New trends are emerging in the global maritime trade pattern.

Maritime trade demand drives transportation demand, and the rise and fall of maritime trade directly affects the rise and fall of the transportation industry. Accurately grasping the pattern of maritime trade undoubtedly has profound significance for the healthy development of the maritime industry.

In recent years, with the development of economic globalization, the rise of the knowledge economy, and the development of modern science and technology, goods have been trending towards being lighter, smaller, and thinner. Pipeline and air transportation methods have also developed rapidly, diverting some of the maritime trade.

In terms of maritime trade, the increasing social demand for environmental protection has restricted the development of fossil fuel trade, and the structure of maritime trade has been adjusted accordingly. Despite this, Clarkson's statistics show that in recent years, the weight of world maritime trade has basically remained at 84%, and maritime trade remains the pillar of the global economy and trade.

Overall Trend of Maritime Trade Volume

With economic development, the increasing demand for basic raw materials, energy, and consumer goods by countries and regions has led to a continuous growth trend in world maritime trade volume, which is highly correlated with the world economy.

However, affected by policy trends and changes in economic structure, the growth rate of world maritime trade volume is significantly greater than the frequency and amplitude of fluctuations in world economic development (see figure).

From 1987 to 2016, the average growth rate of world maritime trade volume was 3.85%. During this period, the Asian financial crisis and the US subprime mortgage crisis caused world maritime trade volume to experience two negative growth turning points in 1998 and 2009, with world maritime trade fluctuating significantly with the world economy.

After the subprime mortgage crisis, as central banks around the world continuously released ample liquidity, asset prices inflated unprecedentedly, and the development of the real economy stagnated, which further narrowed the average growth rate of maritime trade and lagged behind the pace of economic growth in recent years.

From 2010 to 2016, the growth value of global industrial production fell from 8% to 0.2%, and experienced negative growth in 2012. At the same time, the growth rate of world maritime trade volume fell from 9.4% to 1.8% in 2015, 1.4 percentage points less than the economic growth rate that year. In 2016, due to factors such as the decrease in domestic coal prices in China after "de-capacity," the significant drop in international iron ore prices in the first half of the year, and the active production of local refineries in China, China's imports of coal, iron ore, and crude oil increased significantly, driving the rebound of world maritime trade volume to 2.9% in 2016, but the growth rate remained in the low-speed growth range below 3%.

Using Clarkson's world maritime trade/GDP multiplier can more intuitively reflect the relationship between trade and economic development: From 2010 to 2015, the world maritime trade multiplier fell from 1.73 to a low of 0.58, rebounding to 0.93 in 2016.

In recent years, due to insufficient domestic driving force, the slow recovery of the economies of developed countries such as Europe and the United States, and the adjustment of the economic structure of developing countries, economic growth has slowed down, and the volume of world maritime trade has entered a low-speed growth channel.

However, the following four factors will promote the long-term healthy development trend of maritime trade. First, the implementation of China's "Belt and Road" initiative will drive economic growth in countries along the Asia-Africa-Europe routes; second, the economic policies of various countries to "shift from virtual to real" are gradually taking effect, which will effectively drive a virtuous cycle of the world economy; third, the gradual rise of India and the demographic dividend of the world's long-term population growth will promote consumption demand in the long term; fourth, the expected vision of the globalization of e-commerce will unlock the cross-border trade potential of small and medium-sized enterprises.

Trend of Changes in the Commodity Structure of Maritime Trade

In the past 30 years, with the improvement of people's living standards and the enhancement of environmental awareness, the commodity structure of maritime trade has been quietly changing: According to the Clarkson report, from 1987 to 2016, the trade volume of major sectors such as dry bulk, crude oil and refined oil, containers, and LNG has maintained continuous growth, with some commodities showing significant changes in weight and slowing growth in recent years.

Driven by bulk commodities, dry bulk experienced two peaks from 2000 to 2007 and from 2010 to 2014, with continuous growth in trade volume and a 1.8 percentage point increase in weight to 43.4%. Among them, the trade volume and weight of iron ore have repeatedly hit new highs; the trade volume of coal continued to rise before experiencing a negative growth turning point in 2015, and its weight has slowly fallen since its peak in 2013; the trade volume of grain has maintained continuous growth, and its weight has shown a "U-shaped" trend of rising from high to low and then rising again, with good momentum in recent years; the trade volume of minor bulk commodities has continued to grow, but its weight has continued to decline, and there is currently no sign of a stop in the decline.

