After last year’s surge, international trade growth may slow in 2022

0

File image courtesy of Suez Canal Authority

Posted on February 25, 2022 at 8:55 p.m. by

The Maritime Executive







New data from UNCTAD shows that 2021 saw the strongest trade growth ever. The positive trend was supported by rising commodity prices, easing pandemic-related restrictions and a strong recovery in demand from economic stimulus efforts.


Overall, the value of global trade reached an all-time high of around $28.5 trillion in 2021, an increase of around 25% from 2020 and an increase of around 13% from previous levels. pre-pandemics of 2019.


With most of this trade facilitated by the shipping industry, it has become one of the main beneficiaries. Container shipping raked in $190 billion in 2021 to become the most profitable sector. Some analysts believe that by the end of 2022, industry sales could peak at $500 billion.


However, international trade growth is expected to slow in 2022. Slower economic growth is expected due to persistent inflation in the United States and concerns over China’s real estate sector, according to the IMF’s 2022 economic growth forecast. .


In addition, ongoing supply chain disruptions have prompted major companies to realign their supply networks. These efforts to shorten supply chains and diversify suppliers could affect global trade patterns in 2022.


Companies will accelerate outreach initiatives as they focus on improving reliability and managing risk for their supply chain networks. As a result, industrial demand will shift to different entry points as supply chain sources develop. For example, Mexico is poised to benefit as North American manufacturers will likely bring production and supply back to the Americas.


“Encourage more American companies to move the companies they have relocated to China and Southeast Asia closer to home,” Tayde Aburto, CEO of the American Business Association for electronic commerce (USBAEC), to the Mexican government.


Indeed, offshoring offers Mexico a crucial opportunity, “which, if seized in time, has the potential to help the country reverse years of slow economic growth,” recommends the latest Deloitte Mexico Economic Outlook.


It could also benefit US East Coast and Gulf ports, such as Charleston, Savannah and Houston, which are closer to Mexican suppliers.


In the short term, the shipping industry will feel a drop in international trade levels due to an influx of empty containers. In its latest weekly report, Sea-Intelligence noted that when global supply chains normalize, it will be difficult to manage an excess of voids.


“As the supply chain normalizes, this will potentially create a stack of 3.5 million empty containers from the trans-Pacific route alone. This will release a large amount of empty containers, especially in the United States. This will cause widespread congestion problems in the second half of 2022 and in 2023, in terminals as well as in container depots, unless carriers and container leasing companies start planning this development now,” Sea-Intelligence observed. .


Currently, around 11% of the world’s container fleet is stuck somewhere in the world, either idling on a ship or waiting to be unloaded, according to estimates by Lars Jensen, CEO of Vespucci Maritime, a consultancy firm. in sea transport.


To cover the gap, container production had to increase. In 2021, more than seven million new 20ft containers were added to the market, bringing the total available to nearly 53 million, according to Drewry.





Share.

Comments are closed.