the average country, international
be considered, in order that a market mechanism
transport costs amounted to approximately 9per cent
may help reduce imbalances. Those that have a trade
of the value of imports during the decade 20052014.
deficit pay less for the transport of their exports.
Among the main regional groupings, African countries
In containerized trade, balance of trade flows is key in paid the most (average of 11.4 per cent) against
price-setting for shipping lines. Shipping lines calculate an average of only 6.8 per cent for the developed
the costs to move a container on a return-trip basis, countries.
taking probability for empty positioning into account.
Having considered the seven main determinants of
When trade balance is negative, a countrys imports
maritime transport costs, it is now possible to discuss
exceed its exports and the greater the imbalance,
possible reasons for the overall freight costs estimated
the lower the freight rates will be for the countrys
for different country groups, and in particular why
exports; but if exports exceed imports, then the larger
Africa and Oceania pay more for the transport of
the imbalance, the higher the expected freight rates
their imports than other regions. These points are
for exports will be. This divergence, associated with
highlighted in the following paragraphs:
the sign of trade imbalance, occurs as a result of the
freight rate price-fixing mechanisms applying in the (a) Trade and transport facilitation: Many countries
liner market. Liner companies know that recurrently on in Africa are landlocked, depending not only
on the procedures of their own customs and costs may vary over time and depend on fuel
other border agencies, but also on those prices, but they cannot systematically explain
of the neighbouring transit countries. This why freight rates would be higher on one route
situation had been termed the landlocked compared to another.
with bad neighbours trap by Collier (2008).
(c) Position within shipping networks: In particular,
Many countries in Africa and Oceania also
SIDS in Oceania are negatively affected by
report low scores in indicators such as
their geographical position, far from most
the Doing Business Index or the Logistics
major shipping routes. Promoting inter-
Performance Index (see chapter 5 on the
island connectivity and developing regional/
linkages between trade facilitation and
subregional hub ports, as well as upgrading or
sustainable development).
redeveloping port infrastructure and improving
(b) Operating costs: Operating costs (including cargo handling with a potential to reduce freight
costs of repairs and maintenance, hull and costs, could be considered. In Africa, some
machinery and protection and indemnity countries have been able to benefit from their
insurance premiums, crewing, provisions, geographical position and offer trans-shipment
stores, water and lubricating oil) for vessel services. Egypt, for example, benefits from the
operators are overall the same, largely traffic passing through the Suez Canal, and
independent of routes or locations. However, Mauritius and Morocco both have established
these vary depending on ship type and age. important hub ports. Most other African
Routes with bigger and/or newer vessels will countries, however, are relatively far from the
have lower operating costs. Further operating major EastWest shipping routes.
Figure 3.6. International transport costs: Freight costs as a percentage of value of imports, ten-year
averages within country groups, 19852014
13
12
11
10
6
19851944 19952004 20052014
Africa (developing) 12.4 11.7 11.4
Oceania (developing) 11.9 9.9 9.6
Asia (developing) 8.8 9.2 9.0
America (developing) 11.0 11.1 8.0
Transition economies 10.4 7.1
Developed economies 9.5 7.2 6.8
Source: UNCTAD secretariat estimates. Data represent the cost of international transport, excluding insurance costs, as a percentage
of the cost, insurance, freight value of the imported goods.
Notes: Averages within the country groups are unweighted, that is, each countrys freight ratio is assigned the same weight when
calculating the average. Data are for all modes of transport.
(d) Regulation and industry structure: SIDS in freight rates for exports. Given that figure 3.6
Oceania, as well as several smaller African reflects data on imports, Africa and Oceania
economies, only provide relatively small appear to have higher freight costs than the
markets. As a result, shippers may be other regions. Although comprehensive data
confronted with oligopolistic markets, where is not available, anecdotal evidence suggests
low levels of competition may lead to higher that, effectively, freight rates for exports are
prices. In this context it would be a mistake to lower than those for imports in most countries
restrict competition by, for example, introducing in these two regions.
any national or international cargo reservation
In conclusion, the analysis of UNCTAD data on
regime.
transport costs suggests that developing countries,
(e) Shipped product: For manufactured goods, especially in Africa and Oceania, pay more for the
ad valorem transport costs tend to be international transport of their imports than developed
lower than for raw materials, given the lower countries. The main reasons for this situation are to
value per ton of raw materials compared to be found in these regions trade imbalances, pending
manufactured goods. As many developing port and trade facilitation reforms, as well as lower
countries from Africa and Oceania mostly trade volumes and shipping connectivity. There
import manufactured goods, the freight costs is potential for policymakers to partly remedy the
could actually be expected to be lower than in situation through investments and reforms, especially
other regions. On the other hand, the types of in the regions seaports, transit systems and customs
manufactured goods imported into African and administrations.
Oceanian developing countries tend to be of
There is also a clear call for policymakers and port
relatively lower value that is, on average the
authorities to strengthen transnational cooperation
cars, clothes or tools imported into Africa are
to improve the development of the whole system,
of lower per unit value than those imported into
focusing on the causes that put a region or country
Europe or North America. Hence, the cost of
at risk of becoming peripheral and uncompetitive.
transport increases as a percentage share.
While there is not much that policymakers can do
(f) Port characteristics and infrastructure: Many about their countrys geographical position, some
African and Oceanian developing countries, policy options exist to reduce costs by improving
as well as those in Latin America and the port infrastructure and increasing efficiency in the
Caribbean, are confronted with transport logistics chain, including through trade and transport
infrastructure bottlenecks. The largest ships facilitation, and more efficient port operations, or to
that can be accommodated in most of these become more attractive as a port of call, which would
two regions ports are far smaller than those entail more port investments, and maritime transport
that call at ports in other regions. Also, private service liberalization, as well as economic reforms to
sector participation through concessions is strengthen industry and trade relations.
less frequent in developing countries such as
those in Africa and Oceania. Both aspects
contribute to higher transport costs. In this
C. RECENT DEVELOPMENTS IN
context, promoting regional/subregional hub FREIGHT RATES
ports that could handle larger vessels should
In 2014, the freight rates market remained very volatile
be considered, including hub-and-spoke
in its various segments. The continuous delivery
feedering, and interlining and relay services, as
of newly built large vessels and hesitant demand in
well as promoting privatepublic partnerships
the global shipping market put pressure on rates, as
to upgrade and develop port infrastructure and
described below.
cargo handling and operations.
(g) Trade flows: Most countries in Africa and 1. Container freight rates
Oceania have a merchandise trade deficit. As
a consequence, ships are more likely to arrive Container freight rates remained volatile throughout
fully loaded and have spare capacity when 2014 although with different trends in individual
returning to China, Japan or Europe. Freight trade lanes. Market fundamentals did not change
rates for imports should thus be higher than significantly despite the expansion in global demand
for container shipping (see chapter 1). This was mainly Concerning non-mainlanes, freight rates
due to the constant supply pressures that the market performed less well as they also continued to
rates continued to face with the introduction of very face supply pressures from the cascade of large
large units in mainlane trades and the cascading effect tonnage capacity coming from the mainlanes.
on non-mainlane trades (see chapter 2). On the NorthSouth trades, where high levels of
capacity redeployment have taken place, freight
As shown in figure 3.7, the growth in global demand
rates for ShanghaiSouth America averaged as
for container shipping reached 6 per cent in 2014
low as $1,103/TEU in 2014, 20 per cent lower
(compared to 5 per cent in 2013), outpacing that of
than in 2013. On the ShanghaiSingapore intra-
supply, which remained at 5per cent. Global container
Asian route, freight rates remained relatively flat,
demand was boosted mainly by strong trade growth
averaging around 1 per cent higher in 2014. The
on the peak leg mainlanes of the Far EastEurope and
overcapacity also continued to influence the
the trans-Pacific, where North Europe imports and
charter market and rates have remained more or
United States imports from Asia performed particularly
less unchanged at low levels over the year.
well in 2014.
In addition to cascading as a means of managing
Mainlane freight rates recorded a general improvement
oversupply, carriers have continued to adopt idling
in 2014 compared to 2013 levels. The Far East
and slow steaming (notwithstanding the decrease in
Northern Europe rates averaged $1,161/TEU in 2014,
fuel prices during the final months of 2014), which
up by 7per cent from the 2013 average. In the trans-
is estimated to have absorbed around 2.5 million
Pacific freight market, robust trade volumes as well
TEUs of global nominal capacity. The idling of
as cargo diversions due to congestion problems at
container ships fell to 0.2 million TEUs at the end
United States West Coast ports towards the end of
of 2014, equivalent to 1.3per cent of fleet capacity
2014 improved freight rates on the AsiaUnited States
(Clarksons Research, 2015a).
East Coast lane. The ShanghaiUnited States East
Coast freight rate averaged $3,720/40-foot equivalent At the same time, asset sales, consolidation and
unit (FEU) in 2014, 13per cent higher than in 2013, the cooperation efforts of several shipping lines
compared to the ShanghaiWest Coast route, which to save on costs while improving efficiency and
averaged $1,983/FEU, 3 per cent less than in 2013 offering a worldwide network of routes have helped
(table 3.1). to improve operating margins in 2014. For instance,
Figure 3.7. Growth of demand and supply in container shipping, 20002015 (annual growth rates)
15
10
-5
-10
-15 2015
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (estimated)
Demand 10.7 2.4 10.5 11.6 13.4 10.6 11.2 11.4 4.2 -9.0 12.8 7.2 3.2 5.0 6.0 6.5
Supply 7.8 8.5 8.0 8.0 8.0 10.5 13.6 11.8 10.8 4.9 8.3 6.8 4.9 5.0 5.0 6.0
Source: UNCTAD secretariat, based on data from Clarksons Research Container Intelligence Monthly, various issues.
Notes: Supply data refer to total capacity of the container-carrying fleet, including multipurpose and other vessels with some
container-carrying capacity. Demand growth is based onmillion TEU lifts. The data for 2015 are projected figures.
Maersk Group, having launched a new sustainability In addition, the plunge in fuel prices during the
strategy1 in 2014 (which will run from 2014 to 2018), second half of 2014, including a steep fall in bunker
has seen its biggest contributor of overall emissions, fuel prices, with rates falling from $600 per ton in July
Maersk Line, improve its efficiency by approximately 2014 to $250 in January 2015 (Barry Rogliano Salles,
8per cent in 2014 and save $98million worth of fuel 2015) has also helped carriers boost their margins.
(Maersk Sustainability Report, 2014). Combined with In a survey covering 15 publicly traded carriers, it
reductions in unit costs (due to better vessel utilization was noted that revenue decreased by 3 per cent
and network efficiencies) and increases in volumes compared with 2013, following a 5 per cent decline
(while rates decreased by 1.6per cent), Maersk Line from 2012 (AlixPartners, 2015). In 2014, industry
reported a very satisfactory result of $2.3billion profit revenue remained more than 16 per cent below its
in 2014 ($831million higher than 2013).2 2008 peak of more than $200billion.
Table 3.1. Container freight markets and rates
Freight markets 2009 2010 2011 2012 2013 2014

Trans-Pacific ($ per FEU)*
ShanghaiUnited States West Coast 1 372 2 308 1 667 2 287 2033 1970
Percentage change 68.21 -27.77 37.19 -11.11 -3.10
Shanghai United States East Coast 2 367 3 499 3 008 3 416 3290 3720
Percentage change 47.84 -14.03 13.56 -3.7 13.07
Far EastEurope ($ per TEU)
ShanghaiNorthern Europe 1 395 1 789 881 1 353 1084 1161
ShanghaiMediterranean 1 397 1 739 973 1 336 1151 1253
NorthSouth ($ per TEU)
ShanghaiSouth America (Santos) 2 429 2 236 1 483 1 771 1380 1103
Percentage change -7.95 -33.68 19.42 -22.08 -20.07
ShanghaiAustralia/New Zealand (Melbourne) 1 500 1 189 772 925 818 678
ShanghaiWest Africa (Lagos) 2 247 2 305 1 908 2 092 1927 1838
Percentage change 2.56 -17.22 9.64 -7.89 -4.62
ShanghaiSouth Africa (Durban) 1 495 1 481 991 1 047 805 760
Intra-Asian ($ per TEU)
ShanghaiSouth-East Asia (Singapore) 318 210 256 231 233
Percentage change -33.96 21.84 -9.72 0.87
ShanghaiEast Japan 316 337 345 346 273
Percentage change 6.65 2.37 0.29 -21.10
ShanghaiRepublic of Korea 193 198 183 197 187
Percentage change 2.59 -7.58 7.65 -5.08
ShanghaiHong Kong (China) 116 155 131 85 65
Percentage change 33.62 -15.48 -35.11 -23.53
ShanghaiPersian Gulf (Dubai) 639 922 838 981 771 820
Source: Clarksons Research Container Intelligence Monthly, various issues.

Note: Data based on yearly averages.
The year 2014 also witnessed a reshaping of alliances. thereby potentially decreasing future travel distances
The failure of the P3 network between the three largest (Danish Ship Finance, 2015). The charter market
shipping companies, Maersk Line, Mediterranean environment may improve with significant scrapping
Shipping Company and CMA CGM led to the creation levels of small and medium-sized vessels and the
of two important alliances: the 2M network, a 10- relatively small order book of container ship capacity
year vessel-sharing agreement between Maersk and in the smaller size ranges.
the Mediterranean Shipping Company on the Asia
Europe and transatlantic routes; and the Three Ocean 2. Tanker freight rates
Alliance sharing agreement between CMA CGM,
China Shipping Container Lines and United Arab The tanker market, which encompasses the
Shipping Company, in a bid to save costs on key transportation of crude oil, refined petroleum products
container routes between Asia and Europe, as well as and chemicals, witnessed an equally volatile freight
Asia and North America. These alliances are expected rate environment in 2014. As a whole, the Baltic index
to shift the industry towards the use of larger, more for crude oil (Baltic Dirty Tanker Index) progressed by
eco-efficient ships, particularly on AsiaEurope routes, 21 per cent in 2014, reaching 777 points, whereas
and to yield cost savings by deploying larger and more the Baltic Clean Tanker Index remained almost at the
efficient vessels and better utilization, coupled with same level as in 2013, with 607 points, compared
lower CO2 emissions. to 605 in 2013. In 2014, freight rates for both crude
Another important alliance is the global cooperation and product carriers increased in general for all vessel
agreement between United Arab Shipping Company segments. Demand outperformed supply for the first
and Hamburg Sd that will give the Dubai-headquartered time since 2010, leading to higher freight rates.
carrier access to South American trades, namely the The crude tanker market turned out to be better than
EuropeSouth America east coast and AsiaSouth expected in 2014, particularly towards the second half
America east coast trades, and the German shipping of the year, when a drop in crude oil prices increased
line access to AsiaEurope and trans-Pacific trade, demand for such tankers. In addition, the slow
namely the AsiaNorth Europe and AsiaUnited States expansion in oil fleet supply (which only increased
trades (Lloyds List Containerisation International, by 4.5 per cent), slow steaming and the change in
2014). Moreover, the German Hapag-Lloyd and the trading pattern (fewer imports to the United Sates and
Chilean CSAV completed their merger, becoming the increasing demand from the Far East economies),
fourth-largest liner shipping company in the world. which resulted in longer distances (Barry Rogliano
For 2015, the container market can expect another Salles, 2015), triggered a surge in 2014 spot rates in
challenging year. The order book schedule indicates most segments (tables 3.2 and 3.3).
that further ultra-large container ships will be delivered The collapse in oil prices by almost 60per cent over
to the mainlanes in 20152016, and the extent to which the second half of 2014 resulted in positive impacts
cascading continues will largely determine freight on the tanker market. Demand for crude oil tankers
rates on both the mainlane and non-mainlane trades. was also boosted as a consequence of the increase
Moreover, some new challenges could emerge in the in oil stockpiling, especially by Asian countries (namely
future, as global trade is expected to be increasingly China), increases in refinery runs and increases in
concentrated around regional manufacturing hubs, floating storage as the contango situation developed.
Table 3.2. Baltic Exchange tanker indices
percentage
2015
2008 2009 2010 2011 2012 2013 2014 change
(first half)
(2014/2013)
Dirty Tanker Index 1 510 581 896 782 719 642 777 21 853
Clean Tanker Index 1 155 485 732 720 641 605 607 0.33 678
Source: Clarksons Research, Shipping Intelligence Network Timeseries, 2015.

Notes: The Baltic Dirty Tanker Index is an index of charter rates for crude oil tankers on selected routes published by the Baltic
Exchange in London. The Baltic Clean Tanker Index is an index of charter rates for product tankers on selected routes
published by the Baltic Exchange in London. Dirty tankers typically carry heavier oils, such as heavy fuel oils or crude oil.
Clean tankers typically carry refined petroleum products such as gasoline, kerosene or jet fuels, or chemicals.
60
Table 3.3. Tanker market summary clean and dirty spot rates, 20102014 (Worldscale)
Percentage change
Vessel type Routes 2010 2011 2012 2013 2014
Dec. 2014/Dec. 2013
Dec. Dec. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec.
VLCC/ULCC
(200 000dwt+)
Persian GulfJapan 61 59 48 64 63 49 40 41 34 41 50 52 40 45 57 77 20.3%
Persian GulfRepublic of Korea 56 56 46 61 46 48 40 38 34 40 45 44 36 46 53 62 1.6%
Persian GulfCaribbean/East Coast of
36 37 28 37 31 33 29 26 25 26 27 25 20 24 30 34 -8.1%
North America
Persian GulfEurope 57 59 26 .. n.a. 30 30 30 27 41 28 29 26 25 32 32 n.a.
West AfricaChina .. 58 47 61 57 54 45 42 39 40 48 51 45 49 59 63 3.3%
Suezmax
(100 000160 000dwt)
West AfricaNorth-West Europe 118 86 70 102 109 59 62 60 58 70 85 69 59 76 102 91 -10.8%
West AfricaCaribbean/East Coast of North
103 83 65 97 102 57 60 60 52 64 81 63 56 79 91 79 -18.6%
America
MediterraneanMediterranean 113 86 67 99 157 67 67 65 67 73 98 77 65 84 106 95 -4.0%
Aframax
(70 000100 000dwt)
North-West EuropeNorth-West Europe 162 122 93 135 165 118 92 93 96 102 122 115 93 100 113 113 -16.3%
North-West EuropeCaribbean/East Coast
120 .. 80 .. 121 87 85 n.a. 70 80 90 n.a. 90 89 104 110 n.a.
of North America
CaribbeanCaribbean/East Coast
146 112 91 155 243 113 101 98 113 104 157 104 84 123 151 108 -30.3%
of North America
MediterraneanMediterranean 138 130 85 100 167 87 94 92 81 81 98 100 85 92 166 106 6.0%
MediterraneanNorth-West Europe 133 118 80 107 204 83 89 87 65 74 98 104 79 92 185 108 0.9%
IndonesiaFar East 111 104 90 99 109 97 86 86 87 96 101 110 93 90 105 116 17.2%
Panamax
(40 000 - 70 000dwt)
MediterraneanMediterranean 168 153 168 113 213 189 n.a. 118 n.a n.a. n.a. 128 120 100 n.a. n.a. n.a.
MediterraneanCaribbean/East Coast of
146 121 160 105 150 115 114 115 n.a. n.a. 100 113 118 110 123 130 23.8%
North America
CaribbeanEast Coast of
200 133 156 141 229 162 n.a. 109 121 114 162 147 118 113 148 150 6.4%
North America/Gulf of Mexico
All clean tankers
70 00080 000dwt Persian GulfJapan 125 105 116 81 73 78 88 90 91 82 87 116 108 114 115 102 25.9%
50 00060 000dwt Persian GulfJapan 128 119 144 93 88 98 110 93 111 110 105 120 125 132 127 110 18.3%
CaribbeanEast Coast of
35 00050 000dwt 158 155 162 .. 103 105 101 100 96 91 142 100 95 100 131 175 n.a.
North America/Gulf of Mexico
25 00035 000dwt SingaporeEast Asia 193 .. 220 167 158 n.a. 168 180 n.a. n.a. n.a. 176 130 180 158 180 7.8%
Source: UNCTAD secretariat, based on Drewry Shipping Insight, various issues.
Notes: The figures are indexed per ton voyage charter rates for a 75,000 dwt tanker. The basis is the Worldscale 100.
REVIEW OF MARITIME TRANSPORT 2015
* LCC: very large crude carrier; ULCC: ultralarge crude carrier.

