Growth in the Shipping Industry: Future Projections and Impacts

Abstract

Since earliest times, ships and shipping have shaped civilization. Ships have been used for discovery, war, and leisure, but most of all for cargo transport. In his poem ‘Cargoes’, the British poet laureate John Masefield describes such activities through the ages, from the “Quinquireme of Nineveh from distant Ophir, ... With a cargo of ivory, and apes and peacocks ...” through the “ Stately Spanish galleon coming from the Isthmus ...” to the “Dirty British coaster with a salt-caked smoke stack, butting through the Channel in the mad March days, ....”1 While recognizing the past, this essay will focus on the potential growth in the shipping industry with a focus on commercial cargo shipping, and will exclude sectors such as cruise ships, ferries, offshore drilling and production units, tugs, barges, and related vessels. Since the end of World War ii, the world has seen an explosive growth in trade. Globally the sum of export and import values as a percentage of the total world gross domestic product (gdp) grew from around 20 percent in the late 1940s through early 1950s to close to 60 percent in 2011, with the shipping industry as the backbone of global trade.2 This growth is likely to continue. In its report, 2017 Outlook for Energy: A View to 2040, ExxonMobil projects a two billion increase in world population, a 130 percent increase in the global economy, and a 35 percent increase in energy demand.3 Further information developed by BP plc for its 2017 Energy Outlook report suggests a base case where world gdp almost doubles by 2035, driven by fast-growing emerging economies, as more than two billion people are lifted from low incomes.4