Free trade trumps the perfect storm

There was a time when most shipping conferences included at least one presenter with a set of data pointing to a sustained increase in demand for commodities, goods and services well into the middle of this century and beyond.

From nearly a couple of decades in, the confidence in those assumptions looks shaky. Alongside potential disruption from technological advances, the rise of economic nationalism and changes in economic development mean that shipping can no longer rely on its position as globalisation’s silent servant.

Whereas before the financial crisis, a 1% rise in GDP growth meant a 2-3% increase in container shipping demand, the latter is now expressed in fractions rather than multiples.

Events such as the Brexit vote and the election of Donald Trump demonstrate the apparent willingness of administrations to use trade as a political tool while the longer term risk is that shipping demand will decline as 3-D printing becomes cheaper and more convenient.

However, just as with the arguments about the impact of other technologies in shipping, these positions bear much closer examination than they are often receive.

As Jan Hoffmann, Chief of the Trade Logistics Branch at UNCTAD pointed out to the ICS annual conference during London International Shipping Week, the liberalisation of the maritime sector is in general positive for economic development and the job is far from finished.

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