As such, the tight availability of tonnage and increase a result of imbalance between supply and demand
in activity pushed up very large crude carrier spot that persisted in 2014, where supply growth (3.9per
freight rates on key freight routes, namely Asian cent) outpaced that of demand (2per cent) in 2014.
routes, towards the end of 2014. The spike in very Nevertheless, clean spot yearly earnings declined by
large crude carrier earnings which began at the end 2per cent, reaching $12,361/day in 2014 (Clarksons
of 2013 continued into 2014, hitting the highest levels Research, 2015b).
since 2010. Very large crude carrier average spot
The tanker market is likely to remain positive in 2015,
earnings stood at $43,948/day for the last quarter
with low crude oil prices and increased storage
of 2014 and $27,315/day for the entire year in 2014,
trades. Nonetheless, the market is still suffering
an increase of 68per cent from 2013. The Suezmax
from overcapacity and freight rates will remain under
segment showed some significant movement,
pressure. Moreover, a change in the pattern of trade
particularly in the last quarter of 2014, with growing
and demand, namely involving the decline in refining
West AfricaEurope trading being substituted for its
capacity in Europe and an increase in Asia and the
primary West AfricaUnited States trade route which
Middle East, may result in increasing freight rate
was virtually eliminated. Supported by low oil prices,
volatility. The Middle East has begun shifting its focus
average yearly earnings rose by 79per cent, reaching
from crude oil exports to downstream developments
$27,791/day in 2014 (Clarksons Research, 2015b).
such as refineries, making Atlantic basin crude oil
Aframaxes benefited from tight tonnage and active
(namely, South American suppliers) more attractive to
trading in the MediterraneanCaribbean/East Coast of
Asia (Danish Ship Finance, 2015).
North America and the Caribbean/East Coast of North
America/Gulf of Mexico region (Drewry, 2015). Spot
earnings averaged $24,705/day in 2014, a 75 per 3. Dry bulk freight rates
cent increase from the previous year.
Despite a strong start and high expectations for a
For product tankers, while market rates improved positive impetus carried over from 2013, the dry bulk
towards the end of 2014 (mainly due to low crude market freight rates faced another challenging year
oil prices that prompted demand for refinery runs, influenced by the surplus capacity that still exists and
particularly in the United States and AsiaPacific), the uncertainties in demand projections in 2014. Bulk
they remained generally low during 2014. This was carrier earnings fell 5 per cent from 2013 to reach
Figure 3.8. Baltic Exchange Dry Index, 20122015 (index base year 1985 = 1,000 points)
2500
2000
1484
1500
1140
1000 910
796
500
Source: UNCTAD secretariat, based on Baltic Exchange data.

Note: The index is made up of 20 key dry bulk routes measured on a time charter basis, and covers Handysize, Supramax,
Panamax and Capesize dry bulk carriers, carrying commodities such as coal, iron ore and grain.
an average of $9,881/day. The low level of earnings down 5per cent to $6,260/day and reaching as low
exerted financial pressure on owners and led to several as $2,137/day in June 2014. Supramax average
companies filing for bankruptcy (Clarksons Research, earnings fell by 12per cent to reach $10,819/day in
2015b). As an overall indicator of the continued 2014, dropping as low as $5,905/day in August before
depression in dry bulk earnings, the Baltic Exchange recovering for the remaining months and ending
Dry Index slid to a low level of 796 points in July 2014, at $8,769/day (Clarksons Research, 2015c). The
to end at 910 points in December 2014 (figure 3.8). Indonesian ban on exports of unprocessed bauxite
and nickel ore resulted in a weak Supramax market
Average earnings in the bulk carrier sector remained
in the Far East.
low and highly volatile in 2014 (figure 3.9). Capesize
earnings during 2014 averaged $13,309/day, down The dry bulk market rates for 2015 and beyond will
15 per cent from 2013. This was despite much continue to be dominated by growing supply and
faster growth in iron ore trade (driven by an increase uncertainties concerning the demand for dry bulk
in Chinese imports) than in the Capesize fleet (which commodities from China. Factors that could influence
grew by 4 per cent in 2014). The Panamax market demand in the future include innovation in technologies
continued to be negatively affected by oversupply of that seek to improve fuel efficiency and substitute for
tonnage (driven by strong deliveries of Kamsarmaxes) coal, and the increased number of countries that are
and slower growth in coal trade (due to declining coal setting policies and regulations aimed at reducing
imports into China), with average earnings dropping carbon emissions.
Figure 3.9. Daily earnings of bulk carrier vessels, 20082015 ($ per day)
45 000
40 000
35 000
30 000
25 000
Panamax
20 000 Capesize
Supramax
15 000 Handysize
10 000
5 000
0
2010 June
2010 August
2010 October
2010 December
2011 February
2011 April
2011 June
2011 August
2011 October
2011 December
2012 February
2012 April
2012 June
2012 August
2012 October
2012 December
2013 February
2013 April
2013 June
2013 August
2013 October
2013 December
2014 February
2014 June
2014 AUgust
2014 October
2014 December
2015 February
2015 April
2015 June
Source: UNCTAD secretariat, based on data from Clarksons Research Shipping Intelligence Network and figures published by the
London Baltic Exchange.
Note: Handysize average of the six time charter routes; Supramax average of the six time charter routes; Panamax average
of the four time charter routes; Capesize average of the four time charter routes.
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ENDNOTES
1
The Maersk sustainability strategy has three focus areas: enabling trade, energy efficiency and investing
in education. See http://www.maersk.com/en/the-maersk-group/sustainability (accessed 9 September
2015).
2
See Maersk line website news articles, available at http://www.maerskline.com/ur-pk/countries/int/news/
news-articles/2015/02/maerskline-report-2014 (accessed 9 September 2015).
4
PORTS
Developing economies share of world container port throughput increased marginally to

approximately 71.9per cent. This continues the trend of a gradual rise in developing countries
share of world container throughput. The increased share of world container throughput for
developing countries reflects an increase in SouthSouth trade.
The performance of ports and terminals is important because it affects a countrys trade
competitiveness. There are many determinants to port/terminal performance labour relations,
number and type of cargo handling equipment, quality of backhaul area, port access channel,
land-side access and customs efficiency, as well as potential concessions to international
terminal operators. The worlds largest terminal operator handled 65.4million 20-foot equivalent
units (TEUs) in 2014, an increase of 5.5per cent over the previous year. Of this figure, 33.6million
TEUs related to its operations at the port of Singapore and 31.9million TEUs from its international
portfolio. Hutchison Port Holdings trust is the second largest international terminal operator by
market share. With operations in China and Hong Kong, China, it is not as geographically diverse
as some other international terminal operators. APM Terminals has a geographical presence in
39 countries. DP World is the most geographically diverse of the global terminal operators, with
a network of more than 65 terminals spanning six continents.
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 (in,
for example, International Maritime Organization (IMO) emission control area (ECA) countries);
increasing societal and environmental pressure; and potential changes in shipping routes from
new or enlarged international passage ways.
A. PORTS AND PORT-RELATED and possible social tensions that may arise with any
physical splitting of a country provide many reasons
DEVELOPMENTS for careful analysis beyond mere economics.
Globally, there are a number of major developments
under way that will have a direct impact on shipping 1. Container ports
and ports. For instance, construction of a second
Container port throughput is measured by the number
Suez Canal alongside the existing Suez Canal began
of TEUs that are handled. One FEU represents two TEU
in 2014 and continued into 2015. Traffic through the
moves and the repositioning of containers to reach
canal is expected to increase from an average of 49
those stacked underneath/on top of others can also
ships per day to 97. Both transit times and waiting
constitute a move. In chapter 1 it was observed that
times will be reduced. For example, transit times will
the number of full containers transported globally by
be shortened from 11 to 18 hours for the southbound
sea in 2014 was estimated at 182million, and yet the
convoy and the waiting time for vessels reduced from
estimated port throughput is more than two and a half
the present 811 hours to 3 hours. The New Suez
times that number, signifying that a lot of repositioning
Canal project is part of a major fiscal stimulus package
of empty containers occurs. The volumes reported
meant to regain pre-2011 economic growth rates of
in this chapter mainly relate to containerized cargo,
around 7per cent per year.
which in turn represents more than half the value of
The development programme includes the creation of all international seaborne trade and around one sixth
an industrial hub in adjacent areas, the development of of its volume. Container ports are multiple-user ports,
five new seaports, a technology valley, and a centre for that is, no one cargo owner has a monopoly of trade.
supplies and logistics. The project will cost an estimated Shipping lines may have dedicated terminals at which
$8.4 billion and is expected to more than double the only they can call, but the cargo still has multiple
canals current annual revenue of $5billion to $13billion owners. Other ports/terminals, for example for dry bulk
by 2023. Financing for the project was opened to and liquids, tend to be owned/operated by a single
Egyptian nationals, with a rate of return guaranteed at company that also owns the cargo. This is particularly
12per cent. The impact of the expansion of the Suez so with commodity trade, where a large conglomerate
Canal on ports in the region is also likely to include an may own an extraction mine, the railway, a processing
increase in the number of ships calling at the ports. plant and port facilities. The consequence of this is that
In contrast, the Panama Canal expansion project (see operational data on bulk ports tend to be confidential
previous editions of the Review of Maritime Transport) and more difficult to ascertain. In addition, information
is likely to be a game changer for regional ports as on the volume and origin/destination of a particular
its expansion will allow for bigger vessels to transit. commodity can affect its price in global markets as
Bigger vessels mean more cargo, which means traders anticipate supply/demand levels, and thus
more revenue, but also increased adaption costs. industry practice tends to be selective in the information
Elsewhere, construction on the Nicaragua Canal has it releases to the public domain. Hence, this chapter
reportedly been delayed. An estimated $50 billion is mainly deals with container trade.
needed to complete the construction (Gracie, 2015). Chinese ports operate the largest number of berths
A proposal to develop a canal through the isthmus (31,705) and handle more cargo both in terms of
of Thailand (Kra Canal) is also currently seeing metric ton volume and number of TEUs than any
another revival, having first been postulated 350 years other country. Chinas combined navigable rivers, at
ago. However, the proposal has not been officially 126,300 kilometres, are also the longest of any single
confirmed (Channel News Asia, 2015). The cost of country. Understanding events in Chinese ports is thus
building the canal is estimated at $28billion and, while a good indication of the global port industry. In 2014,
it is technically feasible, the economic benefits have Chinese river and sea ports handled 12.45billion tons
always remained uncertain as the time saving an of cargo, an increase of 5.8per cent over the previous
estimated three days (depending on speed) is not year. Similarly, containerized cargo grew to 202 million
as significant as 10 days for the Panama Canal and TEUs, an increase of 6.4per cent. Chinas major ports
20 days for the Suez Canal. In an era of economic handled 2.7billion tons of cargo, a modest increase of
uncertainty, vessel oversupply and the industrys 2.2 per cent over the previous year. This slowdown in
response to slow-steam vessels, time saving is not bulk imports is mostly driven by a weaker demand for
the priority it once was. The cost to the environment major commodities, such as coal and iron ore (Yu, 2015).
CHAPTER 4: PORT DEVELOPMENTS 67
Table 4.1. Container port throughput for 80 developing countries/territories and economies in transition,
20122014 (TEUs)
Preliminary figures Percentage change Percentage change

Country/territory 2012 2013
for 2014 20132012 20142013
China 161 318 524 170 858 775 181 635 245 5.91 6.31
Singapore 32 498 652 33 516 343 34 832 376 3.13 3.93
Republic of Korea 21 609 746 22 588 400 23 796 846 4.53 5.35
Malaysia 20 873 479 21 168 981 22 718 784 1.42 7.32
Hong Kong (China) 23 117 000 22 352 000 22 300 000 -3.31 -0.23
United Arab Emirates 18 120 915 19 336 427 20 900 567 6.71 8.09
Taiwan Province of China 14 976 356 15 353 404 16 430 542 2.52 7.02
Indonesia 9 638 607 11 273 450 11 900 763 16.96 5.56
India 10 279 265 10 883 343 11 655 635 5.88 7.10
Brazil 9 322 769 10 176 613 10 678 564 9.16 4.93
Viet Nam 7 509 119 9 036 095 9 424 699 20.33 4.30
Egypt 8 140 950 8 248 115 8 810 990 1.32 6.82
Thailand 7 468 900 7 702 476 8 283 756 3.13 7.55
Panama 7 217 794 7 447 695 7 942 291 3.19 6.64
Turkey 6 736 347 7 284 207 7 622 559 8.13 4.65
Saudi Arabia 6 563 844 6 742 697 6 326 861 2.72 -6.17
Philippines 5 686 179 5 860 226 5 869 427 3.06 0.16
Mexico 4 799 368 4 900 268 5 273 945 2.10 7.63
Islamic Republic of Iran 5 111 318 4 924 638 5 163 843 -3.65 4.86
Sri Lanka 4 321 000 4 306 200 4 907 900 -0.34 13.97
South Africa 4 360 100 4 694 500 4 831 462 7.67 2.92
Russian Federation 3 930 515 3 968 186 3 903 250 0.96 -1.64
Chile 3 596 917 3 722 980 3 742 520 3.50 0.52
Oman 4 167 044 3 930 261 3 620 364 -5.68 -7.88
Colombia 2 991 941 2 746 038 3 127 994 -8.22 13.91
Morocco 1 826 100 2 558 400 3 070 000 40.10 20.00
Pakistan 2 375 158 2 485 086 2 597 395 4.63 4.52
Peru 2 031 134 2 086 335 2 234 582 2.72 7.11
Costa Rica 1 329 679 1 880 513 1 960 267 41.43 4.24
Dominican Republic 1 583 047 1 708 108 1 795 221 7.90 5.10
Ecuador 1 594 711 1 675 446 1 786 981 5.06 6.66
Argentina 1 986 480 2 141 388 1 775 574 7.80 -17.08
Bangladesh 1 435 599 1 500 161 1 655 365 4.50 10.35
Jamaica 1 855 400 1 703 900 1 638 100 -8.17 -3.86
Bolivarian Republic of
1 249 500 1 348 211 1 416 970 7.90 5.10
Venezuela
Bahamas 1 202 000 1 400 000 1 399 300 16.47 -0.05
Kuwait 1 126 668 1 215 675 1 277 674 7.90 5.10
Guatemala 1 158 400 1 211 600 1 273 392 4.59 5.10
Lebanon 882 922 1 117 300 1 210 400 26.55 8.33
Nigeria 877 679 1 010 836 1 062 389 15.17 5.10
Kenya 903 400 894 000 1 010 000 -1.04 12.98
Angola 750 000 913 000 1 000 000 21.73 9.53
Uruguay 753 000 861 000 904 911 14.34 5.10
Yemen 760 192 820 247 862 079 7.90 5.10
Ukraine 748 889 808 051 849 262 7.90 5.10
Syrian Arab Republic 737 448 795 707 836 288 7.90 5.10
Table 4.1. Container port throughput for 80 developing countries/territories and economies in transition,
20122014 (TEUs) (continued)
Preliminary figures Percentage change Percentage change

Country/territory 2012 2013
for 2014 20132012 20142013
Ghana 735 229 793 312 833 771 7.90 5.10

