Ports and Shipping - The Demand for Seaborne Transport and Global economy.

Byline: S. Kamal Hayder Kazmi

International Experts recorded that the global economy is highly dependent on shipping, which meets approximately 85 percent of the worldwide demand for transport. Over time, changes in global growth are expected to lead to changes in the world's seaborne trade centre of gravity. World GDP growth was predicted to shrink by 4.2 percent in 2010 and by 3 percent during 2011, and be almost 2.7 percent in 2012. China's economy has explained a lot of resilience and represents 80 percent of the GDP in East Asia and the Pacific region, but its growth rate was predicted to decline to 7.8 percent during 2012.

The Experts also recorded that the Eurozone outlook is uncertain because of the sovereign debt crisis, as are its potential pessimistic repercussion effects on the worldwide economy. Despite the unrest tied to developments in the worldwide economy, there are some bright spots in both the country and industry outlooks. Worldwide seaborne trade has recovered from the recession in 2010, growing by 8.6 percent during 2010 and 7.4 percent in 2011, and is anticipated to grow another 8.5 percent in 2012. Despite comparatively strong growth in seaborne trade, supply is still overwhelming. Hence, no main market improvements are predicted in the short term. Moreover, the new vessels ordered in 2011 accounted for 72 million dead weight tonnes (dwt), down from 151 million dwt in 2010, and this statistics is predicted to remain low.

A shrinking order book will raise the pressure on yards, which will be forced to offer even more competitive prices as they gradually run out of orders. Newbuilding prices already declined on average by greater than 40 percent compared to 2008. Looking ahead according to the DNV report shipping 2020, the centre of economic activity will shift toward...