Asia’s maritime transport sector strengthens global shipping connectivity, with China leading.
Asia continues to hold its position as the best-connected region to global shipping networks, according to the latest Review of Maritime Transport released this week. The report highlights that Asian economies dominate the global Liner Shipping Connectivity Index, with China ranking first, followed by the Republic of Korea and Singapore. Notably, Vietnam has experienced the highest long-term connectivity increase, recording a remarkable 199% rise since 2006.
The Liner Shipping Connectivity Index, first introduced in 2004 and computed by the United Nations Conference on Trade and Development (UNCTAD), evaluates key components of the maritime transport sector, including ship sizes, deployed capacity, the number of service providers, and weekly calls.
In shipbuilding, China, Japan, and the Republic of Korea continue to assert their dominance, accounting for approximately 95% of global output. In a significant milestone, China delivered over half of the world’s new ships in 2023.
However, Asia faces challenges from global trade route disruptions, primarily due to geopolitical tensions and climate change. The ongoing conflict in the Red Sea has severely impacted shipping through the Suez Canal, exacerbating congestion at major Asian ports. For instance, waiting times in Singapore nearly doubled from 24 to 40 hours between March and May 2024, while Port Klang in Malaysia saw an increase from 20 to 26 hours.
Additionally, climate-induced droughts have led to low water levels and draft restrictions in the Panama Canal in 2023, causing shipment delays and higher costs. These disruptions have adversely affected trade routes exporting grains and minor bulk commodities from the Americas to Asia, resulting in a 31% increase in sailing distances for completed journeys and a 25% decrease in cargo volume.
Despite these challenges, Asia remains a critical engine of merchandise trade, with 80% of goods transported by sea. The report indicates that in 2023, major maritime routes connecting the East and West accounted for at least 36% of global containerised trade. This includes vital connections from East Asia to North America, Northern Europe, and the Mediterranean. Notably, South-South routes linking developing regions in East and Western Asia, Oceania, Sub-Saharan Africa, and Latin America achieved the highest volume increase (+9.3%) in global containerised trade in 2023.
Sector-wise, technology exports from Asia, particularly in green energy and artificial intelligence-related products, are anticipated to drive further recovery in global merchandise trade. The demand for iron ore is expected to rise, driven by steel producers in Asia, while global gas trade is projected to increase due to expanding infrastructure for liquefied natural gas storage and transport, as well as rising demand from Asia and Europe.
The report also highlights the importance of Asian hinterlands in complementing port connectivity. Inland terminals, or dry ports, have the potential to enhance regional cooperation and benefit landlocked developing countries. Their development is integrated into the Asian Highway Network and Trans-Asian Railway Network, often referred to as the Eurasian Landbridge. The network of dry ports in China and various inland container depots in India has significantly improved trade flows by decentralising seaport operations, such as storage and inspections.