Jordan 703 354 758 919 797 624 7.90 5.10
Cte d'Ivoire 690 548 745 102 783 102 7.90 5.10
Djibouti 681 765 735 624 773 141 7.90 5.10
Trinidad and Tobago 651 332 702 787 738 630 7.90 5.10
Honduras 665 354 670 726 704 934 0.81 5.10
Mauritius 576 383 621 917 653 635 7.90 5.10
United Republic of
487 786 526 321 638 023 7.90 21.22
Tanzania
Tunisia 529 956 571 823 600 986 7.90 5.10
Sudan 498 938 538 354 565 811 7.90 5.10
Libya 369 739 434 608 456 773 17.54 5.10
Senegal 396 822 428 171 450 008 7.90 5.10
Qatar 393 151 424 210 445 845 7.90 5.10
Congo 385 102 415 525 436 717 7.90 5.10
Benin 359 908 388 341 408 146 7.90 5.10
Papua New Guinea 337 118 363 750 382 301 7.90 5.10
Bahrain 329 470 355 498 373 628 7.90 5.10
Cameroon 323 917 349 507 367 332 7.90 5.10
Algeria 317 913 343 028 360 522 7.90 5.10
Mozambique 289 411 312 274 328 200 7.90 5.10
Cuba 265 281 286 238 300 836 7.90 5.10
Georgia 256 929 277 226 291 365 7.90 5.10
Cambodia 254 760 274 886 288 905 7.90 5.10
Myanmar 215 945 233 005 244 888 7.90 5.10
Guam 208 181 224 628 236 084 7.90 5.10
Gabon 174 597 188 390 197 998 7.90 5.10
El Salvador 161 000 180 600 189 811 12.17 5.10
Madagascar 160 320 172 986 181 808 7.90 5.10
Croatia 155 724 168 026 176 596 7.90 5.10
Aruba 147 716 159 385 167 514 7.90 5.10
Namibia 115 676 124 815 131 180 7.90 5.10
Brunei Darussalam 112 894 121 813 128 026 7.90 5.10
New Caledonia 102 423 110 514 116 150 7.90 5.10
Nicaragua 93 737 96 472 101 392 2.92 5.10
Subtotal 443 672 437 466 256 062 491 169 015 5.09 5.34
Other reported 689 351 739 276 761 420 7.24 3.00
Total reported 444 361 788 466 995 338 491 930 435 5.09 5.34
World Total 624 480 174 651 200 742 684 429 339 4.28 5.10
Source: UNCTAD secretariat, derived from various sources including Dynamar B.V. publications and information obtained by the
UNCTAD secretariat directly from terminal and port authorities.
Notes: Singapore includes the port of Jurong. The term other reported refers to countries/economies with fewer than 100,000TEUs
per year. Many figures for 2013 and 2014 are UNCTAD estimates (these figures are indicated in italics). Country totals may
conceal the fact that minor ports may not be included; therefore, in some cases, the actual figures may be different than
those given.
In the first quarter of 2015, Chinese ports handled in developing countries share of world container
49million TEUs, an increase of 7.3per cent over the throughput. The two main drivers of this process are
same period in the previous year. This was largely due developing countries greater participation in global
to a recovery in the United States economy. The figures value chains and the continued increase of containers
would suggest that the major Chinese exporting ports for transporting dry bulk cargo.
experienced a significant growth while the growth Table 4.2 shows the worlds 20 leading container
of importing ports (for example, in bulk cargo) has ports for the period 20122014. The top 20 container
slowed. This could mean that factories are reducing ports accounted for approximately 45.7 per cent
their stockpiles in anticipation of a slow growth in the of world container port throughput in 2014. These
world economy. ports showed a 4.5 per cent increase in throughput
Table 4.1 lists the container throughput of 80 compared to 2013, the same as the estimated
developing countries and economies in transition with increase for 2013. The list includes 16 ports from
a national throughput greater than 100,000 TEUs (port developing economies, all of which are in Asia; the
throughput figures for 126 countries/territories are remaining four ports are from developed countries,
available at http://stats.unctad.org/TEU). In 2014, the three of which are located in Europe and one in North
container throughput for developing economies grew America. All of the top 10 ports continue to be located
by an estimated 5.34 per cent to 491 million TEUs. in Asia, signifying the importance of the region as a
This growth is higher than the 5.1per cent seen in the manufacturing hub. Ningbo remained in fifth position
previous year. The container throughput growth rate but achieved the highest growth at 12 per cent, a
for all countries in 2014 is estimated at 684.4million growth rate closely followed by Dubai and Tanjung
TEUs, a rise of 5.1per cent over the previous year. Pelepas. The port of Tanjung Pelepas moved up two
places to eighteenth position following completion of
Developing economies share of world throughput infrastructure investments. The port of Long Beach
increased by 0.2per cent to approximately 71.9per was displaced from the top 20 list due to low growth
cent. This continues the trend of a gradual rise as a result of labour disputes at the port and the higher
Table 4.2. Top 20 container terminals and their throughput, 20122014 (TEUs and percentage change)
Percentage change Percentage change
Port Name 2012 2013 2014
20132012 20142013
Shanghai 32 529 000 36 617 000 35 290 000 12.57 -3.62
Singapore 31 649 400 32 600 000 33 869 000 3.00 3.89
Shenzhen 22 940 130 23 279 000 24 040 000 1.48 3.27
Hong Kong 23 117 000 22 352 000 22 200 000 -3.31 -0.68
Ningbo 15 670 000 17 351 000 19 450 000 10.73 12.10
Busan 17 046 177 17 686 000 18 678 000 3.75 5.61
Guangzhou 14 743 600 15 309 000 16 610 000 3.83 8.50
Qingdao 14 503 000 15 520 000 16 580 000 7.01 6.83
Dubai 13 270 000 13 641 000 15 200 000 2.80 11.43
Tianjin 12 300 000 13 000 000 14 060 000 5.69 8.15
Rotterdam 11 865 916 11 621 000 12 298 000 -2.06 5.83
Port Klang 10 001 495 10 350 000 10 946 000 3.48 5.76
Kaohsiung 9 781 221 9 938 000 10 593 000 1.60 6.59
Dalian 8 064 000 10 015 000 10 130 000 24.19 1.15
Hamburg 8 863 896 9 258 000 9 729 000 4.45 5.09
Antwerp 8 635 169 8 578 000 8 978 000 -0.66 4.66
Xiamen 7 201 700 8 008 000 8 572 000 11.20 7.04
Tanjung Pelepas 7 700 000 7 628 000 8 500 000 -0.94 11.43
Los Angeles 8 077 714 7 869 000 8 340 000 -2.58 5.99
Jakarta 6 100 000 6 171 000 6 053 000 1.16 -1.91
Total top 20 284 059 418 296 791 000 310 116 000 4.48 4.49
Source: UNCTAD secretariat, based on Dynamar B.V., June 2015, and various other sources.
Note: Singapore does not include the port of Jurong.
rates of growth of other ports. Jakarta port was a new publicity, for example Malaysias Westports set a
entrant to the list as a result of a continued steady new world record for container terminal productivity,
increase in demand that has seen throughput at the notching an impressive 793 moves in one hour over
port grow by more than 50per cent since 2009 due to the CSCL [China Shipping Container Lines] Le Havre
the buoyant economy (Drewry, 2015). (9,572 TEU vessel) with the deployment of nine twin-lift
cranes (Westports, 2015). Ports and terminals rarely
publish data on their performance that allow shippers
B. INTERNATIONAL TERMINAL to make informed choices or policymakers to identify
OPERATORS best practices. While there may be many reasons
for this, such as no statutory requirement or limited
1. Operational performance readership, the strongest reason is likely to be the
unnecessary scrutiny it would generate without any
The performance of ports and terminals can significantly immediate return. In an age where many companies
affect a countrys trade competitiveness. One chief chief executive officers have limited time in their
economist even cited port congestion as the new positions and short reporting periods the situation is
barrier to international trade (van Marle, 2015). There unlikely to change. However, international pressure,
are many determinants to port/terminal performance for instance in the area of sustainability reporting, may
for example, labour relations, number and type of help to change this situation. Until then it tends to be
cargo handling equipment, quality of backhaul area, the customers who report on the performances of
port access channel, land-side access, customs their service providers. For instance, Drewry Shipping
efficiency, and the like. These specific operational Consultants has launched its Drewry Benchmarking
indicators are generally more useful to port operators Club. The club is limited to importers and exporters (that
and do not include non-tangible assessments is, buyers of shipping services) and excludes providers
(for example, users perceptions, service quality, of shipping services (carriers) and intermediaries/
innovation levels, and the like) that port customers brokers (forwarders/non-vessel operating common
may find more beneficial (Cetin, 2015). carriers). While it aims to benchmark ports and routes,
Terminal operators rarely publish their performance its primary focus seems to be on freight costs. The
ratings, but are sometimes obliged to do so due to JOC recently produced its port productivity rankings,
which examine loading/unloading data from 17
carriers at over 500 ports worldwide. From these two
Table 4.3. Top global terminals berth initiatives it is clear that it is the ports customers (that
productivity, 2014 (container moves
is, shippers and carriers) who are sharing information
per ship, per hour on all vessel sizes)
for their mutual benefit about the ports performance.
Berth Ports may be forced to publish their own data should
Terminal Port Country
productivity they not agree with how their customers are assessing
APM Terminals Yokohama Yokohama Japan 180 them. Table 4.3 shows the ranking of port terminals
in 2014, with Yokohama ranking as the worlds most
Tianjin Port Pacific
Tianjin China 144 efficient container port, having increased productivity
International
United Arab
by 10 per cent over the previous year. Unlike other
DP World-Jebel Ali Terminal Jebel Ali 138 terminals, APM Terminals Yokohama has been
Emirates
Qingdao Qianwan Qingdao China 136 successful in improving its efficiency year after year
due to the synchronized process developed between
Tianjin Port Alliance
Tianjin China 132 the vessel and the container yard that eliminates
International
Ningbo Beilun (second) Ningbo China 127 virtually all wasted time between the quay crane and
yard equipment operations.
Guangzhou South China
Nansha China 122
Oceangate
Table 4.4 shows the productivity ranking of ports in
Republic of 2014 and the change over the preceding two years.
Busan Newport Co. Ltd. Busan 119
Korea
Some ports are home to several terminal operators,
Yantian International Yantian China 117
thus providing intra-port competition. For example,
Nansha Phase I Nansha China 117 the port of Tianjin, which is ranked in second place,
Source: JOC Port Productivity Database 2015. is home to numerous international terminal operators,
such as APM Terminals, China Merchants Holdings efficiency and that four out of six ports had an average
International, COSCO Pacific, CSX World Terminals efficiency score of 76per cent or higher for the period
OCCL, PSA and DPW. Interestingly, while all the under study (van Dyck, 2015). Yet in another study by
ports in this table experienced productivity gains of the JOC for all Africa, African ports were on average
between 30 and 60per cent in 2013 over the previous ranked as the least productive of all regional groups
year, in 2014 only three ports managed to continue (Data in Motion, 2015). The poor performance of port
the upward improvement. This suggests that port management and operations, together with other
performance and continued improvement are still procedural inefficiencies along the logistics chain, and
difficult to achieve. imbalanced freight rates that shipping lines charge
because of empty backhaul cargo, are all contributing
In a study involving 203 ports in 70 developing
factors to high transport costs (Bofinger et al., 2015).
countries, with 1,750 data points, it was observed
Every minute that a vessel stays at a terminal means
that operational changes rather than scale efficiency
money lost for the shipping company, and this in turn
(the process of adding more equipment) resulted in
places pressure upon the terminal operator to ensure
increases in port efficiency. It should be noted that
it does not lose business to more efficient competitors
pure efficiency is the result of input divided by output.
(ACSAEC, 2015). Port privatization is often seen as
With regard to ports, inputs may be numerous and
the best means to bring in private sector expertise and
difficult to calculate (for example, utilized space,
turn around the performance of a port. Many countries
multiple currencies operational hours and the like).
privatized their ports in the 1990s, but there are still
Most port-related studies avoid this shortcoming by
many State-owned and operated ports around the
measuring productivity (output) over a certain period.
world. In Viet Nam, the Government plans to privatize
Both efficiency and productivity tend to be referred
an estimated 432 State-owned enterprises during the
to interchangeably to a large extent. From 2000 to
period 20142015, including 19 seaports (Vietnam
2010 there was an upward trend in increasing port
Briefing, 2015).
efficiency within developing regions, from 47per cent
to 57 per cent. The main determinants were private When Governments review proposals for new port
sector participation, the reduction of corruption in the infrastructure projects it is difficult for them to judge
public sector and improvements in liner connectivity, whether the traffic volumes and marginal cost savings
as well as the increased provision of multimodal links will match predictions. In a recent survey of around
that led to an increase in the level of port efficiency in 500 terminals worldwide it was observed that the
developing regions (Surez-Alemn et al., 2015). Port average TEU per metre of quay per year was 1,072,
performance matters the most on a regional basis while the TEU per hectare was 24,791 and TEU per
where there is a real possibility that cargo can move gantry crane 123,489 (Drewry, 2014b). Some of the
to a competing, more efficient port. A study of ports in worst performing ports per TEU, hectare and crane
West Africa showed that they exhibited high levels of utilization were in North America. Varying levels of
Table 4.4. Worlds leading ports by productivity, 2014 (container moves per ship, per hour on all vessel
sizes and percentage increase)
Percentage Percentage
2012 berth 2013 berth 2014 berth
Port Country increase increase
productivity productivity productivity
2013/2012 2014/2013
Jebel Ali United Arab Emirates 81 119 138 47% 16%
Tianjin China 86 130 125 51% -4%
Qingdao China 96 126 125 31% -1%
Nansha China 73 104 119 42% 14%
Yantian China 78 106 117 36% 10%
Khor al Fakkan United Arab Emirates 74 119 108 61% -9%
Ningbo China 88 120 107 36% -11%
Yokohama Japan 85 108 105 27% -3%
Busan Republic of Korea 80 105 102 31% -3%
Xiamen China 76 106 90 39% -15%
Source: UNCTAD secretariat and JOC Port Productivity Database 2015.
cargo volumes, trans-shipment share and automation in Africa, Australia or North America. Revenue for the
of processes all contributed to the outcome. While company grew slightly in 2014 to $3.8billion, whereas
the provision of more space or bigger cranes is profit slightly decreased to $1.4 billion (PSA, 2014).
not a guarantee for additional cargo, it is useful for Among the major terminal operators, PSA International
policymakers to know when examining project is the market leader in terms of not only market share
proposals what they can expect from proposed new of global port throughput, but also the ratio of revenue
facilities. Interestingly, the study also shows that, on to profits.
average, gantry crane productivity tends to be about Hutchison Port Holdings Trust is the second largest
50 per cent of the maximum capacity advertised by international terminal operator by market share. With
the manufacturer. This could have a financial impact operations in China, including Hong Kong (China),
upon ports when planning future improvements. it is not as geographically diverse as some other
According to one study, the largest liner shipping international terminal operators. Its 2014 throughput
company, Maersk Line, makes around 31,000 port of approximately 24.2 million TEUs was up 6.3 per
calls, with 1,5001,800 moves per call, and spends cent over the previous year. Revenue increased
some 19 per cent of its total costs on ship fuel. A 1.9 per cent to HK$12.6 billion ($1.63 billion) for
7per cent reduction in port stay during a 1318-hour 2014, while operating profit increased 5.5per cent to
call would allow the company to steam slower once HK$4.2billion ($540million).
a vessel leaves port and reduce fuel consumption by APM Terminals has a geographical presence in
around $120 million per year (van Marle, 2015). The 39 countries. This includes 65 port and terminal
reduction in a ships time in port primarily depends on facilities and 200inland services. In 2014, its revenue
the performance of the port in fulfilling its functions. was the highest of all international terminal operators at
$4.5billion, an increase of 2.7per cent, while internal
2. Financial performance efficiencies pushed operating profit to $900million, an
increase of 14.4per cent from the previous year despite
The traditional role of ports as gateways between substantial losses in its Russian business. Of the leading
foreign and domestic markets has meant that growth global terminal operators, APM Terminals has seen the
in throughput and revenue for a port is reliant upon biggest impact of international sanctions placed on
external factors beyond the control of the port, such the Russian Federation. To illustrate this, volumes from
as the ability of the ports hinterland to either import or Asia to Russian Black Sea ports dropped almost 50per
export more goods. For terminal operators, replicating cent in the first four months of 2015, compared with the
home-grown efficiencies in foreign markets can be an same period in 2014 (Lloyds List Daily Briefing, 2015).
ideal way for the businesses to expand when faced APM Terminals has a 30.75 per cent stake in Global
with domestic limitations beyond their control. Many Ports, the Russian Federations leading operator, with
terminal operators have expanded horizontally (for seven maritime container terminals representing about
example, doing the same thing in a different place) or half of the countrys annual throughput. Financial shares
vertically (for example, by controlling different aspects in Global Ports dropped almost 80per cent from $16
of a supply chain). Presently there are numerous per share to just $3 in the year following the start of the
owners of terminal operators that control ports on a crisis (Pasetti, 2015).
worldwide basis. Together, the leading global container
DP World is the most geographically diverse of the
terminals accounted for around 300 million TEUs in
global terminal operators with a network of more
2013, or around 47per cent of the worlds container
than 65 terminals spanning six continents. Recent
port throughput (Drewry, 2014b).
new projects include DP World London Gateway and
The worlds largest terminal operator, PSA International Embraport (Brazil), which both became operational
(formally the Port of Singapore Authority) handled in 2013. Expansion to existing facilities occurred with
65.4 million TEUs in 2014, an increase of 5.5 per the opening of terminal 3 at its home port of Jebel
cent over the previous year. Of this figure, 33.6million Ali in the United Arab Emirates and a new container
TEUs are accounted for by its operations in the port of terminal at Southampton in the United Kingdom.
Singapore (+4.2per cent) and 31.9million TEUs by its In 2014, it handled 60 million TEUs, an increase of
international portfolio (+7.2per cent). Its international 8.9per cent over the previous year. In 2014, revenue
portfolio stretches across 16 countries and three increased by 10per cent to $3.4billion and profit by a
continents. However, it does not operate terminals similar growth rate to $675million.
From the above brief overview of the leading container terms of emissions, it is second only to the energy
terminal operators it can be seen that the enterprise consumed to regulate indoor temperature. In 1992,
is profitable. The top four global terminal operators UNFCCC considered how countries could limit
combined generated $3.5billion in profit in 2014 on total industrial emissions and the anticipated planetary
revenues of $13.3billion, an average return of 26per cent. climate change. However, it was realized that
For policymakers this poses a challenge profits earned emission reduction provisions in the Convention
by international terminal operators increase transport were inadequate and, as a result, new measures
costs, which can affect national competitiveness. Yet strengthening the global response to climate change
by having an efficient port and being better connected were adopted under the 1997 Kyoto Protocol. The
to international markets, transport costs could be Kyoto Protocol, which entered into force on 16
lower than otherwise possible. Ideally, having inter-port February 2005, legally binds developed countries to
competition between multiple ports is best, or where this emission reduction targets. There are now 195 Parties
is not possible, intra-port competition with the presence to the Convention and 192 Parties to the Protocol.
of multiple terminal operations in one port, could help Parties to the Protocol have continued the negotiations
keep transport costs low. Some countries such as India and have amended it to achieve more ambitious
and South Africa have set limits on the tariffs terminal results. The Kyoto Protocol in effect operationalizes
operators are allowed to charge, although these have UNFCCC by committing industrialized countries to
met with mixed results. Another issue to consider is that stabilize GHG emissions. It operates on the principle
global terminal operators must be financially empowered of common but differentiated responsibility, where
to address the increasing costs associated with meeting certain countries are obliged to make emission
sustainable development criteria. reductions in recognition of their contribution to the
existing GHGs. Emissions from national maritime
transport (for example, inland waterways, lakes and
C. SUSTAINABILITY CHALLENGES coastal shipping) and port emissions are included in
FACING PORTS the Kyoto Protocol. Emissions of CO2 by shipping were
estimated at 3.3per cent of global emissions for 2007
The economic, environmental and social challenges
(IMO, 2015). Greenhouse gas emissions produced
facing ports include: growing and concentrated traffic
from international maritime transport for example,
volumes brought about by ever-increasing ship size;
while sailing in international waters are, however, not
the cost of adaptation of port and port hinterland
included in the Kyoto Protocol. International maritime
infrastructure measures; a changing marketplace as
transport emissions are estimated at 83per cent of all
a result of increased alliances between shipping lines;
shipping emissions (Villalba and Gemechu, 2011). The
national budget constraints limiting the possibilities
Kyoto Protocol recognizes that, concerning maritime
of public funding for transport infrastructure; volatility
issues, countries must work through IMO. However,
in energy prices, the new energy landscape and the
IMO works on the principle of no less favourable
transition to alternative fuels; entry into force of the
treatment of ships, which means ships must not be
stricter sulphur limits in, for example, IMO ECA countries;
placed at a disadvantage because their country has
increasing societal and environmental pressure;
or has not ratified a convention. Thus, in the field of
potential changes in shipping routes from enlarged or
environmental protection, ports face a complicated
new international passages (for example, the existing
regulatory requirement as well as societal expectations
Suez and Panama Canals, and new proposals such as
(Lam and Notteboom, 2014). Such pressure can have
the Nicaragua and Kra Canals mentioned earlier); an
an impact on the further space for the ports to grow,
uncertain geopolitical situation and its effect on shifting
not only in terms of hectares, but also in terms of the
supply chains; further globalization of business and
environmental space concept.1 This means that
society; and barriers to internal markets (for example,
tackling maritime-related emissions is complicated
customs inspection) for maritime transport.
and that valuable time may be spent interpreting text
(Fitzgerald et al., 2011).
1. Environmental challenges
The ports with the greatest absolute emissions
The transportation industrys share of all the global attributable to shipping are Singapore, Hong Kong
energy consumed increased from 45 per cent in (China), Tianjin (China) and Port Klang (Malaysia). The
1973 to 62 per cent in 2010 (Hui-huang, 2015). In distribution of shipping emissions in ports is skewed:
the 10 ports with the greatest emissions represent and, in smaller amounts, CO, PM, non-CH4 volatile
19per cent of total CO2 emissions in ports and 22per organic compounds, CH4 and N2O (Fitzgerald et al.,
cent of SOx emissions. The port with the lowest 2011). Other pollutants include dust from bulk cargo
relative CO2 emissions (emissions per ship call) is handling, emissions related to electricity consumption,
Kitakyushu (Japan); the port of Kyllini (Greece) has the and gases from cargo handling equipment and
lowest SOx emissions. Other ports with relatively low trucks (Economic and Social Commission for Asia
emissions are situated in Greece, Japan, Sweden, the and the Pacific, 1992; and Villalba and Gemechu,
United Kingdom and the United States (Merk, 2014). 2011). Vibration, light pollution and wake damage
also give rise to a variety of issues. Ports tend to be
Shipping emissions in ports are substantial,
seen as sources of pollution because they are easily
accounting for 18million tons of CO2, 0.4million tons
identifiable, immovable and close to the community
of NOx, 0.2 million of SOx and 0.03 million tons of
most affected by the effects of the pollution. Health
PM10 (particulate matter with diameter inferior to 10
effects include bronchitic symptoms that have been
micrometres) in 2011. Around 85 per cent of ships
linked to NO2 and CO emissions, while exposure
emissions are attributable to two ship types, container
to SO2 is associated with respiratory issues and
ships and tankers. It is estimated that most shipping
premature births (Merk, 2014). Ports need employees
emissions in ports (CH4, CO, CO2 and NOx) will grow
from the local community and employees need their
fourfold until 2050. Asia and Africa are expected to
jobs, thus their relationship is much closer than it is to
see the sharpest increases in emissions, due to strong
ship operators. This means that cooperation between
port traffic growth and limited mitigation measures
ports and their local communities is mutually beneficial
(Merk, 2014).
and easier to facilitate. The challenge for ports is that
On 1 January 2015, IMO regulation 14 of annex VI communities have, through the advent of the Internet,
of MARPOL on ship emissions came into force. The become more empowered with access to scientific
regulation is intended to improve air quality by limiting information, more vocal and better organized. A port
the sulphur content of fuels used by ships operating authority thus needs to ensure not only that it provides
in ECAs, including ports, to 0.10 per cent. This will a safe working environment that protects workers
require existing vessels to switch to lower sulphur health and promotes their personal development but
content fuel while in an ECA or retrofit vessels with also provides social responsibility, ethical governance
scrubbers to clean the exhaust fumes before they enter and accountability. The port authority must show it
the atmosphere. Scrubbing uses a fluid containing manages environmental risks well and furthers the
alkaline material that absorbs SOx and neutralizes economic and social development of the surrounding
them. The remaining exhaust gases are then released region, as well as promotes equality and respect
and the residue waste sludge is stored on board until it for cultural diversity through the involvement of
can be transferred ashore and safely disposed of. New stakeholders in port development and operations
vessels are, however, being built to ensure that they (Doerr, 2011). For ports, the usual three pillars of
are fully compliant with MARPOL regulations. While sustainability (economic, environmental and social)
the impact of the new regulation is not yet clear, some must be entwined with an institutional dimension to
transport service providers believe that its immediate cater for multiple stakeholders.
effect will be to increase transport costs and move
The 2012 United Nations Conference on Sustainable
short-haul cargo from sea to road. Outside the ECAs,
the sulphur content of fuels is capped at 3.5per cent Development, known as Rio+20, acknowledged in
but set to be reduced to 0.50per cent from 1 January its outcome document (known as The Future We
2020 (or 2025, depending on the enforcement date Want) the importance of corporate sustainability
and the result of an IMO review on the availability of reporting and encouraged companies, especially large
low sulphur fuels). European ports have much lower or publicly listed companies, to consider integrating
emissions of SOx (5per cent) and PM10 (7per cent) sustainability information into their reporting cycles.
than their share of port calls (22per cent), which may To this end, UNCTAD was designated as one
be explained by the European Union regulation to use of the official implementing bodies for action on
low sulphur fuels at berth (Merk, 2014). sustainability reporting, primarily through its role as
the host of the Intergovernmental Working Group of
During their stay in ports, ships emit pollutants such Experts on International Standards of Accounting
as CO2, SO2, NOX (the sum of NO and NO2 emissions) and Reporting. In 2014, UNCTAD published a report,
entitled Best Practice Guidance for Policymakers environmental and socially responsible operations, as
and Stock Exchanges on Sustainability Reporting well as enhanced corporate governance systems.
Initiatives, recognizing the role stock exchanges
Monitoring emissions and reporting on them with a view
have in influencing companies. This report cited as
to reducing them over time requires the implementation
an example the fact that disclosure of policy and
of practical measures. The repositioning of empty
performance in connection with environmental and
container trucks within a port is a wasteful practice
social responsibility was only mandatory in 56per cent that can contribute to its overall emissions without
of 25 emerging markets, yet it was voluntarily reported transporting any goods. A proper computer-based
by 91per cent of 188 of the largest companies in those monitoring, planning and coordination system to
markets. Thus, mandatory rules are not necessarily reduce unnecessary repositioning could have a
the only course of action for policymakers simply significant impact on emissions without the need
nudging businesses in a particular direction can be to spend money on purchasing new equipment or
more effective. retrofitting exiting equipment with newer technology.
Such a system will be most effective and likely to lead
Sustainability reporting for ports and terminals is still
to the greatest emission savings if it operates on a
in its early stages. Key issues to address include the
concept of shared ownership of vehicles. Just as for
reduction of kilograms of CO2 emitted per modified
private cars, individual ownership of transport modes
TEU (kgCO2e/modTEU), the reduction in megajoules
tends to mean low occupancy and poor utilization
of energy used per total terminal moves, and the
rates. Any concept that includes sharing space on
reduction in fresh water consumption for cleaning
transport to and from a local dry port to a sea port
equipment. One terminal operator, DP World,
could reduce the amount of emissions in and around
reduced its fresh water consumption by 75per cent
the port.
(64 million litres) by installing water recycling plants.
DP Worlds sustainability reporting also announced Cold ironing, also known as alternative maritime
that the intensity of the companys CO2 emissions had power or onshore power, is the process of
been reduced by 3per cent over its 2013 figures to providing electrical power to a ship while at berth. This
15.8 kgCO2e/modTEU. This represents a significant means the ships engines can be turned off, thereby
decrease from the 20.2 kgCO2e/modTEU it reported reducing fuel emissions, vibrations and noise. Cold
for 2008. DP Worlds sustainability reporting has four ironing displaces power generation from the vessel
main pillars: community, environment, marketplace, to a centralized power source, usually a power grid,
and people and safety. It has a dedicated sustainability which is generally more energy-efficient (GreenSync,
advisory committee that sets development plans and 2015). Cold ironing does not eliminate emissions
policy and a sustainability champion team to identify but transfers them to another location and may or
best practices. may not be more polluting. The spread of ultra-low
sulphur fuel and exhaust gas scrubbers have made
Other voluntary measures exist whereby a port may significant air quality improvements around ports
report upon its environmental impact. For instance, and coastal zones in recent years and has led some
in Europe, the Port Environmental Review System, commenators to suggest that cold ironing may
implemented by the European Sea Ports Organization, become obsolete (The Maritime Executive, 2015).
provides a series of commitments for a port authority However, cold ironing has the advantage that it can
to undertake, for example, the publication of a reduce noise and vibration emissions that cannot be
periodical report on the state of the environment, the eliminated by burning alternative fuels or by adopting
monitoring of a series of environmental indicators, exhaust capture solutions. In the European Union,
and the like. Another regional measure, which can be directive 2014/94/EU obliges member States to
applied to ports, is the Hawkama Environment, Social implement alternative infrastructure networks such as
and Governance Index for the Middle East and North shoreside power technology by December 2025. For
Africa region. The Hawkama Index was developed shipowners, switching to cold ironing may prolong the
in cooperation with Standard and Poors reporting life of a ships equipment but will incur upfront funding
agency, with the support of the International Finance in the form of electricity bills that may be higher than
Corporation. The index provides an incentive to listed the cost of fuel oils. Marine diesel is usually purchased
companies in these emerging markets to pursue free of tax, but whether onshore electricity will carry
sustainable business practices through improved the same advantage depends upon the national
Government. There is no international uniform voltage the Pacific Maritime Association lasted months and
and frequency requirement when it comes to plugging led to severe traffic disruption to vessels entering and
in ships to national grids. Some ships use 220 volts at leaving the countrys 29 west coast ports (Vekshin,
50 Hz or 60 Hz, while others use 110 volts. 2015). In the port of Callao, Peru, a new system
designed to automate the roster of shift workers met
2. Social challenges with protests resulting in the closure of the ports main
container terminal (Lloyds List Daily Briefing, 2015).
The main social challenges facing ports today include The challenge for Governments and port operators is
safety, security and reliability: safety, in terms of in determining how to meet the demands of increased
ensuring that employees or the general public are not automation and yet still provide valued employment.
injured; security, in respect of preventing dangerous Deregulation, which often precedes port privatization,
or illegal goods from being smuggled into or out of can, however, lead to higher wages for those that
ports; and reliability, in ensuring that the port is resilient remain in the industry. Research has found that the
enough to be able to continue at optimum performance real (adjusted for inflation) hourly and weekly wages
levels regardless of any unwanted human or natural of United States union dockworkers increased by
disturbance. Labour issues are, however, perhaps the 14.3per cent and 15.3per cent, respectively, in the
most difficult of all issues to overcome. Dock work post-deregulation period (Talley, 2009).
has traditionally been labour intensive, but increasingly
labour-saving technologies are being introduced. The 3. Conclusions
reform process usually starts with a port privatization
process, of which retrenchment of labour is often a With increased volumes, greater efficiencies and
key feature. Any reduction in a workforce can cause profits are materializing for terminal operators but
considerable discontent both for the remaining workers not necessarily for port authorities. The immediate
and the larger community that is reliant on the dock challenge for ports is not only adapting to these
workers salaries. Yet in many places dock workers are increased volumes but attending to global issues
employed under a protective status that limits access such as climate change mitigation and adaption.
to the labour market to approved persons only. In Increased automation is both helping and hindering
Europe, there has long been an attempt to harmonize this process. While human labour per se produces
dock workers throughout the European Union, but as no harmful emissions, it is increasingly being replaced
yet no clear-cut solution exists (Verhoeven, 2011). In by automated machines that, while on the one hand
2014, dock workers in the Port of Piraeus protested increase terminal and port efficiency and may help
about working conditions that included 16-hour lower transport costs, yet on the other hand tend to
working shifts (Vassilopoulos, 2014). In 2014 and increase harmful emissions within the port area. The
2015 in the United States, discussions between the challenge for policymakers is to achieve the right
International Longshore and Warehouse Union and policy mix that benefits both industry and society.
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ENDNOTES
1
The concept of environmental space describes the total amount of non-renewable resources, agricultural
land and forests that can be used globally without impinging on access by future generations to the
same resources. For one explanation of the environmental space concept, see the European Environment
Agency: http://www.eea.europa.eu/publications/92-9167-078-2/page003.html (accessed 22 September
2015).
LEGAL ISSUES
5
AND REGULATORY
DEVELOPMENTS
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 greenhouse gas (GHG) emissions from international shipping, several regulatory measures
were adopted at IMO, and the third IMO GHG 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 (HNS Convention) which, however, is not yet in
force 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 (WCO) Framework of Standards to Secure and Facilitate Global Trade
(SAFE Framework) in June 2015, which includes a new pillar 3: Customs-to-other government
and inter-government agencies. 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. However, concern remains 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.
A. IMPORTANT DEVELOPMENTS IN are an essential element in our emerging vision for

