1. Maritime connectivity: Multimodal transport is key
Kuala Lumpur, October 2017,

2. Latest trends in maritime connectivity
What can be done to improve it
Logistics and multimodal transport

3. Latest trends in maritime connectivity
What can be done to improve it
Logistics and multimodal transport

4. Why “connectivity”?

5. Higher Liner Shipping Connectivity leads to lower trade costs
(Arvis et al, 2013)

6. More trade
-> More shipping supply
-> More competition
-> lower freights
-> More trade

7. Better services
-> More trade
-> More income to finance infrastructure
-> Better services

8. Lower Transport Costs
-> More trade
-> Economies of scale
-> Lower Transport Costs

9. To capture a country’s connectivity…
UNCTAD developed the Liner Shipping Connectivity Index – LSCI – using the following 5 components:
Companies
Services
Largest ship
Number of ships
TEU
Source for components: MDS Transmodal

10. To capture a country’s connectivity…
UNCTAD developed the Liner Shipping Connectivity Index – LSCI –

19. Latest trends in maritime connectivity
What can be done to improve it
Logistics and multimodal transport

20. 10 Recommendations
What can policy makers, researchers and the international community do to improve maritime connectivity

21. #1: Improving forecasts
Include transport connectivity in planning and trade models.
When negotiating trade deals, preparing trade policies or planning transport infrastructure investments, the research and forecasts can be significantly improved if data on maritime transport networks is included
Include maritime connectivity in planning and trade models. When negotiating trade deals, preparing trade policies or planning transport infrastructure investments, the research and forecasts can be significantly improved if data on maritime transport networks is included. “Successful connectivity combines planning for scale economies, development of sustainable infrastructure capacity, efficient use of such capacity, and economic inclusion aspects” (GICA 2017). UNCTAD aims at assisting in this endeavour by publishing two annual indices on maritime transport connectivity. Further research is recommended on the specific components of shipping connectivity, as well as linkages to other dimensions of transport and trade connectivity.

22. #2: Digital connectivity
Opportunities from modern network technologies
Cargo and vessel tracking and numerous other digital developments can help enhance multimodal connectivity.
Digital and other forms of connectivity. Better transport connectivity leads to lower trade costs and higher trade flows. At the same time, an E-Commerce, global value chains and technological advances also trigger further demand for better digital and other forms of connectivity. There are opportunities from modern network technologies such as cargo and vessel tracking and numerous other digital developments that can help enhance maritime connectivity. Researchers and policy makers need to consider maritime connectivity as a component of broader dimensions of connectivity.

23. #3: Cabotage
Linkages between national, regional and inter-continental shipping services
Limitations to cabotage markets can lead to unnecessary inefficiencies and loss of maritime connectivity.
Promote linkages between national, regional and inter-continental shipping services. Limitations to national or regional cabotage markets can lead to unnecessary inefficiencies and loss of maritime connectivity. Allowing international lines to also carry domestic trade and feedering cargo can enhance both, the competitiveness of the nation’s seaports, and the access of importers and exporters to international shipping services.

24. #4: Regional coordination
Ports may compete, but they also often serve the same lines and hinterland.
For ports along the same route, it makes sense to plan port investments jointly to accommodate the vessels that will serve this route.
Ensure regional coordination. Most seaports can serve more than one country, be it through in-land connections or via transshipment operations and not every country can be host to the region’s main hub port. For ports along the same route, it makes sense to plan port investments jointly to accommodate the vessels that are expected to serve this route in future. Regional organizations and international development partners can play an important role when planning the port investments in countries within the same region

25. #5: Seaports’ modernization
Ports compete, but they also often serve the same lines and hinterland.
For ports along the same route, it makes sense to plan port investments jointly to accommodate the vessels that will serve this route.
Invest in seaports and intermodal connections. Important determinants of a country’s maritime connectivity are beyond the control of policy makers. Notably the geographic position and the country’s own trade volumes are difficult to change. It is in the national seaports that investments can make a difference. These investments may take the form of PPPs, as most common user ports such as container terminals have in recent decades been concessioned or involved the private sector in some other form.

