Connecting the world through global shipping networks

Abstract

Shipping, or the business of transport, is an essential means that facilitates international trading activities. Due to its cost-effective intermodal operations, most of the international trade in manufactured goods and an increasing share of commodities are transported through container shipping services, which are mostly provided by liner shipping companies. They form a network that connects practically all coastal countries worldwide with each other. Liner shipping operations are now increasingly involving transshipment in seaports that act as nodes in the network. Research on glo-bal liner shipping networks has expanded significantly. In particular, the United Nations Conference on Trade and Development (UNCTAD) has published the Liner Shipping Connectivity Index (LSCI) at the country-level annually since 2004. The term " connectivity " is increasingly used to characterize national trade competitiveness, and defined at different levels, such as at the country level and bilaterally. The UNCTAD LSCI is a useful indictor that reflects the overall position of a country within global container shipping networks (i.e., country level connectivity). In general, the average LSCI has continuously increased in many countries since its inception in 2004. An important element of the global trend in liner shipping is the container ship size. Both the average and maximum ship sizes are increasing in many countries. On the other hand, the number of companies that are providing services to and from the average country's seaports is declining. The number of carriers that are competing for the average country's cargo is also going down, with a decline of 34% from 21.1 carriers in 2004 to 14.6 in 2016. According to the UNCTAD, the best connected countries in 2016 are China and the Republic of Korea in East Asia, while Singapore and Malaysia have the highest LSCI (most active in trade) in Southeast Asia; Sri Lanka and India in South Asia; Morocco, Egypt and South Africa in Africa; and Panama and Colombia in Latin America and the Caribbean. There are three main policy areas that can help to improve the LCSI of a nation: Cargo volume: Increasing hinterland access and facilitating transit from