sustainable development, including the new set of
TRANSPORT LAW sustainable development goals now being prepared
to guide the global fight against poverty for the next
1. Adoption of the International Code 15 years (United Nations Environment Programme,
for Ships Operating in Polar Waters 2015). Noting that adopting agreements on climate
change and ending poverty will demand that
The International Code for Ships Operating in Polar [Governments] look at the essential role of [the] worlds
Waters (Polar Code), a new mandatory instrument oceans, he called for a commitment to using the gift
establishing safety and environmental rules that are of the oceans peacefully, equitably and sustainably for
applicable to both Arctic and Antarctic shipping, was generations to come.3
recently adopted at IMO. As noted in its preamble,
Polar waters deserve particular attention due to
the Polar Code has been developed to supplement
special conditions that make them more vulnerable
existing IMO instruments in order to increase the safety to the impacts of commercial shipping such as, for
of ships operation and mitigate the impact on the instance, ship-source pollution. Large populations of
people and environment in the remote, vulnerable and wildlife in polar areas are completely dependent on the
potentially harsh polar waters. Part I of the Polar Code, living resources in the oceans, and even a small oil spill
which establishes safety-related requirements, along may have devastating consequences for biodiversity
with associated amendments1 to make it mandatory and ecosystem health. Also, oil and chemical
under the International Convention for the Safety of discharges and spills persist for much longer in the
Life at Sea (SOLAS), was adopted in November 2014 colder polar waters, thus having a greater impact
by the IMOs Maritime Safety Committee (MSC) in on wildlife and on the livelihoods of people in these
response to the increasing numbers of ships operating areas, both directly and indirectly, through the impact
in Arctic and Antarctic waters. Part I of the Polar Code on food.4 At the same time, ships operating in polar
addresses the safety of shipping in polar waters and waters and people aboard them are also exposed
identifies measures required over and above standard to a number of unique risks due, particularly, to the
shipping regulations to ensure that ships can operate presence of large ice concentrations, poor weather
safely under the difficult conditions in these waters. conditions, extreme cold temperatures, remoteness
Part II of the Code, which addresses the prevention and associated difficulties. Problems faced include,
of pollution from shipping, along with associated for instance, structural risks and difficulties in ships
amendments to make it mandatory under MARPOL, operations, reduced efficiency of ships machinery
was adopted by the IMO Marine Environment and equipment, lack of updated charts and navigation
Protection Committee (MEPC) in May 2015. aids, difficulty in carrying out clean-up operations and
The complete Polar Code is expected to enter into difficulty or lack of availability of assistance from other
force on 1 January 2017 through the tacit acceptance ships in case of casualty.5
procedure.2 Thus, it will apply to new ships constructed While polar shipping poses distinct operational
on or after 1 January 2017. Ships constructed before challenges, the potential for shipping through Arctic
that date will need to meet the relevant requirements waters has increased significantly in recent years. As a
of the Code by the first intermediate or renewal survey, result of global warming and increasing rates of Arctic
whichever occurs first, after 1 January 2018. sea ice loss, new shipping lanes have opened up,
Background mainly in summer, which might considerably shorten
the shipping distances between Europe and Asia as
Oceans play a central role in helping regulate the compared to traditional routes, in particular those
climate, absorbing CO2, providing food and nutrition transiting through the Panama Canal. Thus, if the
and supporting livelihoods. However, ocean resources potential Arctic Sea lanes were fully open for traffic,
and services are exposed to threats including those savings on distance, time and costs as well as fuel
associated with GHG emissions and air pollution; could be achieved.6 For instance, a navigable North-
ocean acidification; illegal, unreported and unregulated West Passage offers a route between Tokyo and New
fishing; and marine pollution. As highlighted by the York that is 7,000 kilometres shorter than the route
United Nations Secretary-General in his remarks on through the Panama Canal. Taking into account
the occasion of World Oceans Day 2015, oceans canal fees, fuel costs and other relevant factors that
CHAPTER 5: LEGAL ISSUES AND REGULATORY DEVELOPMENTS 81
determine freight rates, the new trade lanes could cut deal with a wide range of safety, environmental and
the cost of a single voyage by a large container ship by seafarers issues. Many of these legal instruments
as much as 20per cent (Bergerson, 2008). Potential are widely accepted by States and their provisions
savings could be even greater for megaships unable to are applicable generally, including in the polar areas,
fit through the Panama and Suez Canals and currently for States that are parties to them. Main conventions
sailing around the Cape of Good Hope and Cape Horn. that establish mandatory rules and regulations
It has been suggested that these potential shortcuts include SOLAS, MARPOL and the Maritime Labour
could foster greater competition with existing routes, Convention, 2006 (MLC).
including through a reduction in transport costs,
SOLAS10 is the main convention in the area of shipping
thereby promoting trade and international economic
safety, establishing international safety standards
integration (Wilson et al., 2004).
for the construction, machinery, equipment and
While the economic viability of trade along these new operation of ships.11 As regards marine environmental
shipping lanes remains to be more fully explored, the protection, the main convention is MARPOL,12 which
volume and diversity of polar shipping is predicted aims at the prevention of pollution of the marine
to grow over the coming years. Challenges related environment by ships from operational or accidental
to commercial shipping in an area which is both causes; six technical annexes specifically deal with
environmentally sensitive and operationally difficult prevention and control of pollution by oil (annex I);
need to be addressed, including through regulatory noxious liquid substances carried in bulk (annex II);
measures that serve to ensure that polar shipping harmful substances carried by sea in packaged form
develops in a safe and sustainable way, protecting (annex III); sewage from ships (annex IV); garbage
both the safety of life at sea and the sustainability of the from ships (annex V); and air pollution from ships
polar environments.7 Communities living in the polar (annex VI).13 Also worth noting in the context of
areas may require capacity-building assistance to pollution control and navigational safety is the Nairobi
respond to the challenges associated with increasing Wreck Removal Convention, 2007, which entered
commercial shipping in the region.8 into force on 14 April 2015, key features of which
were highlighted in last years Review of Maritime
Regulatory framework for polar shipping Transport (UNCTAD, 2014a).14 The regulation of
seafarers issues also plays an important role, in
The framework instrument governing the rights and
particular given that seafarers working and living
responsibilities of nations in their use of oceans and
conditions can affect not only their own well-being
the regulation of shipping is the 1982 United Nations
and safety, but also the safety of ships and the
Convention on the Law of the Sea (UNCLOS), whose
protection of the marine environment from pollution.
provisions also apply in polar areas, with respect
The MLC,15 consolidating more than 68 international
to the jurisdictional status of polar waters and
labour standards relating to seafarers, is the main
international straits, maritime boundaries, navigational
international instrument that addresses seafarers
rights and freedoms, as well as coastal and port
working and living conditions. Conditions in relation
State control.9 Particularly relevant is article 234 of the
to seafarer competency, training and other matters
Convention entitled Ice-covered areas providing that
related to ensuring the safety of ships and the people
Coastal States have the right to adopt and enforce
on board are mainly addressed through STCW and
non-discriminatory laws and regulations for the
SOLAS. Amendments to the STCW and the STCW
prevention, reduction and control of marine pollution
Code, adopted in Manila in June 2010, included
from vessels in ice-covered areas within the limits
Training guidance for personnel on ships operating
of the exclusive economic zone. Such safety and
in ice-covered waters, and Measures to ensure
environmental standards may be adopted by States
the competency of masters and officers of ships
either individually, through their national legislations, or
operating in polar waters.
collectively, through conventions and other instruments
negotiated at international organizations, or regionally. The development of specific rules dedicated to polar
The provisions of UNCLOS are supplemented by shipping, which complement the general instruments
a broader regulatory framework, consisting of a on maritime safety and marine environmental
number of international conventions and other legal protection mentioned above, began in the early
instruments negotiated and adopted mainly at IMO 1990s, initially with a regulatory focus on the Antarctic
and the International Labour Organization (ILO), which area. For example, IMO designated the waters south of
60 degrees south latitude as an Antarctic Special Area16 in part I-B. Mandatory provisions on pollution prevention
under MARPOL, for annex I (Prevention and control of are contained in part II-A, again supplemented by related
pollution by oil),17 annex II (Noxious liquid substances)18 recommendations, set out in part II-B.
and annex V (Garbage from ships).19 In addition,
Part I-A of the Polar Code, entitled Safety measures,
an amendment to MARPOL annex I prohibited the
includes chapters on: general issues; polar water
carriage and use of heavy fuel oils in Antarctic waters.20
operational manuals; ship structure; subdivision
Moreover, under the Antarctic Treaty System,21 much
and stability; watertight and weathertight integrity;
stricter environmental standards for vessel wastewater
machinery installations; fire safety and protection;
and garbage (including food waste) discharge were
life-saving appliances and arrangements; safety of
put in place for the Antarctic.22 Beginning in the 2000s,
navigation; communication; voyage planning; staffing
some of the regulatory focus shifted to the Arctic and
and training. Each of these chapters sets out goals,
in 2002, IMO approved voluntary Guidelines for ships
functional requirements and relevant regulations. Part
operating in Arctic ice-covered waters (IMO, 2002).
I-B establishes Additional guidance regarding the
These provide requirements additional to those already
provisions of the introduction and part I-A.
contained in SOLAS and MARPOL, taking into account
the specific climatic conditions in Arctic waters, in order Part II-A of the Polar Code, entitled Pollution
to meet appropriate standards of maritime safety and prevention measures includes chapters on: prevention
pollution prevention. With scientific findings increasingly of oil pollution; control of pollution from noxious
suggesting a greater potential for commercial shipping liquid substances in bulk; prevention of pollution by
through newly opened shipping lanes, in December harmful substances carried by sea in packaged form;
2009 voluntary guidelines for ships operating in polar prevention of pollution by sewage from ships; and
waters were adopted, applicable to both Arctic and prevention of pollution by garbage from ships. Part
Antarctic areas (IMO, 2009). In February 2010, work II-B contains Additional guidance to part II, including
commenced at IMO to turn these guidelines into a also guidance on other environmental conventions
legally binding instrument (the Polar Code) that would and guidelines, more specifically related to ballast
help ensure environmental protection and foster the water management and anti-fouling coatings.
sustainable development of shipping in polar waters The Polar Code will apply to passenger ships and cargo
both in the Arctic and the Antarctic. ships of 500 GT and above, and covers the full range
of shipping-related matters relevant to navigation in
Key features of the Polar Code
waters surrounding the two poles. It will require ships
As stated in its introduction, the goal of the Polar intending to operate in Arctic and Antarctic waters
Code is to provide for safe ship operation and the to undergo an assessment, taking into account the
protection of the polar environment by addressing anticipated range of operating conditions and hazards
risks present in polar waters and not adequately the ship may encounter in the polar waters, and apply
mitigated by other instruments of the IMO. The Code for a Polar Ship Certificate, which would classify the
acknowledges that polar water operation may impose vessel according to the categories below:
additional demands on ships, their systems and their
Category A ship: Designed for operation in at least
operation, beyond existing requirements of SOLAS,
medium first-year ice which may contain old ice
MARPOL and other relevant binding IMO instruments.
inclusions (polar class 1 to 5 or equivalent);
It also acknowledges that while Arctic and Antarctic
waters have similarities, there are also significant Category B ship: Designed for operation in at
differences. Hence, although the Code is intended to least thin first-year ice which may contain old ice
apply as a whole to both Arctic and Antarctic, the legal inclusions (polar class 6 and 7 or equivalent);
and geographical differences between the two areas Category C ship: Designed for operation in open
have been taken into account.23 water or in ice conditions less severe than those in
categories A and B.
The Polar Code consists of two substantive parts
dealing, respectively, with safety (part I) and pollution Ships will also need to carry a Polar Water Operational
prevention (part II), together with an introduction which Manual to provide the owner, operator, master and
contains mandatory provisions applicable to both parts I crew with sufficient information regarding the ships
and II. Mandatory provisions on safety measures are set operational capabilities and limitations to support their
out in part I-A, while related recommendations are set out decision-making process.
Key elements of part II of the Code regarding of GHG emissions from international shipping was
environmental issues include: not addressed, as further discussions on this had
Discharge into the sea of oil or oily mixtures from been postponed to a future session.26 It should be
any ship is prohibited. Oil fuel tanks must be recalled that a new set of technical and operational
separated from outer shells; measures to increase energy efficiency and reduce
emissions of GHGs from international shipping had
Discharge into the sea of noxious liquid substances, been adopted in 2012 (IMO, 2011, annex 19).27 This
or mixtures containing such substances, is package of measures, introducing the EEDI for new
prohibited; ships and the SEEMP for all ships, was added by way
Discharge of sewage is prohibited unless of amendments to MARPOL annex VI through the
performed in line with MARPOL annex IV and introduction of a new chapter 4 entitled Regulations
requirements in the Polar Code; on energy efficiency for ships, which entered into
Discharge of garbage is restricted and only force on 1 January 2013. Guidelines and unified
permitted in accordance with MARPOL annex V interpretations to assist in the implementation of
and requirements in the Polar Code. this set of technical and operational measures were
subsequently adopted at IMO in 2012, 2013 and
In addition, some non-mandatory guidance is provided 2014. In addition, a Resolution on promotion of
regarding measures to address, inter alia, potential technical cooperation and transfer of technology
threats from invasive species introduced via ballast relating to the improvement of energy efficiency of
water discharges24 or through hull fouling (part II-B). ships was adopted in May 2013, and a new study to
Part II does not appear to provide significant additional provide an update to the IMO 2009 GHG emissions
protection for Antarctic waters because there are estimate for international shipping was completed in
already a number of regulations in place that prohibit 2014. Information about relevant deliberations and
the discharge of oil, noxious liquids and various forms outcomes during the sixty-seventh and sixty-eighth
of garbage in those waters. It will, however, improve sessions of MEPC is presented below.
the protection of Arctic waters from the discharge of
Reduction of greenhouse gas emissions from
these wastes, bringing the requirements for Arctic
international shipping
waters more in line with the existing protections in
place for Antarctic waters.
An important development during the sixty-seventh
session of MEPC was the approval of the third IMO
B. REGULATORY DEVELOPMENTS GHG study 2014 (IMO, 2014a). The study provides
updates to earlier estimates for GHG emissions
RELATING TO THE REDUCTION OF from ships contained in the second IMO GHG
GREENHOUSE GAS EMISSIONS study (2009). The third IMO GHG study estimates
that international shipping emitted 796 million tons
FROM INTERNATIONAL SHIPPING of CO2 in 2012, compared to 885 million tons in
AND OTHER ENVIRONMENTAL 2007. This represented 2.2 per cent of the global
emissions of CO2 in 2012, compared to 2.8per cent
ISSUES in 2007.28
The main findings of the study as regards scenarios
1. Reduction of greenhouse gas for 20122050 include the following:
emissions from international
shipping and energy efficiency Maritime CO2 emissions are projected to
increase significantly. Depending on future
During the sixty-seventh and sixty-eighth sessions of economic and energy-related developments, this
MEPC,25 States continued to focus on the reduction studys business as usual scenarios project an
of CO2 emissions from international shipping, including increase by 50 to 250 per cent in the period to
through improving ships design and size, better 2050. Further action on efficiency and emissions
speed management, and other operational measures, can mitigate the emissions growth, although all
to reduce ships consumption of fuel. The issue of scenarios but one project emissions in 2050 to be
possible market-based measures for the reduction higher than in 2012;
Among the different cargo categories, demand Amendments to the 2013 Interim Guidelines
for transport of unitized cargos is projected to for determining minimum propulsion power to
increase most rapidly in all scenarios; maintain the manoeuvrability of ships in adverse
Emission projections demonstrate that conditions (IMO, 2014b, annex 6);31
improvements in fuel efficiency are important Amendments to the 2014 Guidelines on survey
to mitigate emission increases. However, even and certification of the Energy Efficiency Design
modelled improvements with the greatest energy Index (IMO, 2015a, annex 6), and endorsed their
savings do not yield a downward trend. Compared application from 1 September 2015, at the same
to regulatory or market-driven improvements in time encouraging earlier application;
efficiency, changes in the fuel mix have a limited
impact on GHG emissions, assuming that fossil Amendments to the 2013 Interim Guidelines
fuels remain dominant; for determining minimum propulsion power to
maintain the manoeuvrability of ships in adverse
Most other emissions increase in parallel with CO2
conditions (IMO, 2015a, annex 7);32
and fuel, with some notable exceptions. Methane
emissions are projected to increase rapidly (albeit Amendments to the 2014 Guidelines on the
from a low base) as the share of LNG in the fuel method of calculation of the attained EEDI for new
mix increases. Emissions of NOx may increase at ships (IMO, 2015a, annex 8).
a lower rate than CO2 emissions as a result of tier MEPC also considered a progress report from the
II and tier III engines entering the fleet. Emissions intersessional correspondence group established at its
of PM show an absolute decrease until 2020, and previous session to review the status of technological
SOx continue to decline through 2050, mainly developments relevant to implementing phase 2
because of MARPOL annex VI requirements on of the EEDI regulations33 and re-established the
the sulphur content of fuels. correspondence group to further the work and submit
At its sixty-eighth session, MEPC considered a an interim report to the sixty-ninth session of MEPC.
submission from one member State calling for a
Further technical and operational measures for
quantifiable reduction target for GHG emissions
enhancing the energy efficiency of international
from international shipping, consistent with keeping
shipping
global warming below 1.5C, and for agreement on
the measures necessary to reach that target (IMO, In respect of a proposed data collection system for
2015a, annex 25).29 During the discussion, speakers the fuel consumption of ships, which could be used,
acknowledged the importance of the issue raised inter alia, to estimate CO2 emissions, MEPC at its
and of the establishment of emissions reporting for sixty-eighth session agreed that text prepared by the
international shipping as a matter of priority. They also intersessional correspondence group34 should be
recognized that, despite the measures already taken by further developed in the form of full language for the
IMO regarding the reduction of emissions from ships, data collection system, which could be readily used for
more could be done. However, MEPC took the view voluntary or mandatory application of the system. The
that the priority at this stage should be to continue its core elements of the data collection system include
current work, in particular to focus on further reduction data collection by ships, functions of flag States in
of emissions from ships through the finalization of a relation to data collection and the establishment
data collection system for fuel consumption. of a centralized database by IMO. According to the
proposed text, data would be collected for ships of
Energy efficiency for ships
5,000 GT and above and include the ship identification
MEPC continued its work on further developing number, technical characteristics, total annual fuel
guidelines to assist member States in the implementation consumption by fuel type and in metric tons, and
of the mandatory energy-efficiency regulations for transport work and/or proxy data yet to be defined.
international shipping. At its sixty-seventh and sixty- The methodology for collecting the data would be
eighth sessions, MEPC in particular adopted: outlined in the ship-specific SEEMP. Data, aggregated
into an annual figure, would be reported by the
2014 Guidelines on survey and certification of shipowner/operator to the administration (flag State),
the Energy Efficiency Design Index (IMO, 2014b, which would submit the data to IMO for inclusion in
annex 5);30 a database, with access restricted to member States
only, and with data anonymized to the extent that the during combustion of carbon-based fuels. It is
identification of a specific ship would not be possible. distinguishable from other forms of carbon and
carbon compounds contained in atmospheric
MEPC noted that one purpose of the data collection
aerosol because of its unique combination and
system was to analyze energy efficiency, and for this
physical properties.
analysis to be effective some transport work data
needed to be included. However, at this stage the MEPC also noted that it was not possible at this stage
appropriate parameters have not been identified. MEPC to consider possible control measures to reduce the
recommended that an intersessional working group be impact on the Arctic of emissions of black carbon from
held to further consider transport work and/or proxies international shipping.37
for inclusion in the data collection system, further
consider the issue of confidentiality, and consider the Emissions of nitrogen oxides
development of guidelines identified in the text. As highlighted in previous issues of the Review of
Matters concerning the United Nations Framework Maritime Transport, measures have been adopted
Convention on Climate Change at IMO that require ships to gradually produce NOx
emissions below the tier III level. Tier III limits are almost
MEPC noted a document on the outcomes of the 70per cent lower than those of the preceding tier II,
United Nations Climate Change Conferences held in thus requiring additional technology. During its sixty-
Lima in December 2014 and in Geneva in February seventh and sixty-eighth sessions, MEPC continued
2015 (IMO, 2015b). It requested the IMO secretariat its consideration of issues related to progressive
to continue its cooperation with the UNFCCC reductions in NOx emissions from ship engines, and
secretariat, and to bring the outcome of the work of in particular:
IMO to the attention of appropriate UNFCCC bodies
Adopted amendments to MARPOL annex VI
and meetings, as necessary.
(IMO, 2014b, annex 9), concerning regulation
2 (definitions), regulation 13 (NOx) and the
2. Ship-source pollution and Supplement to the International Air Pollution
protection of the environment Prevention Certificate, in order to include reference
to gas as fuel and to gas-fuelled engines. These
(a) Air pollution from ships are expected to enter into force on 1 March 2016;
MEPC continued its work on developing regulations to Approved draft amendments to the NOX Technical
reduce emissions of other toxic substances from burning Code 2008 (testing of gas-fuelled engines and
fuel oil, particularly NOx and SOx. Together with CO2, dual-fuel engines for the NOx tier III strategy) (IMO,
these significantly contribute to air pollution from ships, 2014b, annex 3);
and are covered by annex VI of MARPOL,35 amended Approved draft amendments to MARPOL annex
in 2008 to introduce more stringent emission controls. VI (record requirements for operational compliance
During its sixty-eighth session, MEPC considered with NOX tier III ECAs) (IMO, 2014b, annex 4);
a number of amendments to existing guidance and Approved guidance on the application of regulation
other issues related to air pollution measures, and: 13 of MARPOL annex VI tier III requirements to
dual-fuel and gas-fuelled engines (IMO, 2015c);
Adopted 2015 Guidelines for exhaust gas cleaning
systems (IMO, 2015a, annex 1). These relate Adopted amendments to the 2011 guidelines
to certain aspects of emission testing regarding addressing additional aspects of the NOX
measurements of CO2 and SO2, clarification of the technical code 2008 with regard to particular
wash water discharge pH limit testing criteria, and requirements related to marine diesel engines
the inclusion of a calculation-based methodology fitted with selective catalytic reduction
for verification as an alternative to the use of actual systems (IMO, 2015a, annex 2);
measurements;
Agreed, for consistency and safety reasons, to
Approved the Bond et al.36 definition of black proceed with the development of guidelines for the
carbon for international shipping as a distinct type sampling and verification of fuel oil used on board
of carbonaceous material formed only in flames ships.
Thus, tier III standards will apply to a marine diesel scrubbers and switching to LNG as fuel. However,
engine that is installed on a ship constructed on or implementing these strategies may be costly. For
after 1 January 2016 and which operates in the North instance, the supply of low-sulphur marine gas oil
American ECA or the United States Caribbean Sea ECA remains a concern, and other distillate alternatives
that are designated for the control of NOx emissions. In available are expensive. Installing scrubbers or
addition, tier III standards will apply to installed marine exhaust gas SOx cleaning systems on ships may cost
diesel engines when operated in other ECAs that might $3 million$5 million per scrubber, and LNG retrofitting
be designated in the future for tier III NOx control. They is very expensive and not always feasible. Operators
will apply to ships constructed on or after the date of therefore risk being fined for breaching emission
adoption by MEPC of such an ECA, or a later date as restrictions and some of them may, in the short
may be specified in the amendment designating the term, choose to accept this situation (IHS Maritime
NOx tier III ECA.38 Furthermore, tier III requirements will Technology, 2014).
not apply to a marine diesel engine installed on a ship The 2010 guidelines for monitoring the worldwide
constructed prior to 1 January 2021 of less than 500 average sulphur content of fuel oils supplied for use
GT, of 24 metres or over in length, which has been on board ships (IMO, 2010, annex I) provide for the
specifically designed and is used solely for recreational calculation of a rolling average of the sulphur content for
purposes. These amendments are expected to enter a three-year period. The rolling average based on the
into force on 1 September 2015. Requirements for the average sulphur contents calculated for the years 2012
control of NOx apply to installed marine diesel engines 2014 is 2.47per cent for residual fuel and 0.13per cent
of over 130 kilowatt output power, and different levels for distillate fuel (IMO, 2013, 2014c and 2015d).
(tiers) of control apply based on a ships construction
date. Outside ECAs designated for NOx control, tier II At its sixty-eighth session, MEPC agreed that the
controls, required for marine diesel engines installed on IMO secretariat should initiate in 2015 a review of
ships constructed on or after 1 January 2011, apply. the availability of compliant fuel oil to meet the global
While IMO tier III standards will come into force for requirement that the sulphur content of fuel oil used
ships constructed from 1 January 2016 onwards, it has on board ships shall not exceed 0.50per cent as from
been noted that retrofitting existing vessels with tier III 1 January 2020.40 The fuel oil availability review will be
technology, where possible, could significantly enhance overseen by a steering committee41 and a final report
fuel efficiency for existing fleets, thus reducing both will be submitted to the seventieth session of MEPC
emissions and operational costs (The Ship Supplier, in autumn 2016.
2014). In addition, MEPC considered the report of a
correspondence group established to consider
Sulphur oxide emissions
possible quality control measures prior to fuel oil being
As reported in previous editions of the Review of delivered to a ship, and re-established it to further
Maritime Transport, with effect from 1 January develop draft guidance on best practices for assuring
2012, MARPOL annex VI established reduced SOx the quality of fuel oil delivered for use on board ships;
thresholds for marine bunker fuels, with the global further examine the adequacy of the current legal
sulphur cap reduced from 4.5per cent (45,000 parts framework in MARPOL annex VI for assuring the
per million (ppm)) to 3.5 per cent (35,000 ppm), quality of fuel oil for use on board ships; and submit a
outside an ECA. The global sulphur cap is expected report to the sixty-ninth session of MEPC.42
to be reduced further to 0.5per cent (5,000 ppm) from
Other issues
2020. Depending on the outcome of a review, to be
completed by 2018, as to the availability of compliant
During its sixty-seventh and sixty-eighth sessions,
fuel oil, this requirement could be deferred to 1 January
MEPC adopted the following amendments that are
2025. Within ECAs where more stringent controls on
expected to enter into force on 1 March 2016:
sulphur emissions apply, the sulphur content of fuel
oil must be no more than 1per cent, falling to 0.1per
Amendments to MARPOL annex I (IMO, 2014b,
cent (1,000 ppm) from 1January 2015.39
annex 7) concerning regulation 43 on special
To meet these new guidelines, shipowners and requirements for the use or carriage of oils in the
operators are adopting a variety of strategies. These Antarctic area, and prohibiting ships from carrying
include switching to low-sulphur fuels, installing heavy grade oil on board as ballast;
Amendments to MARPOL annex III (IMO, 2014b, During its sixty-seventh and sixty-eighth sessions,
annex 8) concerning the appendix on criteria MEPC agreed to grant basic approval to six,46 and
for the identification of harmful substances in final approval to four,47 ballast water management
packaged form. systems that make use of active substances. In
addition, at both sessions MEPC reviewed the status
MEPC also:
of the BWM Convention, which is close to fulfilling the
Approved two sets of guidelines to assist in oil spill remaining criteria (tonnage) for its entry into force. The
response, developed by the Subcommittee on Convention is set to enter into force twelve months
Pollution Prevention and Response: after the date on which no fewer than 30 States, the
Guidelines on international offers of assistance combined merchant fleets of which constitute not
in response to a marine oil pollution incident less than 35 per cent of the GT of world merchant
(IMO, 2015e, annex 13);43 shipping, have become Parties to it. As of 30 June
2015, 44 States, representing 32.86 per cent of the
Guidelines for the use of dispersants for worlds merchant fleet GT, had become parties.48
combating oil pollution at sea Part III
(Operational and technical sheets for surface MEPC also:
application of dispersants) (IMO, 2015e, Adopted Resolution MEPC.252(67) on guidelines
annex 14).44 for port State control under the BWM Convention
(IMO, 2014b, annex 1);
Adopted Amendments to regulation 12 of
MARPOL annex I, concerning tanks for oil residues Adopted a Plan of action for reviewing the
(sludge) (IMO, 2014d). These expand on the guidelines for approval of ballast water management
requirements for discharge connections and piping systems (G8) (IMO, 2014b, annex 2);
to ensure oil residues are properly disposed of. Adopted Resolution MEPC.253(67) on measures
to be taken to facilitate entry into force of the BWM
(b) Ballast water management Convention (IMO, 2014b, annex 3);49
One of the major threats to biodiversity is the Agreed on a Road map for the implementation
introduction of non-native species following the of the BWM Convention (IMO, 2014e, annex 2).
discharge of untreated ships ballast water. Indeed, This explains that ships that install ballast water
the introduction of harmful aquatic organisms and management systems approved in accordance
pathogens to new environments has been identified with the current guidelines (G8), (early movers),
as one of the four greatest threats to the worlds should not be penalized;
oceans.45 Even though ballast water is essential to Developed Draft amendments to regulation B-3 of
ensure safe operating conditions and stability for the BWM Convention to reflect Assembly resolution
vessels at sea, it often carries with it a multitude of A.1088(28) on application of the Convention,
marine species, which may survive to establish a with a view to approval at the sixty-ninth session
reproductive population in the host environment and consideration for adoption once the treaty
becoming invasive, out-competing native species and enters into force. These will provide an appropriate
multiplying into pest proportions. The proliferation of timeline for ships to comply with the ballast water
bioinvasions continues to increase in conjunction with performance standard prescribed in regulation D-2
the growth of seaborne trade, as approximately 10 of the Convention;
billion tons of ballast water per year are transferred Received a progress report on a study on the
globally, with potentially devastating consequences. implementation of the ballast water performance
In February 2004, the International Convention for the
standard described in regulation D-2 of the
Control and Management of Ships Ballast Water and
Convention (IMO, 2015f).50
Sediments (BWM Convention) was adopted under the
auspices of IMO to prevent, minimize and ultimately (c) Ship recycling
eliminate the risks to the environment, human health,
property and resources arising from the transfer of MEPC adopted the 2015 Guidelines for the
harmful aquatic organisms carried by ships ballast development of the Inventory of Hazardous Materials
water from one region to another (for a review, see (IMO, 2015a, annex 17). The Inventory is required
UNCTAD, 2011b). under the Hong Kong International Convention for the
Safe and Environmentally Sound Recycling of Ships, offshore exploration and exploitation activities was
2009 (Hong Kong Convention). The Convention is not again considered by the IMO Legal Committee at its
yet in force and at 30 June 2015 only three States had 102nd session. However, following discussion, the
ratified it. The Convention requires ratification by not Legal Committe decided that there was currently
less than 15 States to enter into force. no compelling need to develop an international
convention and, as already agreed at its previous
(d) Developments regarding the sessions, guidance on bilateral or regional agreements
International Convention on Liability and should continue to be developed (IMO, 2015g).
Compensation for Damage in Connection Offshore oil exploration poses particular technical,
with the Carriage of Hazardous and safety and operational challenges, which are
Noxious Substances by Sea, 1996, as increased in areas prone to earthquakes. Associated
amended by its 2010 Protocol oil pollution incidents may have potentially devastating
consequences, both in terms of economic loss and in
The issue of the entry into force of the 2010 HNS terms of effects on marine biodiversity and ecosystem
Convention was discussed by the Legal Committee of health, in particular in sensitive marine environments
IMO at its 102nd session in April 2015. In particular, like the Arctic. While offshore oil exploration and
the mandate of the HNS Correspondence Group was exploitation is expected to grow in the future,55 at
extended to develop a publication entitled Understanding present there is no international legal instrument to
the HNS Convention,51 another document entitled provide for liability and compensation in cases of
HNS Scenarios and a Legal Committee resolution that accidental or operational oil spills.
would help encourage States to implement the HNS
Convention and take the necessary steps to bring it With respect to liability and compensation for oil
into force within a reasonable time.52 As reported in pollution from offshore platforms, recent developments
previous editions of the Review of Maritime Transport, related to the Deepwater Horizon disaster, one of the
the HNS Convention, originally adopted in 1996, was largest accidental marine oil spills in the world and the
amended in 2010 in an effort to overcome a number largest environmental disaster in United States history,
of perceived obstacles to ratification. However, despite are also worth noting. The disaster, which occurred in
the recognized importance of an international liability the Gulf of Mexico about 40 miles south-east of the
and compensation regime for HNS carried by sea Louisiana coast on 20 April 2010, was a result of the
(UNCTAD, 2012a), to date no State has ratified the HNS explosion, sinking of and subsequent massive oil spill
Convention as amended in 2010. As a result, it is not from the Deepwater Horizon drilling rig, owned and
clear if and when the 2010 HNS Convention will enter operated by the company Transocean and drilling for
into force and an important gap in the global liability British Petroleum (BP). The explosion killed 11 workers,
and compensation framework remains.53 It may be injured 16 others and the total discharge was estimated
recalled that a comprehensive and robust international at 4.9 million barrels (210 million United States gallons;
liability and compensation regime is in place in respect 780,000 cubic metres).56 In June 2015, more than five
of oil pollution from tankers (the International Oil years after the disaster, BPs $18.7 billion settlement
Pollution Compensation Fund regime),54 while liability with various United States Government agencies of
and compensation for bunker oil pollution from ships claims resulting from the explosion was announced.
other than tankers is also effectively regulated in the This was reportedly in addition to $29.1 billion in
International Convention on Civil Liability for Bunker costs associated with the initial and ongoing clean-up
Oil Pollution Damage, 2001 (Bunker Oil Pollution operations and the settlement of civil claims brought
Convention). by businesses damaged by the oil spill, bringing the
final bill to approximately $50 billion.57
(e) Liability and compensation for Key developments in summary
transboundary pollution damage
resulting from offshore oil exploration As the above overview indicates, during the year
and exploitation under review there were a number of regulatory
initiatives and developments aimed at implementing
It should be noted that the need for international sustainable development objectives and policies.
regulation to provide for liability and compensation These include, notably, the adoption of the Polar
for transboundary pollution damage resulting from Code, which establishes mandatory provisions to
ensure ship safety and prevent environmental pollution partnerships.58 The SAFE Framework is a widely
in both Arctic and Antarctic waters. The Polar Code accepted instrument that serves as an important
is expected to enter into force on 1 January 2017. reference point for customs and for economic
In addition, the third IMO GHG study was finalized, operators alike and has evolved over the years
providing an updated estimate of CO2 emissions from as a dynamic instrument.59 It was first updated
international shipping over the period 20122050, and in 2007 to incorporate detailed provisions on the
several regulatory measures were adopted at IMO to conditions and requirements for customs and AEOs
strengthen the legal framework relating to ship-source (a status that reliable traders may be granted and
air pollution and the reduction of GHG emissions from that entails benefits in terms of trade-facilitation
international shipping. Guidelines for the development measures). In 2010, a SAFE Package was issued,
of the Inventory of Hazardous Materials, required which brought together all WCO instruments and
under the 2010 HNS Convention, were adopted, and guidelines that support implementation of the SAFE
further progress was made with respect to technical Framework, and in June 2012 a revised version of
matters related to the implementation of the 2004 the SAFE Framework included new parts 5 and 6
BWM Convention and the 2009 Ship Recycling in respect of coordinated border management and
Convention. Following the decision of the IMO Legal trade continuity and resumption. A new annex I for
Committee that there was no compelling need to definitions, including definition of high risk cargo,
develop an international convention, the important was also added.60
issue of liability and compensation for transboundary
A revised version of the SAFE Framework was
pollution resulting from offshore oil exploration and
issued in June 2015 that includes a new pillar
exploitation remains, for the time being, outside the
3, Customs-to-other government and inter-
ambit of international regulation.
government agencies, aiming to foster closer
cooperation between customs administrations
C. OTHER LEGAL AND REGULATORY and other government agencies involved in the
DEVELOPMENTS AFFECTING international trade supply chain (WCO, 2015a). Pillar
3 foresees cooperation at three levels: cooperation
TRANSPORTATION within a Government; cooperation between
This section highlights some key issues in the field of and among Governments; and multinational
maritime security and safety that may be of particular cooperation. Standards for each of these areas
interest to parties engaged in international trade have been developed to promote such cooperation
and transport. These include developments relating through a multi-tiered approach. A number of tools
to maritime and supply chain security and maritime have been developed by WCO that support this
piracy. pillar, notably the Compendiums on Coordinated
Border Management and Single Window, which are
1. Maritime and supply chain security continually updated. Another important aspect of
this SAFE version is the incorporation of standards
for pre-loading advance cargo information in
(a) World Customs Organization Framework respect of air cargo to carry out a first layer of security
of Standards to Secure and Facilitate risk analysis together with civil aviation authorities.
Global Trade It also includes definitions of container and risk
management. Furthermore, the instruments and
As noted in previous editions of the Review of
tools related to risk management mentioned in
Maritime Transport, in 2005, WCO adopted the SAFE
technical specifications of standards 4 and 7 of
Framework with the objective of developing a global
pillar 1 and other relevant sections have been
supply chain framework, while also recognizing the
updated in view of the development of the WCO
significance of a closer partnership between customs
Risk Management Compendium, volumes 1 and 2.
administrations and business. The SAFE Framework
provides a set of standards and principles that must An important feature of the SAFE Framework, AEOs61
be adopted as a minimum threshold by national are private parties that have been accredited by
customs administrations, originally contained within national customs administrations as compliant with
two pillars: pillar 1, Customs-to-customs network WCO or equivalent supply chain security standards.
arrangements, and pillar 2, Customsbusiness AEOs have to meet special requirements in respect
of physical security of premises, hidden camera questionnaire70 to guarantee a uniform approach