26. #6: Let ports compete
Competitive pressures will encourage port operators to maximise their efficiency and pass on those efficiency gains to their clients.
Inter-port competition should include neighbouring countries’ ports. Trucking markets, rail and road infrastructure, as well as transit regimes are key.
Promote inter-port competition. Competitive pressures will encourage port operators to maximise their efficiency and pass on those efficiency gains to their clients, the shippers and shipping lines. Inter-port competition should not be limited to national seaports, but also to neighbouring countries’ ports. Efficient trucking markets, rail and road infrastructure, as well as transit regimes are all important instruments to enhance inter-port competition

27. #7: Collaborative platforms
Under the WTO TFA and IMO FAL, countries should establish committees where stakeholders coordinate and cooperate
Such collaborative platforms should go beyond just compliance issues, and aim at all necessary reforms to facilitate international trade and its transport.
Build or strengthen collaborative platforms. Under the WTO TFA and IMO FAL, members should establish committees where stakeholders coordinate and cooperate in the implementation of trade and transport facilitation reforms. Ideally, such collaborative platforms go beyond just compliance issues, but instead aim at all necessary reforms to facilitate international trade and its transport

28. #8: Facilitate Transit
Maritime connectivity benefits from a larger hinterland for the seaports
Transit and multimodal transport can be facilitated in line with international standards and recommendations, including those of the United Nations, the WCO and the WTO
Facilitate international transit and cross-border trade. Maritime connectivity benefits from a larger hinterland for the seaports, to capture additional cargo from neighbouring countries. Transit can be facilitated in line with international standards and recommendations, including those of the United Nations, the WCO and the WTO. Regional and sub-regional transit regimes may also help and in fact are often more ambitious than the minimum requirements of the multilateral regimes.

29. #9: However: be strong! Connectivity is not everything
Pressure from shipping lines to invest in seaports to accommodate ever larger ships, especially for transshipment operations, may not be worth the extra cost. Without additional volumes, increasing just the ship size will in fact reduce the effective capacity of the seaport as it would require larger yards to handle the same total volume.
Connectivity is not everything. Pressure from shipping lines to invest in seaports to accommodate ever larger ships, especially for transshipment operations, may not be worth the extra cost. Without additional volumes, increasing just the ship size will in fact reduce the effective capacity of the seaport as it would require larger yards to handle the same total volume. Policy objectives need to be clearly defined, and improving maritime connectivity is not an end in itself – it should serve predefined purposes, such as enhancing trade competitiveness and employment

30. #10: Be realistic Keeping connectivity will be ever more difficult
Trade policies will need to realistically consider what type of goods and services the country can import and export. These may include be digital goods and services, or goods that are competitive by air transport, to complement the goods traded by sea.
Transport and trade policies. In view of current industry developments in liner shipping, including mergers, global alliances and ever larger gearless ships, it will be difficult and costly for some remote and small markets to maintain frequent and cost-effective liner shipping connections. Trade policies will need to realistically consider what type of goods and services the country can import and export. These may include be digital goods and services, or goods that are competitive by air transport, to complement the goods traded by sea.

31. Latest trends in maritime connectivity
What can be done to improve it
Logistics and multimodal transport

32. Facilitating trade

33. Geography of trade
Source: UNCTAD Review of Maritime Transport 2017, forthcoming

34. 1: Geography of trade Old Scenario:
Developing countries exported large volumes of raw materials and imported high value (low volume) manufactured goods
Source: UNCTAD Review of Maritime Transport 2017, forthcoming

35. 1: Geography of trade Today’s Scenario:
Source: UNCTAD Review of Maritime Transport 2017, forthcoming
Today’s Scenario:
Developing countries participate in globalized production. They also import raw materials and also export manufactured goods

36. World trade by stage of processing
Source: UNCTAD, Key Trends in International Merchandise Trade, 2015

37. Trade / GDP
Source: UNCTAD, based on data from UNCTAD-stat

38. Changing logistics expenditures
Inventory holding expenditures decrease, and Transport expenditures increase
UNCTAD estimates, based on CSCM – State of Logistics Report various issues. Data for United States

39. Latest trends in maritime connectivity
What can be done to improve it
Logistics and multimodal transport

40. Maritime connectivity: Multimodal transport is key
Kuala Lumpur, October 2017,