Cargo Shipping Market Boom: 4.8% CAGR Forecast for the Coming Period
Cargo ships, also known as freighters, are used for handling bulk trade, such as the transfer of goods, cargo, and materials. They are equipped with cranes to load and unload cargo and designed with welded steel in different shapes and sizes to last for years. These merchant ships find application in instants where road and air transportation lack in one or more considerations, such as cost and volume. The global cargo shipping market is expected to grow in tandem with international trade, bolstered by a number of other factors explained in the article below.
Cargo ships fall into different categories based on the type of goods.
Cargo ships commonly transport packaged food, apparel, chemical, machinery, furniture, and automotive, and, sometimes, passengers. The availability of substantial space for bulk items and the safe handling of delicate materials at a reduced cost largely drive the global cargo shipping market.
Unpredictable environmental conditions cause loss of cargo and containers, leading to significant losses for the waterways transportation industry. Oil spills from oil carrying cargo ships and tankers result in the depletion of the marine ecosystem, which threatens the environment. These factors are hampering the growth of the cargo shipping industry. However, the development of new ports globally, extension of existing ports, and adoption of container transportation are anticipated to offset the drag in upcoming years. Additionally, growth in the manufacturing of automotive, consumer goods, and new medicinal drugs further drives the demand for cargo shipping to enable the movement of goods and profit maximizations.
Strong industrial and economic growth has upsurged existing cargo freights and carrier systems, and modern technologies and advancements have transformed boats and small vessels into strong, durable, and long-lasting large watercraft capable of carrying bulk goods and passengers.
Economic growth in developing economies is paving the way for international trade, bolstering the growth of the air, road, and waterways cargo industries. The global cargo shipping market has witnessed significant growth in the past decade, with urbanization and industrialization enabling many countries to invest in logistics services.
The advent of e-commerce and high penetration of the internet have significantly upsurged the volume of orders, with different types of storage, loading, receiving, and securing services necessitating different types of ships for transportation. Countries along seashores have invested in port infrastructure to cater to the rising demand in the last few years.
Cargo ships have long been used by merchants since the B.C. era; however, organized transportation did not come in place until the latter half of the second millennium A.D. Cargo ships have also been a victim of sea piracy since the 18th century, costing governments and transporters the additional expense of deploying armed forces or accompanying ships for the protection of man and material.
Globalization, urbanization, growth in the number of heavy industries, and a lack of alternatives to transport heavy bulk items across ports are significantly driving the global cargo shipping market growth.
Investments in port infrastructure and the rise in the global supply and demand cycle are encouraging countries to trade via seaways. ASEAN Free Trade Area (AFTA), North American Free Trade Agreement (NAFTA), and Trans-Pacific Strategic Economic Partnership (TPSEP) are some of the free trade agreements boosting the cargo shipping market. The bulk demand for raw materials in manufacturing and distributing the processed and final product to global users has upsurged the demand for cargo shipping in recent years.
Manufacturers Segment by Application to Witness Strong Growth, with Impetus From the Rising Demand for Bulk Raw Materials from Overseas & Growth in Aftersales Market
Primary end-users of the global cargo shipping industry include food and beverage, electrical and electronics, mineral fuels and oils, and manufacturing, among others. The manufacturing segment is anticipated to witness a significant growth rate during the forecast period owing to the rising demand for raw materials in the manufacturing process. Increasing investments and funding to support logistics are expected to enable manufacturers to purchase more and more bulk orders in the near future, which will boost the global cargo shipping market.
The transport of fruits, drinks, solids, manufactured raw materials, petrol, diesel, and iron ore, and electrical and equipment overseas is expected to boost the market growth in the upcoming years. A shift in maritime trade has increased the number of raw material exporters and finished and semi-finished goods’ exporters and importers. The trade of natural gas, iron ore, and coal has witnessed some of the highest demands across the globe during the last couple of years, which is further expected to dominate the oceanic trade between key exporters.
Europe is expected to witness the second-highest growth in the global cargo shipping market. Germany, the U.K., Russia, France, and Spain are expected to contribute significantly as these regions are tourist spots and industrial hubs that involve in the bulk trading of goods and services from the global market. Europe also has a highly equipped infrastructure and some of the busiest sea routes in the world.
The liner shipping connectivity index for the East Coast in North American ports has increased after the Panama Canal expansion in 2017. The region is home to some of the key producers and consumers of oil and natural gas and export materials to almost every part of the country. The region contributes to 8% of the total container port-handling activity. Furthermore, the agreement between the U.S., Mexico, and Canada as a replacement of the North American Free Trade Agreement is also expected to diffuse some of the uncertainty about trade policy and support trade growth.
The participation of Latin America, the Middle East, and Africa (LAMEA) in the cargo shipping market has witnessed a downslide in the recent years, which in turn has reduced the importance of the traditional exporters of liquid and dry bulk cargoes. However, the region is currently becoming more active in exporting value-added goods, including manufactured goods, processed food, and industrial products.
Public-private partnerships, investments in cargo infrastructure, and government support have led to drastic developments in the LAMEA region. An increasing number of start-ups and manufacturing companies and developing healthcare infrastructure are expected to significantly surge the demand for and supply of products to and from the region during the forecast period
Some of the key players in the global cargo shipping market include companies such as
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