surveillance and selective staffing and recruitment throughout all European Union member States
policies. In return, AEOs are to be rewarded by are also worth noting. The European Union has
way of trade-facilitation benefits, such as faster concluded six AEO MRAs with third countries,
clearance of goods and fewer physical inspections. including major trading partners, and negotiations
In recent years, a number of mutual recognition on another MRA are ongoing.71
agreements (MRAs) of respective AEOs have been
The European Commission, on 21 August
adopted by customs administrations, usually on
2014, adopted a Communication on European
a bilateral basis.62 However, it is hoped that these
Union Strategy and Action Plan for customs risk
bilateral agreements will, in due course, form the
management: Tackling risks, strengthening supply-
basis for multilateral agreements at the subregional
chain security and facilitating trade (European
and regional levels. As of June 2015, 37 AEO
Commission, 2014a). The Strategy and Action Plan
programmes had been established in 64 countries63
annexed to the Communication proposes a set
and a further 16 countries plan to establish them
of step-by-step actions to reach more coherent,
in the near future.64 Capacity-building assistance
effective and cost-efficient European Union customs
remains a vital part of the SAFE implementation
risk management at the European Unions external
strategy. During 2014 and the first quarter of
borders (European Commission, 2014b).72
2015, AEO workshops under the WCO Columbus
Programme, or under specific financial support, As regards developments in the United States,
were organized in a number of countries.65 according to the United States Customs and Border
Protection (CBP), more than 11 million maritime
(b) Developments at the European Union containers arrive at United States seaports each
level and in the United States year. At land borders, another 11 million arrive by
truck and 2.7 million by rail.73 Programmes such as
This subsection provides an update of developments the CSI and the CustomsTrade Partnership against
in relation to existing maritime and supply chain Terrorism (CTPAT), in which representatives of
security standards at the European Union level and the trade community participate, help to increase
in the United States, both important trade partners the security of trade along supply chains.74 Within
for many developing countries. months of the 11 September 2001 attacks, CSI was
As regards the European Union, previous editions established to address the threat to border security
of the Review of Maritime Transport have provided and global trade posed by the potential for terrorist
information on the Security Amendment to the use of a maritime container to deliver a weapon. CSI
Community Customs Code,66 which aims to aims to ensure all containers that pose a potential
ensure an equivalent level of protection through risk are identified and inspected at foreign ports
customs controls for all goods brought into or out before they are placed on ships destined for the
of the European Unions customs territory.67 Part United States. Teams of CBP officers are stationed
of the changes to the Customs Code involved in foreign locations to work together with their host
the development of common rules for customs foreign government counterparts, in order to target
risk management, including setting out common and pre-screen containers through non-intrusive
criteria for pre-arrival/pre-departure security risk inspection and radiation detection technology,
analysis based on electronically submitted cargo as early in the supply chain and as rapidly as
information. From 1 January 2011, this advance possible without slowing down trade. Since the
electronic declaration of relevant security data has inception of CSI, a significant number of customs
become an obligation for traders.68 administrations have joined the programme, and
CSI is now operational at 58 ports in North America,
Among the changes to the Customs Code was
Europe, Asia, Africa, the Middle East, and Latin and
the introduction of provisions regarding AEOs. In
Central America, pre-screening over 80per cent of
this context, subsequent related developments
all maritime containerized cargo imported into the
such as the recommendation for self-assessment
United States.75
of economic operators to be submitted together
with their applications for AEO certificates,69 Starting as a partnership in November 2001 with
and the issuance of a revised self-assessment seven major importers from the United States
and neighbouring countries as members, the C (c) International Organization for