The trade volume of crude oil has maintained continuous growth, and its overall weight has fallen by nearly 9 percentage points. However, in the past two years, affected by the significant drop in oil prices, the growth rate of trade volume has increased, and the weight has rebounded somewhat, but the momentum is weak; the trade volume of refined oil has grown steadily, and its weight has remained stable.

The trade volume of containers has been relatively active, with an average growth rate as high as 9.4%, which has recently fallen to around 4%, and its weight has increased from 5% to 15.5%.

LNG trade has grown rapidly, with an average growth rate of 6.4%, and the growth rate has shown a counter-trend upward trend in recent years, while its weight has increased from 1.2% to 2.4%.

Currently, factors such as high costs and high prices restricting the healthy development of clean energy and the United States changing its approach to limiting the development of fossil fuels will likely temporarily stabilize the demand for fossil fuels such as coal and oil in the coming years.

At the same time, for a longer period of time, the rigid demand of emerging developing countries such as India and the continuous growth of the world's population will continue to support the trade volume of bulk commodities such as iron ore and grain. Due to the faster growth of other commodities, the weight of bulk commodities is expected to stagnate or slowly decline.

With the improvement of living standards, people's sensitivity to prices has decreased, and they will be more inclined to focus on quality and efficiency. The basic concept of trade has also gradually shifted from comparative advantage to competitive advantage. Due to the inherent safety and convenience of container transportation, the volume of suitable container cargo has grown rapidly in recent years. With China's "Belt and Road" initiative and the gradual maturity of the e-commerce trade model for small and medium-sized enterprises in the future, the global volume and weight of container trade are expected to have further room for growth.

The Paris Agreement on climate change came into effect on November 4, 2016. This agreement will make arrangements for global action to address climate change after 2020, and green and low-carbon development has become a global consensus in energy development. Therefore, in the long run, clean energy will be the common direction of global development, and LNG trade has great development potential.

Trend of Changes in the Geographical Distribution of Maritime Trade

The recovery of the real economy still takes time, and the rapid rise of emerging economies and developing countries has led to an overall continuous shift of the center of gravity of maritime trade towards emerging and developing economies: According to the Clarkson report, from 2008 to 2016, led by strong demand from China and India, Asia's position in bulk dry bulk has become prominent; the Middle East, the Southern Hemisphere, and regional container trade have grown rapidly.

In 2016, China's imports of iron ore, coal, and crude oil reached 1 billion tons, 201 million tons, and 353 million tons respectively. Iron ore and crude oil imports ranked first globally, while coal ranked second. Iron ore imports accounted for more than 70% of the global total. India's imports of coal and crude oil rapidly increased to 203 million tons and 215 million tons, ranking first and second globally respectively. Japan's iron ore imports decreased to 130 million tons, ranking second globally. European imports of iron ore, coal, and crude oil decreased by 15%, with its weight decreasing by 8 percentage points to 17%. North America's imports of iron ore, coal, and crude oil decreased by 45% due to a more than 50% reduction in crude oil imports, and its weight also decreased by 7 percentage points to 6%.

Affected by the sluggish economies of Europe and the US, China's economic slowdown, and the impact of larger ships, the average growth rate of the three container trunk lines between North America, Europe, and the Far East from 2008 to 2016 was 2.07%, lower than the average of 3.73%, and its weight decreased to 29.3%. The growth rate of non-trunk line trade accelerated, and its weight increased to 29.8%. Regional routes grew rapidly, and their weight increased to 40.9%. The growth rate of container import and export trade in the Middle East and the Southern Hemisphere has significantly accelerated.

With the increasing emphasis on the environment by emerging and developing countries, coupled with the expected growth in US LNG exports, the global share of renewable and clean energy in the electricity, automotive, and other industries is expected to grow rapidly.

On September 3, 2016, the Standing Committee of the National People's Congress approved China's accession to the Paris Agreement on climate change. It is foreseeable that after 2020, China's imports of coal, crude oil, and other resource-based fossil fuels will gradually shrink, and India will further lead the bulk cargo market. At the same time, economic development, the extension of the concept of suitable cargo sources, the expected arrival of the era of global e-commerce, and the launch of China's Belt and Road Initiative are expected to shift the global center of container trade towards countries along the Belt and Road.

Times are changing, trade patterns are changing, and maritime trade models are also changing. With the deepening of the internet, the "internet + full-process logistics" trade model across borders, regions, and industries will become the main theme of maritime trade for small and medium-sized customers in the future.

Only by changing our thinking, conducting in-depth research, adapting to the times, and following the trend can we promote the continuous progress and healthy development of the shipping industry.