Following the recovery in global goods trade earlier in 2021, supply chain issues and shipping gridlock have slowed global trade growth.
The latest quarterly WTO goods trade barometer shows a read-out of 99.5 indicating growth slightly below the baseline trend, reflecting “a broad loss of momentum in global goods trade”.
GTR Review reports that the index is in line with a revised trade forecast published by the WTO in early October which predicted that the post-pandemic rebound in global trade would taper off in the second half of 2021.
Cars, components, containers
Automotive products saw the steepest decline, falling from 106.6 to 85.9 as a shortage of semiconductors hampered vehicle production worldwide.
This shortage of semiconductors was reflected in the electronic components index (99.6), which fell from above trend to on trend.
Container shipping saw its score fall from 110.8 to 100.3, while raw materials dropped from 104.7 to 100.
Only the air freight index (106.1) remained firmly above trend as shippers sought substitutes for ocean transport.
Backlogs persist
The WTO report says easing demand for traded goods is illustrated by falling export orders.
“Cooling import demand could help ease port congestion, but backlogs and delays are unlikely to be eliminated as long as container throughput remains at or near record levels,” it says.
Small nations hit hard
Meanwhile the UN has warned that shipping costs due to the global supply chain crunch will push up global consumer prices by an additional 1.5%, reports the FT.
Smaller import-dependent developing nations will be hit even harder, the report days. Consumer prices are expected to rise by another 2.2% for the world’s 46 least developed nations and 7.5% for small island developing nations such as Fiji, Mauritius and Jamaica.
The Maritime Executive says that the global economic recovery is being threatened by high freight rates and the residual effects of COVID-19 on the shipping industry.
Port investment
The UN is calling for immediate investment in ports and infrastructure as well as urgent attention on ending the crew change crisis.
“The current surge in freight rates will have a profound impact on trade and undermine socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal,” said UNCTAD secretary general Rebeca Grynspan.
“Returning to normal would entail investing in new solutions, including infrastructure, freight technology, digitalisation and trade facilitation measures.”