TPAT currently includes more than 10,000 certified Standardization
partners from the trade community. When joining the
CTPAT, companies sign an agreement to work with During the last decade, the International Organization
CBP to protect the supply chain, identify security for Standardization (ISO) has been actively engaged
gaps and implement specific security measures and in matters of maritime transport and supply chain
best practices. Additionally, partners provide CBP security. Shortly after the release of the International
Ship and Port Facility Security Code (ISPS Code),83
with a security profile outlining the specific security
and to facilitate its implementation by the industry,
measures the companies have in place. C-TPAT
the ISO technical committee ISO/TC 8 published
members are considered low risk and are therefore
ISO 20858:2007, Ships and marine technology
less likely to be examined. C-TPAT signed its first
Maritime port facility security assessments and
MRA in June 2007 and since then has signed similar
security plan development. Also relevant is the
arrangements with nine countries/territories and the
development of the ISO 28000 series of standards
European Union.76
Security management systems for the supply chain,
As highlighted in the Review of Maritime Transport which are designed to help the industry successfully
2009, in January 2009 new requirements, known as plan for, and recover from, any ongoing disruptive
the 10+2 rule, came into effect.77 The rule requires event (box 5.1 details the current status of the ISO
both importers and carriers to submit additional 28000 series). The core standard in this series is ISO
information pertaining to cargo to CBP before the 28000:2007, Specification for security management
cargo is brought into the United States by vessel. systems for the supply chain, which serves as an
Failure to comply with the rule could ultimately result umbrella management system that enhances all
in monetary penalties, increased inspections and aspects of security risk assessment, emergency
delay of cargo.78 preparedness, business continuity, sustainability,
Also worth mentioning are the voluntary Importer recovery, resilience and/or disaster management
Self Assessment programme, in place since June whether relating to terrorism, piracy, cargo theft,
2002, which provides the opportunity for interested fraud or many of the other security disruptions. The
importers who are participating members of C-TPAT standard also serves as a basis for AEO and CTPAT
to assume responsibility for monitoring their own certifications. Various organizations adopting such
compliance in exchange for benefits;79 the recent standards may tailor an approach compatible with
Trusted Trader programme, already in the test their existing operating systems. The standard ISO
phase, which aims to join and unify the existing 28003:2007, published and in force since 2007,
C-TPAT and Importer Self Assessment programmes provides requirements for providing audits and
to integrate and streamline the processes of supply certification to ISO 28000:2007.
chain security and trade compliance within one The recent ISO 28007-1:2015, published in April
partnership programme;80 and the Proliferation 2015, cancels and replaces ISO/PAS 28007:2012 that
Security Initiative, which aims to stop trafficking provided guidelines containing additional sector-specific
of weapons of mass destruction, their delivery recommendations, which companies or organizations
systems, and related materials to and from those that comply with ISO 28000 can implement before they
State and non-State actors which may be of concern provide privately contracted armed security personnel
regarding arms proliferation. In February 2004, the on board ships. However, changes are minimal,
Proliferation Security Initiative was expanded to consisting of matters of interpretation and guidance,
include law enforcement cooperation, and to date not requirement or specification. The role of human
more than 100 countries around the world have rights has been clarified by reference to the United
endorsed it.81 Nations Guiding Principles on Business and Human
In addition, the United States has coordinated and Rights. Greater emphasis has been put on the absolute
supported other international initiatives, including priority to ensure flag State requirements are identified
the expansion of the WCO SAFE Framework, and met. The different concepts of threat assessment
by providing targeted countries with training and risk have been clarified. The phrase interested
and advisory support through programmes on parties has been replaced by stakeholders for textual
capacity-building and export control and border consistency, and reasonable and proportionate has
security. 82 been replaced with reasonable and necessary.84
Box 5.1. The current status of the ISO 28000 series of standards
Standards published:
ISO 28000:2007 Specification for security management systems for the supply chain. This standard provides
the overall umbrella standard. It is a generic, risk-based, certifiable standard for all organizations, all disruptions
and all sectors. It is widely in use and constitutes a stepping stone to the AEO and CTPAT certifications.
ISO 28001:2007 Security management systems for the supply chain Best practices for implementing
supply chain security, assessments and plans. This standard is designed to assist the industry to meet the
requirements for AEO status.
ISO 28002:2011 Security management systems for the supply chain Development of resilience in the
supply chain Requirements with guidance for use. This standard provides additional focus on resilience, and
emphasizes the need for an ongoing, interactive process to prevent, respond to and assure continuation of an
organizations core operations after a major disruptive event.
ISO 28003:2007 Security management systems for the supply chain Requirements for bodies providing
audit and certification of supply chain security management systems. This standard provides guidance for
accreditation and certification bodies.
ISO 28004-1:2007 Security management systems for the supply chain Guidelines for the implementation
of ISO 28000 Part 1: General principles. This standard provides generic advice on the application of ISO
28000:2007. It explains the underlying principles of ISO 28000 and describes the intent, typical inputs,
processes and typical outputs for each requirement of ISO 28000. The objective is to aid the understanding and
implementation of ISO 28000. ISO 28004-1:2007 does not create additional requirements to those specified in
ISO 28000, nor does it prescribe mandatory approaches to the implementation of ISO 28000.
ISO/PAS 28004-2:2014 Security management systems for the supply chain Guidelines for the implementation
of ISO 28000 Part 2: Guidelines for adopting ISO 28000 for use in medium and small seaport operations. This
standard provides guidance to medium-sized and small ports that wish to adopt ISO 28000. It identifies supply
chain risk and threat scenarios, procedures for conducting risk/threat assessments, and evaluation criteria for
measuring conformance and effectiveness of the documented security plans in accordance with ISO 28000 and
ISO 28004 implementation guidelines.
ISO/PAS 28004-3:2014 Security management systems for the supply chain Guidelines for the
implementation of ISO 28000 Part 3: Additional specific guidance for adopting ISO 28000 for use by medium
and small businesses (other than marine ports). This standard has been developed to supplement ISO 28004-1
by providing additional guidance to small and medium-sized businesses (other than marine ports) that wish to
adopt ISO 28000. The additional guidance in ISO/PAS 28004-3:2012, while amplifying the general guidance
provided in the main body of ISO 28004-1, does not conflict with the general guidance, nor does it amend ISO
28000.
ISO/PAS 28004-4:2014 Security management systems for the supply chain Guidelines for the implementation
of ISO 28000 Part 4: Additional specific guidance on implementing ISO 28000 if compliance with ISO 28001
is a management objective. This standard provides additional guidance for organizations adopting ISO 28000
that also wish to incorporate the best practices identified in ISO 28001 as a management objective in their
international supply chains.
ISO 28005-1:2013 Security management systems for the supply chain Electronic port clearance (EPC)
Part 1: Message structures. This standard provides for computer-to-computer data transmission.
ISO 28005-2:2011 Security management systems for the supply chain Electronic port clearance (EPC)
Part 2: Core data elements. This standard contains technical specifications that facilitate efficient exchange of
electronic information between ships and shore for coastal transit or port calls, as well as definitions of core data
elements that cover all requirements for ship-to-shore and shore-to-ship reporting as defined in the ISPS Code,
the IMO Facilitation Committee Convention and relevant IMO resolutions.
ISO/PAS 28007-1:2015 Ships and marine technology Guidelines for private maritime security companies
(PMSC) providing privately contracted armed security personnel on board ships (and pro forma contract) Part
1: General. This standard provides guidelines containing additional sector-specific recommendations, which
companies (organizations) that comply with ISO 28000 can implement to demonstrate that they provide privately
contracted armed security personnel on board ships.
Box 5.1. The current status of the ISO 28000 series of standards (continued)
ISO 20858:2007 Ships and marine technology Maritime port facility security assessments and security plan
development. This standard establishes a framework to assist marine port facilities in specifying the competence
of personnel to conduct a marine port facility security assessment and to develop a security plan as required by the
ISPS Code. In addition, it establishes certain documentation requirements designed to ensure that the process used
in performing the duties described above is recorded in a manner that permits independent verification by a qualified
and authorized agency. It is not an objective of ISO 20858:2007 to set requirements for a contracting Government
or designated authority in designating a recognized security organization, or to impose the use of an outside service
provider or other third parties to perform the marine port facility security assessment or security plan if the port facility
personnel possess the expertise outlined in the specification. Ship operators may be informed that marine port facilities
that use this document meet an industry-determined level of compliance with the ISPS Code. ISO 20858:2007 does
not address the requirements of the ISPS Code relative to port infrastructure that fall outside the security perimeter of a
marine port facility that might affect the security of the facilityship interface. Governments have a duty to protect their
populations and infrastructures from marine incidents occurring outside their marine port facilities. These duties are
outside the scope of ISO 20858:2007.
Standards under development:

ISO 28006 Security management systems for the supply chain Security management of [roll-on roll-off] RO-RO
passenger ferries. This standard will include best practices for the application of security measures.
Note: For more information, including on the procedure for preparing international standards at ISO, see www.iso.org.
2. Combating maritime piracy and about the seafarers still being held hostage. It also
noted the downward trend of attacks in the Gulf of
armed robbery
Guinea, indicating that international, regional and
national efforts were beginning to take effect, and
At a basic level, maritime piracy is a maritime transport
reiterated the importance of reporting incidents by flag
issue that directly affects ships, ports, terminals,
States and industry organizations.85
cargo and seafarers. However, as piracy activities
evolve and become more sophisticated, the problem MSC noted the work of the Maritime Trade Information
becomes a multifaceted and complex transnational Sharing Centre,86 now operational on a trial basis
security challenge that threatens lives, livelihoods with over 500 ships per month reporting to it. The
and global welfare. As highlighted in some detail in a work of the Maritime Trade Information Sharing
recent two-part report on maritime piracy prepared by Centre is complementary to that of the Interregional
UNCTAD, piracy has broad repercussions, including Coordination Centre in Yaound. The latter provides
for humanitarian aid, supply chains, global production for cooperation, coordination and communication
processes, trade, energy security, fisheries, marine in the implementation87 of the Code of Conduct
resources, the environment and political stability concerning the repression of piracy, armed robbery
(UNCTAD 2014b, 2014c). The resulting adverse and against ships and illicit maritime activity in West
potentially destabilizing effects entail far-reaching and Central Africa88 at the strategic level, while the
implications for all countries, whether they are coastal Maritime Trade Information Sharing Centre handles
or landlocked, developed or developing. Addressing civilian information exchange and maritime situational
the challenge of piracy in an effective manner requires awareness aspects.89 MSC expressed its appreciation
strong cooperation at the political, economic, legal, for the contributions received for the IMO West and
diplomatic and military levels, as well as collaboration Central Africa Maritime Security Trust Fund,90 and
between diverse public and private sector stakeholders called on member States to further support the
across regions. implementation of IMO projects on maritime security
for West and Central Africa by financially contributing
At IMO, MSC at its ninety-fourth session (1721
to the Trust Fund.
November 2014) welcomed the continuing positive
developments in the suppression of piracy and armed With respect to piracy off the coast of Somalia, MSC
robbery in the waters off the coast of Somalia and the noted United Nations Security Council resolution 2184
wider western Indian Ocean, but remained concerned on the situation in Somalia, adopted on 12 November
2014, which, among others, recognized the Revised interim recommendations for flag States
contribution of IMO and renewed its call upon States regarding the use of privately contracted armed
to deploy naval vessels to the area, and underlined the security personnel on board ships in the high risk
primary responsibility of Somali authorities in the fight area, which includes amendments related to
against piracy and armed robbery off the countrys certification of private maritime security companies
coast (United Nations, 2014a). MSC also welcomed to address publication of ISO 28007 (IMO, 2015j).
the fact that the European Union Naval Force and
The Legal Committee at its 102nd session considered a
North Atlantic Treaty Organization mandates had
document by the secretariat (IMO, 2015k) reporting on
been extended to the end of 2016, and reiterated the
the outcome of discussions by members of the Kampala
importance of continuing to implement diligently the
Process93 at a meeting led by IMO, with the support of
IMO guidance and best management practices.91
EUCAP Nestor94 and the United Nations Office on Drugs
As regards the situation of piracy and armed robbery and Crime, held in Addis Ababa in September 2014. The
against ships in Asia for the period January to June Committee was also informed95 of the current status of
2014, MSC noted a document providing an update the secretariats counter-piracy initiatives.96
on the activities carried out by the Information Sharing
Centre of the Regional Cooperation Agreement on 3. Seafarers issues
Combating Piracy and Armed Robbery against Ships
in Asia, and including the action taken by some of its Shipping and related activities are expected to continue
members with respect to those found to be responsible to provide important opportunities for employment in
for fuel siphoning cases that had been widely reported developing countries, thus contributing to achieving
in the media (IMO, 2014f).92 sustainable development goals. According to ILO
estimates, over 1.5 million people around the world
MSC also noted United Nations Security Council
are employed as seafarers, the vast majority of
resolution 2182 on the situation in Somalia and
whom come from developing countries.97 Protecting
Eritrea, adopted on 24 October 2014, highlighting the
their welfare and establishing internationally agreed
need to prevent unauthorized deliveries of weapons
standards, including on their working conditions and
and military equipment to Somalia and to prevent
necessary training, is critical, not only for the seafarers
the direct or indirect export of charcoal from Somalia
themselves, but also for the ability of the global
(United Nations, 2014b). Some of its provisions,
shipping industry to operate ships safely and in an
particularly operative paragraph 10 in relation to
environmentally responsible manner.
weapons on board vessels engaged in commercial
activity in Somali ports, and operative paragraphs The most important and comprehensive international
11 to 22 referring to the maritime interdiction of instrument negotiated at ILO, the MLC 2006, which
charcoal and arms, may have an impact on the consolidates and updates more than 68 international
shipping industry. Implications may also arise from labour standards relating to seafarers, and sets out
paragraphs 15 and 16, dealing specifically with their responsibilities and rights with regard to labour
inspections by member States, acting nationally or and social matters in the maritime sector, entered
through voluntary multinational naval partnerships, of into force on 20 August 2013. It currently has 65
merchant ships that they have reasonable grounds to member States, representing over 80per cent of the
believe are carrying charcoal or weapons in violation worlds global shipping tonnage, and is considered
of the ban and/or embargo. as the fourth pillar of the global maritime regulatory
regime. Therefore, the review of the implementation of
MSC at its ninety-fifth session approved: the MLC on a regular basis, as well as consultations
regarding any necessary updates to it, are very
Recommendations to Governments for preventing
important. Worth noting are the 2014 amendments
and suppressing piracy and armed robbery
to the MLC aimed at ensuring that adequate financial
against ships, which incorporates a provision on
security is provided by flag States to cover the costs of
the establishment of a national point of contact
abandonment of seafarers as well as claims for death
for communication of information on piracy and
and long-term disability due to occupational injury and
armed robbery to IMO (IMO, 2015h);
hazards, thus providing relief to seafarers and their
Best management practices for protection against families and improving the quality of shipping overall.
Somalia-based piracy (IMO, 2015i); These amendments, which were summarized in the
Review of Maritime Transport 2014, were approved After careful consideration of these matters,
by the International Labour Conference held in June participants at the Tripartite Meeting of Experts
2014 (UNCTAD, 2014a, pages 8990). concluded that the only feasible way forward would be
for the 2016 International Labour Conference to amend
(a) International Labour Organization annex I to Convention No. 185, and as necessary
Convention No. 185 on Seafarers other annexes, to align the biometric requirements
Identity Documents (Revised) 2003 under this Convention with those of the International
Civil Aviation Organization that are universally followed
Convention No.185 specifically relates to the issuance for travel and similar documents. However, a suitable
and recognition of the seafarers identity document (SID) transition period would be allowed for countries that
which facilitates the temporary admission of seafarers are already implementing Convention No. 185.99
to foreign territory, for the purposes of their well-being
while in port, accessing onshore welfare facilities or (b) Fair treatment of seafarers in the event
taking shore leave, and for transit through a country of a maritime accident
related to the operation of ships.98 A SID can only be
The Legal Committee at its 102nd session
issued and verified by a seafarers country of nationality.
considered the outcome of a survey concerning
Although SIDs are not considered travel documents
implementation of the 2006 Guidelines on the Fair
per se (such as, for example, passports or visas), their
Treatment of Seafarers in the Event of a Maritime
issuance may be subject to the same conditions as
Accident, and a further analysis of the responses
prescribed by national laws for travel documents.
to this survey (IMO, 2015l).100 The survey indicated
Convention No. 185, adopted in June 2003 to replace the following:
the earlier Convention No. 108, included innovations
that related to the introduction of modern security Thirteen member States (29 per cent of the
features at the time, for the new SID and its biometric respondents) stated that their existing laws already
features (fingerprint template and photograph), as well adequately protect the human and other legal
as features facilitating verification of the SID (uniformity rights of seafarers contained in the guidelines and
and machine readability). Convention No. 185 also that, therefore, there was no need for the guidelines
contains minimum requirements for SID issuance to be passed into their existing laws;
processes and procedures, including quality control,
Seventeen member States (38 per cent of the
national databases and national focal points to provide
respondents) had passed the guidelines, either
information to border authorities.
in whole or in part, into their national laws, either
Although the Convention entered into force in February explicitly or implicitly;
2005, only 30 out of 185 ILO member States have
Fifteen member States (33 per cent of the
ratified it or provisionally applied it to date, and this
respondents) requested assistance in the form of
number includes few port States. Thus, those countries
information regarding the meaning of the guidelines
that have made considerable investments to properly
and/or model legislation by IMO for the purpose of
implement this Convention can count on only a few
giving effect to the guidelines.
countries to recognize the SIDs issued under it. Also,
only a few countries that have ratified the Convention The Committee concluded that (IMO, 2015g,
are in a position to actually issue SIDs conforming pages67):
to it. Implementation efforts are mainly hampered by
the fact that the fingerprint technology and biometric [T]his was an important issue for seafarers and should
consequently be placed on the work programme of
features required in annex I of Convention No. 185 the Legal Committee;
are already considered to be out of date, and are
not used by the border authorities of many of the [T]he Committee should consider guidance on the
implementation of the Guidelines, in particular for
countries concerned. Instead, since 2003, many of developing countries;
these countries have been using the International Civil
[T]echnical support and assistance should be
Aviation Organization standards for travel documents,
provided by [the Technical Cooperation Committee]
which are exclusively based on the facial image in a TCC in order to facilitate the wide implementation of
contactless chip as the biometric feature, rather than the Guidelines to improve the conditions for seafarers,
a fingerprint template in a two-dimensional barcode. taking into account human rights issues;
[W]ork needed to be done towards the progressive which includes a new pillar 3 aiming to foster closer
removal of legislation targeting seafarers and imposing cooperation between customs administrations and
criminal sanctions on them;
other government agencies involved in the international
[I]t would be useful for States already giving effect to trade supply chain. Other areas of progress included the
the Guidelines to provide translated copies of their implementation of AEO programmes and an increasing
laws to assist other States with their implementation
number of bilateral MRAs that will, in due course, form
efforts; and some States informed the Committee
that they were ready to share their national legislation the basis for the recognition of AEOs at a multilateral
giving effect to the Guidelines; level. As regards suppression of piracy and armed
[W]ith regard to the compilation of statistics, it was
robbery, positive developments were noted in the
also relevant to receive feedback from ports; waters off the coast of Somalia and the wider western
Indian Ocean. However, concern remained about the
States were urged to provide their embassies with the
names of persons whom seafarers could contact to seafarers still being held hostage. A downward trend
report violations of the Guidelines; of attacks in the Gulf of Guinea was also observed,
indicating that international, regional and national efforts
[S]eafarers should be given greater training and
awareness of their rights. were beginning to take effect. Progress was also made
at ILO and IMO regarding issues related to seafarers
The Committee also noted with gratitude that the fair treatment in the event of a maritime accident as well
industry was prepared to contribute financially towards as to the issuance and recognition of SIDs.
this work.
Key developments in summary D. STATUS OF CONVENTIONS

During the year under review, continued enhancements A number of international conventions in the field
were made to regulatory measures in the field of maritime of maritime transport were prepared or adopted
and supply chain security and their implementation. under the auspices of UNCTAD. Table 5.1 provides
Developments included the issuance of a new information on the status of ratification of each of
version of the WCO SAFE Framework in June 2015, these conventions as at 30 June 2015.
Table 5.1. Contracting States Parties to selected international conventions on maritime transport as
at 30 June 2015
Date of entry into

Title of convention force or conditions Contracting States
for entry into force
United Nations Convention on Entered into force 6 October Algeria, Bangladesh, Barbados, Belgium, Benin, Burkina Faso, Burundi, Cameroon,
a Code of Conduct for Liner 1983 Cabo Verde, Central African Republic, Chile, China, Congo, Costa Rica, Cte dIvoire,
Conferences, 1974 Cuba, Czech Republic, Democratic Republic of the Congo, Egypt, Ethiopia, Finland,
France, Gabon, Gambia, Ghana, Guatemala, Guinea, Guyana, Honduras, India,
Indonesia, Iraq, Italy, Jamaica, Jordan, Kenya, Kuwait, Lebanon, Liberia, Madagascar,
Malaysia, Mali, Mauritania, Mauritius, Mexico, Montenegro, Morocco, Mozambique,
Niger, Nigeria, Norway, Pakistan, Peru, Philippines, Portugal, Qatar, Republic of Korea,
Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Sierra Leone, Slovakia,
Somalia, Spain, Sri Lanka, Sudan, Sweden, Togo, Trinidad and Tobago, Tunisia, United
Republic of Tanzania, Uruguay, Venezuela (Bolivarian Republic of), Zambia
(76)
United Nations Convention on Entered into force 1 Albania, Austria, Barbados, Botswana, Burkina Faso, Burundi, Cameroon, Chile,
the Carriage of Goods by Sea, November 1992 Czech Republic, Dominican Republic, Egypt, Gambia, Georgia, Guinea, Hungary,
1978 (Hamburg Rules) Jordan, Kazakhstan, Kenya, Lebanon, Lesotho, Liberia, Malawi, Morocco, Nigeria,
Paraguay, Romania, Saint Vincent and the Grenadines, Senegal, Sierra Leone,
Syrian Arab Republic, Tunisia, Uganda, United Republic of Tanzania, Zambia
(34)
International Convention Entered into force 5 Albania, Benin, Congo, Ecuador, Estonia, Lithuania, Monaco, Nigeria, Peru, Russian
on Maritime Liens and September 2004 Federation, Spain, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Serbia,
Mortgages, 1993 Syrian Arab Republic, Tunisia, Ukraine, Vanuatu
(18)
United Nations Convention Not yet in force requires Burundi, Chile, Georgia, Lebanon, Liberia, Malawi, Mexico, Morocco, Rwanda,
on International Multimodal 30 contracting Parties Senegal, Zambia
Transport of Goods, 1980 (11)
United Nations Convention on Not yet in force requires Albania, Bulgaria, Cte dIvoire, Egypt, Georgia, Ghana, Haiti, Hungary, Iraq, Liberia,
Conditions for Registration of 40 contracting Parties with Libya, Mexico, Morocco, Oman, Syrian Arab Republic
Ships, 1986 at least 25per cent of the (15)
worlds tonnage as per
annex III to the Convention
International Convention on Entered into force Albania, Algeria, Benin, Bulgaria, Congo, Ecuador, Estonia, Latvia, Liberia, Spain,
Arrest of Ships, 1999 14September 2011 Syrian Arab Republic
(11)
Note: For official status information, see http://treaties.un.org (accessed 24 September 2015).
E. TRADE FACILITATION AND Trade facilitation reforms and development mutually

benefit each other in various ways (see Kituyi, 2013,
SUSTAINABLE DEVELOPMENT 2014). The most frequently mentioned linkage is
the positive impact that trade facilitation has on
International shipping is also affected by the
the competitiveness of developing countries and
facilitation of maritime trade, that is, the import and
their participation in global trade and value chains
export procedures and documentation requirements
(WTO, 2015a). Apart from this well-known impact
in seaports. Trade facilitation aims at simplifying
that trade facilitation reforms have on trade, there
administrative procedures and making them
exist important additional linkages with a countrys
transparent and less time consuming and cumbersome
development.
for users involved in foreign trade operations. This will
benefit concerned public sector agencies and traders, The entry into force and implementation of the TFA
while improving transparency and governance. In contributes towards a universal, rules-based, open,
this context, trade facilitation reforms are increasingly non-discriminatory and equitable multilateral trading
incorporated into broader policy areas that are relevant system under the WTO (SDG target 17.10). The
for achieving the SDGs. Beyond their relevance for technical assistance and capacity-building to be provided
trade competitiveness, most specific trade facilitation under section II of the TFA can help to increase Aid
reforms also have a direct impact on a number of for Trade support for developing countries, particularly
sustainable development targets. LDCs, including through the Enhanced Integrated
Table 5.2. Examples of articles of the TFA that may benefit from and help to achieve SDGs
Articles of the WTO TFA Selected extracts from SDGs

Article 1: Publication and availability of public access to information (16.10)
information
Article 2: Opportunity to comment, information responsive, inclusive, participatory and representative decision-making at all
before entry into force and consultations levels (16.7)
Article 3: Advance rulings develop effective, accountable and transparent institutions at all levels (16.6)
Article 4: Procedures for appeal or review rule of law at the national and international levels, and ensure equal access to
justice for all (16.3)
Article 5: Other measures to enhance access to information and communications technology and strive to provide
impartiality, non-discrimination and universal and affordable access to Internet in LDCs (9.c)
transparency
Article 6: Disciplines on fees and charges reduce corruption and bribery (16.5)
imposed on or in connection with importation
and exportation and penalties
Article 7: Release and clearance of goods enhance the use of enabling technologies in particular information and
communications technology (17.8)
Article 8: Border agency cooperation higher levels of economic productivity through diversification, technological
upgrading and innovation (8.2)
Article 9: Movement of goods intended for capacity of domestic financial institutions (8.10)
import under customs control
Article 10: Formalities connected with higher levels of economic productivity through diversification, technological
importation, exportation and transit upgrading and innovation (8.2)
Article 11: Freedom of transit regional and trans-border infrastructure (9.1)
Article 12: Customs cooperation strengthen relevant national institutions, including through international
cooperation, for building capacities at all levels, in particular in developing
countries, for preventing violence and combating terrorism and crime (16.a)
Article 23.2: National Committee on Trade effective public, publicprivate and civil society partnerships (17.17)
Facilitation
Source: Open Working Group proposal for sustainable development goals, available at https://sustainabledevelopment.un.org/
focussdgs.html (accessed 25 June 2015).
Framework (SDG target 8.a) and can enhance target 9.c. Article 6 of the TFA includes the requirement
international support for implementing effective and to avoid conflicts of interest in the assessment and
targeted capacity-building in developing countries to collection of penalties and duties, which can help to
support national plans to implement all sustainable reduce corruption and bribery covered by SDG target
development goals, including through NorthSouth, 16.5. A further example of possible linkages between
SouthSouth and triangular cooperation (SDG the TFA and the SDGs is TFA article 11 on freedom of
target17.9). transit, which complements regional and trans-border
Many of the specific trade facilitation measures that infrastructure covered by SDG target9.1.
are included in the TFA also have a direct linkage to
different aspects of development. Table 5.2 provides For the effective implementation of the TFA, WTO
a list of articles included in the TFA and links them to members are required to establish and/or maintain a
selected SDGs and targets. national committee on trade facilitation or designate
an existing mechanism to facilitate both domestic
Article 1 of the TFA, for example, covers the publication
and availability of information on import, export and coordination and implementation of the provisions of
transit procedures; a country that complies with article 1 [the TFA]. Such a mechanism is crucial for ensuring
of the TFA will thus be closer to achieving the SDG target the political buy-in of the relevant stakeholders from the
16.10, which, inter alia, aims at ensuring public access public and private sectors, including users and providers
to information. Another example is article 5 of the of trade-supporting services (UNCTAD, 2014d). It also
TFA, which, inter alia, requires Governments to publish responds to the SDG target 17.17 to encourage and
certain announcements in a non-discriminatory and promote effective public, publicprivate and civil society
easily accessible manner; this is more easily achieved if partnerships, building on the experience and resourcing
traders have access to Internet, as stipulated in SDG strategies of partnerships.
Figure 5.1. The Human Development Index (HDI) and the number of trade facilitation measures notified
as category A
Number of trade facilitation measures notied as category A

