UNCTAD: Less choice for some island shippers
Shippers on many trade routes are benefiting from the economies of scale resulting from the use of larger containerships, but the United Nations Conference on Trade and Development (UNCTAD) said consolidation in the industry has led to fewer companies providing services and a decreased number of liner services, a trend that could be a concern for some smaller countries, particularly small island states where land transport is not an option.
The average number of liner companies per country is 17.6 in 2010, against 21.8 in 2004, a decline of 20 percent, according to the most recent issue of UNCTAD's Transport Newsletter.
'In 2010, there are 41 countries that receive ships of only four or fewer companies, an increase of 25 percent over 2004. Mergers and acquisitions thus lead to lower levels of competition, which is of particular concern to countries with lower trade volumes,' the article said.
It added that several small developing island nations are among those least connected countries, with only one or two service providers, including Aruba, Dominica, Kiribati, Maldives, Marshall Islands, the Federated States of Micronesia, Palau, and Sao Tome and Principe. The report said the average number of services to these countries has also declined during most of the last seven years.
UNCTAD created a Liner Shipping Connectivity Index, and said the 10 best connected countries in the world are China, Hong Kong, Singapore, Germany, Netherlands, Malaysia, United Kingdom, Belgium, United States, and South Korea
'On the positive side, larger ships and a higher total TEU carrying capacity can cater for the growing global trade in manufactured goods, and economies of scale help to reduce costs. On the other hand, the larger ships also pose a challenge to smaller ports as regards the necessary investments in infrastructure. The network as such is not expanding in terms of companies or services. The trend seems to be towards lower costs but also towards less choice for shippers,' the authors of the UNCTAD newsletter wrote.
UNCTAD has also released its 2010 Review of Maritime Transport