35
30
25
y = 59.126x-19.785
R = 0.3748
20
15
10
5
Human Development Index
0
0.4 0.5 0.6 0.7 0.8 0.9
Source: UNCTAD secretariat, based on individual notifications published on the WTO website http://www.wto.org/english/tratop_e/
tradfa_e/tradfa_e.htm#notifications (accessed 24 September 2015). The HDI is sourced from UNDP, available at http://hdr.
undp.org/en/content/human-development-index-hdi (accessed 24 September 2015).
In addition to the specific SDGs mentioned in table An analysis of the number of category A measures
5.2, there are several cross-cutting SDGs that notified per country suggests that a close correlation
benefit from and help to implement trade facilitation exists between different indicators for development
reforms. [E]qual access for all women and men to and the implementation of trade facilitation reforms.
affordable quality technical, vocational and tertiary While a statistical correlation does not in itself say
education, including university (4.3), for example, will anything about causalities, the data suggest that the
help strengthen the capacities of traders and service possible linkages listed in table 5.2 are supported by
providers to make use of the latest technologies and empirical evidence.101 For example, the coefficient of
methods utilized by customs administrations and other determination R2 between the HDI and the number
border agencies. In general, many trade facilitation of measures notified as category A is around 0.37,
measures help the informal sector to better participate suggesting that about 37per cent of the variation in
in formal foreign trade, thus supporting SDG target the number of category A notifications per country is
8.3 on the formalization and growth of micro-, small- statistically explained by the countrys HDI (figure 5.1).
and medium-sized enterprises.
Interestingly, the implementation of trade facilitation
Since early 2014, WTO members have started to measures as reflected in the category A notifications is
notify their category A trade facilitation measures statistically less correlated with a countrys trade than
to the WTO. Category A contains provisions that a with its level of development, as measured by the GDP
developing country Member or a least-developed per capita or the HDI. Put differently, the data from the
country Member designates for implementation upon category A notifications suggest that the likelihood that
entry into force of this Agreement, or in the case of a a developing country will implement trade facilitation
least-developed country Member within one year after reforms has more to do with its capacity and human and
entry into force (WTO, 2014). By 30 July 2015, a total institutional development than with its level of foreign
of 67 developing countries had notified their category trade. Capacity development will thus continue to be
A provisions to the WTO secretariat (WTO, 2015b). key for the advancement of the TFA on the ground.
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ENDNOTES
1
A new chapter XIV, Safety measures for ships operating in polar waters.
2
According to the tacit acceptance procedure, amendments enter into force by default unless objections
are filed by a certain number of States.
3
Relevant in this context is a recent resolution by the United Nations General Assembly (A/69/L.65)
deciding to develop an internationally legally binding instrument under UNCLOS on the conservation and
sustainable use of marine biological diversity of areas beyond national jurisdiction.
4
See the Antarctic and Southern Ocean Coalition (a coalition of over 30 non-governmental organizations
interested in Antarctic environmental protection and conservation) press release, available at http://
www.asoc.org/explore/latest-news/1364-press-release-polar-code-too-weak-to-properly-protect-polar-
environments-from-increased-shipping-activity (accessed 9 September 2015).
5
See the IMO press release available at http://www.imo.org/en/MediaCentre/PressBriefings/Pages/38-
nmsc94polar.aspx#.VZEmLGw1-Hs (accessed 9 September 2015); further documentation on the Polar
Code, as well as presentations from a related workshop, can be found on the IMO website, available at
http://www.imo.org/en/MediaCentre/HotTopics/polar/Pages/default.aspx (accessed 9 September 2015).
6
For an overview, see UNCTAD (2009), pages 1618; see also Economic Commission for Europe (2013),
pages15 and 4143.
7
See the IMO press release, available at http://www.imo.org/MediaCentre/HotTopics/polar/Pages/default.
8
See the interview with the Secretary-General of IMO, published on 25 February 2015, available at http://
www.arctic-council.org/index.php/en/resources/news-and-press/news-archive/992-interview-with-
secretary-general-of-the-international-maritime-organization-imo (accessed 9 September 2015).
9
For further information, including on the status of ratification, see the website of the United Nations Division
on Ocean Affairs and the Law of the Sea, available at http://www.un.org/depts/los/index.htm (accessed
9September 2015).
10
SOLAS entered into force on 25 May 1980 and, as of 30 June 2015, had 162 States Parties representing
98.6per cent of world tonnage.
11
Other conventions dealing with shipping safety include: the Convention on the International Regulations
for Preventing Collisions at Sea, 1972; the International Convention on Load Lines, 1966 (Load Lines
Convention); the International Convention on Safe Containers, 1972; the International Convention on
Standards of Training, Certification and Watchkeeping of Seafarers, 1978 (STCW); and the International
Convention on Maritime Search and Rescue, 1979. Non-mandatory codes and guidelines include: the
International Maritime Dangerous Goods Code, 2006 (SOLAS, chapter VII); the International Code for the
Construction and Equipment of Ships Carrying Liquefied Gases in Bulk Code (International Gas Carrier
Code 1993) (SOLAS chapter VII); and the 2008 Intact Stability Code.
12
MARPOL entered into force on 2 October 1983 and, as of 30 June 2015, had 153 States Parties
representing 98.52 per cent of world tonnage. While all contracting States to MARPOL are bound by
annexes I (prevention and control of pollution by oil) and II (noxious liquid substances), not all contracting
States have ratified or acceded to the other annexes. For further information, see the IMO website.
13
Other instruments dealing with ship-source pollution, whose provisions are also applicable in the polar
regions, include the 2004 International Convention for the Control and Management of Ships Ballast
Water and Sediments (Ballast Water Convention); the Nairobi International Convention on the Removal of
Wrecks, 2007 (Wreck Removal, 2007); the Convention on the Prevention of Marine Pollution by Dumping
of Wastes and Other Matter (London Convention, 1972) and its 1996 Protocol; the 1990 International
Convention on Oil Pollution Preparedness, Response and Cooperation, and its Protocol on Hazardous
and Noxious Substances (OPRC/HNS Protocol, 2000).
14
Nairobi International Convention on the Removal of Wrecks, 2007; see UNCTAD, 2014a, pages 7879.
15
The MLC entered into force on 20 August 2013 and, as of 30 June 2015, had 66 States Parties. For an
overview, see UNCTAD (2013), page 104.
16
MARPOL Special Areas are certain waters that require, for technical reasons relating to their oceanographical
and ecological condition and to their sea traffic, the adoption of special mandatory methods for the
prevention of sea pollution.
17
MARPOL annex I, regulation 15.
18
MARPOL annex II, regulation 13.
19
MARPOL annex V, regulation 5.
20
MARPOL annex I, regulation 43.
21
The Antarctic Treaty System regulates relations among States in the Antarctic. The main instrument is
the Antarctic Treaty, which was signed on 1 December 1959 and entered into force on 23 June 1961.
The original Parties to the Treaty were the 12 nations active in the Antarctic during the International
Geophysical Year of 19571958. As of 30 June 2015, the present total number of Parties is 52. The
Treaty is supplemented by recommendations adopted at consultative meetings, by the Protocol on
Environmental Protection to the Antarctic Treaty (Madrid, 1991) and by two separate conventions dealing
with wildlife resources, the Convention for the Conservation of Antarctic Seals (London, 1972) and the
Convention for the Conservation of Antarctic Marine Living Resources (Canberra, 1980). The Convention
on the Regulation of Antarctic Mineral Resource Activities (Wellington, 1988), negotiated between 1982
and 1988, will not enter into force.
22
See the Protocol on Environmental Protection to the Antarctic Treaty (1991), which entered into force on
14 January 1998, annex IV, articles 5 and 6.
23
The Arctic is a shallow sea sometimes covered by multi-year ice or single-year ice and surrounded by
land masses. The Antarctic is an ice-covered continent which is surrounded by a deep ocean. The Arctic
has been home to native peoples, who have made their living from the environment, for thousands of
years. The Antarctic has no permanent population of people. The Arctic is currently less protected by
international law than the Antarctic. For more information, see Det Norske Veritas (2011).
24
For a background on the importance of this issue, see http://globallast.imo.org/ (accessed 9 September
2015).
25
Held 1317 October 2014 and 1115 May 2015, respectively.
26
For further details, see the Review of Maritime Transport 2013. It should be noted that the issue of possible
market-based measures was not discussed at the sixty-sixth, sixty-seventh and sixty-eighth sessions of
MEPC.
27
For a summary of the content of the regulations, see UNCTAD (2012b), pages 9798; for an overview of
the discussions on the different types of measures, see UNCTAD (2011a), pages 114116.
28
A copy of the study and further information on the methodology are available at http://www.imo.org/
en/OurWork/Environment/PollutionPrevention/AirPollution/Pages/Greenhouse-Gas-Studies-2014.aspx
29
MEPC 68/5/1 (Marshall Islands).
30
These include identification of the primary fuel for the calculation of the attained EEDI for ships fitted with
dual-fuel engines using LNG and liquid fuel oil.
31
These make the guidelines applicable to phase 1 (starting 1January 2015) of the EEDI requirements.
32
These make the guidelines applicable to level-1 minimum power lines assessment for bulk carriers and
tankers, and agreed on a phase-in period of six months for the application of the amendments.
33
As required by regulation 21.6 of MARPOL annex VI, at the beginning of phase 1 and at the midpoint
of phase 2, the Organization shall review the status of technological developments and, if shown to be
necessary, amend the time periods, the EEDI reference line parameters for relevant ship types and the
reduction rate; see IMO (2015a), page28.
34
The intersessional Correspondence Group on Further Technical and Operational Measures for Enhancing
Energy Efficiency, established at the sixty-seventh session of MEPC. The report is available as document
MEPC 67/WP.13. For further information on the deliberations and documentation, see IMO (2015a)
page34.
35
MARPOL annex VI came into force on 19 May 2005 and, as of 30 June 2015, has 82 States Parties
representing 95.23per cent of world tonnage. Annex VI covers air pollution from ships, including NOx and
SOx emissions and PM.
36
See http://onlinelibrary.wiley.com/doi/10.1002/jgrd.50171/pdf (accessed 24 September 2015).
37
For various opinions on the impact of emissions of black carbon on the Arctic and on global climate
change, see: documents MEPC 68/3/5 and MEPC 68/3/5/Corr.1 (the Russian Federation), presenting
data on black carbon emissions from shipping in ice conditions of the Arctic seas adjacent to the Russian
Federation territory; the assessment by these documents of black carbon emissions from ships operating
in the Arctic in ice conditions is that their impact is only regional and cannot pose a threat to climate change,
and that black carbon emissions from ships can influence ice and snow properties only in cases where the
emissions occur less than 100 kilometres from the ice edge; MEPC 68/3/19 (CSC), providing comments
on document MEPC 68/3/5, pointing out that it does not follow any scientific standard for citations and
assessment of differences to previous studies; and MEPC 68/3/22 (Norway), providing comments on
document MEPC 68/3/5, requesting MEPC to continue its work on black carbon in accordance with the
work plan agreed at MEPC 62.
38
For further discussion, see IMO (2014b), pages 3539.
39
The first two SOx ECAs, the Baltic Sea and the North Sea areas, were established in Europe and took
effect in 2006 and 2007, respectively. The third established was the North American ECA, taking effect on
1 August 2012. In July 2011, a fourth ECA, the United States Caribbean Sea, was established. This latter
area covers certain waters adjacent to the coasts of Puerto Rico (United States) and the United States
Virgin Islands, and took effect on 1 January 2014.
40
Required under of MARPOL annex VI, regulation 14 Sulphur oxides (SOx) and particulate matter.
41
Consisting of 13 member States, one intergovernmental organization and six international non-
governmental organizations.
42
For more information, see IMO (2015a), page 25.
43
Intended as a tool to assist in managing requests for spill response resources and offers for assistance
from other countries and organizations when confronted with significant oil spill incidents.
44
Parts I (Basic information) and II (National policy) of the IMO Dispersant Guidelines have already been
approved and will be published together with Part III. Part IV, covering subsea dispersant application, is
under development and will take into account the experience gained from the Deepwater Horizon incident
as well as other related technical developments.
45
See http://globallast.imo.org/ (accessed 9September 2015).
46
Four proposed by the Republic of Korea and two by Singapore.
47
Two proposed by Japan and two by the Republic of Korea.
48
During 2014 and 2015, five States, Georgia, Japan, Jordan, Tonga and Turkey, acceded to the Convention.
49
For reasons related to the language and substance of this non-binding resolution, the delegation of the
United States reserved its position with regard to it.
50
Initiated during the sixty-seventh session of MEPC and being conducted by the IMO secretariat in
partnership with the World Maritime University.
51
With the collaboration of IMO and the International Oil Pollution Compensation Funds and International
Tanker Owners Pollution Federation secretariats. Its purpose would be to promote the Convention by
focusing on its fundamental public policy intent and objectives, rather than serving as a guide on how to
implement the Convention.
52
For more information, see IMO (2015g), page4.
53
Also highlighted in the Review of Maritime Transport 2013, pages 110111; for further information on the
international liability and compensation framework for ship-source oil pollution see also UNCTAD (2012a).
54
The 1992 Civil Liability Convention and 1992 International Oil Pollution Compensation Fund Convention;
for an analytical overview of the legal framework, see UNCTAD (2012a).
55
See, for instance, Shell Arctic oil drilling to commence within weeks, 3 July 2015, available at http://
www.bbc.com/news/business-33379982 (accessed 9September 2015).
56
For more information, see On Scene Coordinator Report Deepwater Horizon Oil Spill, submitted in
September 2011, available at http://www.uscg.mil/foia/docs/dwh/fosc_dwh_report.pdf (accessed
24September 2015).
57
See Lloyds List, Is BP now an attractive takeover target? 2 July 2015.
58
Pillar I is mainly based on the model of the Container Security Initiative (CSI), introduced in the United
States in 2002, and Pillar II is mainly based on the model of the CTPAT, introduced in the United States
in 2001. For more information on these, as well as for an analysis of the main features of customs supply
chain security, namely advance cargo information, risk management, cargo scanning and authorized
economic operators (AEOs), see WCO (2011). For a summary of the various United States security
programmes adopted after September 11, see UNCTAD (2004).
59
As of June 2015, 168 out of 180 WCO member States have signed the letter of intent to implement the
SAFE Framework.
60
A June 2012 version of the SAFE Framework can be found in WCO (2012). Also, the SAFE Package,
bringing together all WCO instruments and guidelines that support its implementation, is available at
http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/tools/safe_package.aspx (accessed
24September 2015).
61
The SAFE Framework AEO concept has its origin in the International Convention on the Simplification
and Harmonization of Customs Procedures, as amended (revised Kyoto Convention), which contains
standards on authorized persons and national programmes.
62
The first MRA was concluded between New Zealand and the United States in June 2007. As of June
2015, 32 bilateral MRAs had been concluded. A further 19 are being negotiated between: Brazil and the
Republic of Korea; Canada and the European Union; Canada and Israel; Canada and Mexico; China and
Israel; China and Japan; China and the United States; Costa Rica and Mexico; Costa Rica and the United
States; the European Union and Hong Kong, China; Hong Kong, China and Japan; Hong Kong, China
and Malaysia; Hong Kong, China and Thailand; India and the Republic of Korea; Israel and the Republic of
Korea; Japan and Switzerland; New Zealand and Singapore; Norway and Switzerland; and the Republic
of Korea and Thailand.
63
Due to the fact that 28 European Union countries have one common uniform AEO programme.
64
This is according to information provided by the WCO secretariat. For more information, see WCO (2015b).
65
These were Armenia, Azerbaijan, Colombia, Egypt, Georgia, India, Malaysia, Mongolia, Saudi Arabia,
Serbia and Sudan. Furthermore, an AEO global conference was organized in Madrid in April 2014 and in
spring 2016, a new global conference is planned for Mexico.
66
Regulation (EC) 648/2005 and its implementing provisions.
67
See, in particular, UNCTAD (2011a), which provides an overview of the major changes this amendment
introduced to the Customs Code at pages 122123.
68
For more information, see http://ec.europa.eu/ecip/security_amendment/index_en.htm (accessed
25September 2015).
69
According to information provided by the European Commissions Taxation and Customs Union Directorate
General, as of 11 June 2015, 17,782 applications for AEO certificates had been submitted and 15,476
certificates issued. The number of applications rejected up to 11 June 2015 was 1,881 (11per cent of the
applications received) and the number of certificates revoked was 1,383 (9per cent of certificates issued).
The breakdown reported per certificate type issued was: AEO-F 7,742 (50per cent); AEO-C 7,152 (46per
cent); and AEO-S 582 (4per cent).
70
For the self-assessment questionnaire, see http://ec.europa.eu/taxation_customs/resources/documents/
customs/policy_issues/customs_security/aeo_self_assessment_en.pdf (accessed 25 September 2015).
Explanatory notes are also available at http://ec.europa.eu/taxation_customs/resources/documents/customs/
policy_issues/customs_security/aeo_self_assessment_explanatory_en.pdf (accessed 25September 2015).
71
The European Union has already concluded MRAs with Andorra, China, Japan, Norway, Switzerland and
the United States. Negotiations are ongoing with Canada. For further information on AEOs, see http://
ec.europa.eu/taxation_customs/customs/policy_issues/customs_security/aeo/index_en.htm (accessed
25September 2015).
72
See the European Commission press release of 21 August 2014 Customs: Commission adopts strategy
and action plan for better customs risk management, available at http://europa.eu/rapid/press-release_
IP-14-936_en.htm (accessed 25September 2015).
73
See http://www.cbp.gov/border-security/ports-entry/cargo-security (accessed 25September 2015).
74
For more information on the various security initiatives, see UNCTAD (2004).
75
For more information about CSI, see http://www.cbp.gov/border-security/ports-entry/cargo-security/csi/
csi-brief (accessed 25 September 2015). The implementation of legislative requirements to scan 100per
cent of all United States-bound containers was again deferred in 2014 for another two years. See also
UNCTAD (2014a), pages8687.
76
The nine countries/territories are Canada, Israel, Japan, Jordan, Mexico, New Zealand, the Republic of
Korea, Singapore and Taiwan Province of China.
77
Importer Security Filing and Additional Carrier Requirements.
78
For more information on the 10+2 rule, see http://www.cbp.gov/border-security/ports-entry/cargo-
security/importer-security-filing-102 (accessed 25September 2015).
79
For more information, see http://www.cbp.gov/trade/isa/importer-self-assessment (accessed 9 Sep-
tember 2015). For information on the benefits for the participants, see http://www.gpo.gov/fdsys/pkg/
FR-2002-06-17/pdf/02-15308.pdf (accessed 25September 2015).
80
For more information, see http://www.gpo.gov/fdsys/pkg/FR-2014-06-16/pdf/2014-13992.pdf (accessed
25September 2015).
81
For more information, see http://www.state.gov/t/isn/c10390.htm (accessed 25 September 2015).
82
For more information, see http://www.cbp.gov/border-security/international-initiatives/international-
agreements/cmaa (accessed 25September 2015).
83
On 1 July 2004, the 2002 amendments to SOLAS and the new ISPS Code entered into force and became
mandatory for all SOLAS member States. For more information, see UNCTAD (2004 and 2007).
84
See also Lloyds List, 2015, Minimal changes made to ISO 28007 standards for maritime security, March,
available at http://www.lloydslist.com/ll/sector/ship-operations/article459421.ece (accessed 9 September
2015).
85
For more information, see IMO (2014g). See also http://www.imo.org/OurWork/Security/WestAfrica/
Pages/WestAfrica.aspx (accessed 25 September 2015). Reports of actual and attempted attacks by
pirates and armed robbers are promulgated via the Global Integrated Shipping Information System,
available at http://gisis.imo.org (accessed 9 September 2015).
86
Currently located in the Regional Maritime University in Accra.
87
By the Economic Community of Central African States, the Gulf of Guinea Commission and member
States in the region.
88
Available at http://www.imo.org/OurWork/Security/WestAfrica/Documents/code_of_conduct%20signed%
20from%20ECOWAS%20site.pdf (accessed 25 September 2015).
89
For further information, see the Maritime Trade Information Sharing Centre website, www.mtisc-gog.org
(accessed 9 September 2015). The newly updated Guidelines for Owners, Operators and Masters for
Protection against Piracy in the Gulf of Guinea Region, developed jointly by the Baltic and International
Maritime Council, the International Chamber of Shipping, INTERTANKO and INTERCARGO is also
available via the IMO website as well as on the websites of those organizations.
90
From China, Japan, Nigeria, Norway, the United Kingdom and most recently Angola.
91
For IMO guidance on piracy and best management practices, see http://www.imo.org/OurWork/Security/
PiracyArmedRobbery/Pages/Default.aspx (accessed 25 September 2015).
92
The full text of the statement is set out in IMO (2014h), annex 29.
93
The group, known as the Kampala Process, comprises members of the Somali Contact Group on
Counter-piracy and was established in 2010 with the objective of promoting coordination and information-
sharing between counter-piracy offices of the Government of Somalia, Galmudug, Puntland and
Somaliland.
94
EUCAP Nestor is a European Union civilian mission, with some military expertise, under the Common
Security and Defence Policy. EUCAP Nestor is an unarmed capacity-building mission with no executive
powers, which aims to support the development of maritime security systems in the Horn of Africa and the
western Indian Ocean States, thus enabling them to fight piracy and other maritime crime more effectively.
For more information, see https://www.eucap-nestor.eu (accessed 9September 2015).
95
By the Special Adviser to the IMO Secretary-General on Maritime Security and Facilitation.
96
For more information, see IMO (2015k), page 7.
97
See, for example, ILO press release of 4 April 2014, ILO, Maritime sector to address abandonment
of seafarers and shipowners liability, available at http://www.ilo.org/global/about-the-ilo/media-centre/
press-releases/WCMS_240418/lang--en/index.htm (accessed 29 September 2015).
98
Issues related to ILO Convention No. 185 on Seafarers Identity Documents (Revised) 2003 were discussed
during a Tripartite Meeting of Experts held on 46February 2015.
99
For more information, see http://www.ilo.org/global/standards/maritime-labour-convention/events/
WCMS_301223/lang--en/index.htm (accessed 25September 2015).
100
Conducted by Seafarers Rights International.
101
The coefficient of determination, R2, between the HDI and the number of measures notified as category A
is 0.3748, suggesting that about 37.48per cent of the variation in the number of category A notifications
per country is statistically explained by the countrys HDI. Similar R2s are obtained for the correlation
between the category A notifications and the GDP per capita (R2 = 0.36) and the share of individuals with
access to Internet (R2 = 0.35). The number of trade facilitation measures notified as category A have been
calculated by UNCTAD on the basis of the individual notifications published on the WTO website, available
at http://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm#notifications (accessed 25 September
2015). In several cases a WTO member notified specific measures as partially under category A; in these
cases UNCTAD counted the case as 0.5. GDP per capita has been estimated by UNCTAD. Data are for
2013. The HDI is sourced from UNDP, available at http://hdr.undp.org/en/content/human-development-
index-hdi (accessed 25 September 2015). Data are for 2013. The percentage of individuals using Internet
is sourced from the International Telecommunication Union, available at http://www.itu.int/en/ITU-D/
Statistics/Pages/stat/default.aspx (accessed 25 September 2015). Data are for 2013.
U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T
UNCTAD
REVIEW
REVIEW OF MARITIME TRANSPORT 2015

For further information on UNCTADs work
on trade logistics,
please visit: http://unctad.org/ttl
OF MARITIME
TRANSPORT
and for the Review of Maritime Transport 2015:
http://unctad.org/rmt
E-mail:
2015
[email protected]
To read more and to subscribe to the
UNCTAD Transport Newsletter, please visit:
http://unctad.org/transportnews
Photo credit : Jan Hoffmann
UNITED NATIONS
ISBN 978-92-1-112892-5
Layout and printed at United Nations, Geneva

1522632 (E)October 20152,054
UNCTAD/RMT/2015
United Nations publication

Sales No. E.14.II.D.6

Review of Marine Time Transport 2015

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U n i t e d N at i o n s C o n f e r e n c e o n T r a d e A n d D e v e l o p m e n t

New York and Geneva, 2015

UNITED NATIONS PUBLICATION

Sales no. E. 15.II.D.6

1. DEVELOPMENTS IN INTERNATIONAL SEABORNE TRADE............................................. 1

2. STRUCTURE, OWNERSHIP AND REGISTRATION OF THE WORLD FLEET......................... 29

3. FREIGHT RATES AND MARITIME TRANSPORT COSTS.................................................. 47

5. LEGAL ISSUES AND REGULATORY DEVELOPMENTS..................................................... 79

LIST OF TABLES, FIGURES AND BOXES

1.1. World economic growth, 20122015 (annual percentage change)................................................................... 2

1.1. Examples of voluntary self-regulation in shipping ............................................................................................ 22

SAFE Framework of Standards to Secure and Facilitate Global Trade

Vessel groupings used in the Review of Maritime Transport

Group Constituent ship types

Oil tankers Oil tankers

Bulk carriers Bulk carriers, combination carriers

Container ships Fully cellular container ships

Other ships Liquefied petroleum gas carriers, liquefied natural gas

Total all ships Includes all the above-mentioned vessel types

Approximate vessel size groups referred to in the Review of Maritime Transport,

Crude oil tankers

Dry bulk and ore carriers

Source: Clarksons Research.

The year 2015 is a milestone for sustainable The fleet

Freight costs to international terminal operators. The worlds

In 2014, important regulatory developments in the field

Table 1.1. World economic growth, 20122015 (annual percentage change)

Source: UNCTAD. Trade and Development Report 2015. Table 1.1.

Source: UNCTAD secretariat, based on UNCTADstat.

Consequently, it may be argued that long-term trade B. WORLD SEABORNE TRADE

Figure 1.3. Structure of international seaborne trade, 2014

Petroleum products Crude oil

Goods loaded Goods unloaded

Country group Year Petroleum Petroleum

Goods loaded Goods unloaded

Country group Year Petroleum Petroleum

Goods loaded Goods unloaded

Goods loaded Goods unloaded

0 Developed economies Developing economies Transition economies

Source: UNCTAD Review of Maritime Transport, various issues.

Asia Americas Europe Oceania Africa

Source: UNCTAD secretariat, based on data from Clarksons Research (2015b).

Refined petroleum products (British Petroleum, 2015). Rising import demand

Coal shipments have increased by 11.1per cent in 2014 and totalled

Transpacific Europe Asia Transatlantic

AsiaNorth North America EuropeNorth North America

Box 1.1. Examples of voluntary self-regulation in shipping

increasingly expecting transportation service total annual transport infrastructure investments

The strategic importance of maritime transport

and trade competitiveness. Greater sustainability in infrastructure maintenance and management;

International Transport Journal (2015). Charterers to exclude inefficient vessels. 29 May.

Source: UNCTAD, Review of Maritime Transport, various issues.

Principal types 2014 2015 Percentage change 2015/2014

Figure 2.3. Contract year for tonnage (dwt) delivered in 2014

Source: UNCTAD secretariat, based on data supplied by Clarksons Research.

Country grouping 04 59 1014 1519 20 + Average age Average age Change

Source: UNCTAD secretariat, based on data supplied by Clarksons Research.

Source: UNCTAD secretariat, based on data supplied by Clarksons Research.

Table 2.3. Ownership of the world fleet, as of 1 January 2015 (dwt)

Number of vessels Dead-weight tonnage