Cargo Shipping Market Size, Share & COVID-19 Impact Analysis, By Cargo Type (Liquid Bulk, Dry Bulk, General Cargo, Container Cargo), By Industry Type (Food & Beverages, Manufacturing, Oil, Gas & Ores, Electrical & Electronics), and Regional Forecast, 2021-2028

The global cargo shipping market size was 10.85 billion tons in 2020.  The market is projected to grow from 11.09 billion tons in 2021 to 13.19 billion tons in 2028 at a CAGR of 2.5% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 2.65% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Cargo shipping is a mode of transportation used to transport items, goods, cargo and others, from seaport to the destination through vessels, cargo ships, and others. Shipping offers the cheapest mode of transport per ton. It is preferred due to its economic & efficient long-distance transportation with less environmental pollution.

Rising demand for import/export of manufactured goods, the bulk transport of raw materials, and affordable food items are fueling the demand for waterborne freight transportation. Global supply chain expansion, liberalizing trade policies, and technological advancement in waterborne shipping have propelled the trade of intermediate and manufactured products and significantly reduced coordination and transportation costs.

Hence, increased economic liberalization, especially in the developing economies, and the enhanced efficiency of shipping as a mode of transport are responsible for the cargo shipping market growth.

COVID-19 IMPACT

Increase in Blank Sailings and Reduced Global Trade Volume in 2020 Owing to COVID-19

Owing to the pandemic, cargo shipping container port volumes and container trade volumes have decreased in the first five months of 2020. According to a study published by the International Transport Forum (ITF) in April, the volume decreased by 8.6% in February. The decline in trade volume is significant in North America and Europe; however, it is lower in the developing economies such as the Middle East, the Indian Subcontinent, and Latin America.

The global impact of the COVID-19 disease has severely impacted the global health & economy. Further, it has also led to changes in the overall landscape of maritime transport & trade. The COVID-19 has significantly lowered short-term cargo shipping shares. In addition, UNCTAD has recently estimated that international maritime trade volume will fall by around 4.1% in 2020.  And the same is projected to recover and expand by 4.8% in 2021. Similarly, most of the cargo shipping news from the companies has reported the severe impact on import & export activities along with the key market players' free trade agreements.

Moreover, the pandemic has shrunk the shipping volume by 4.1%. Reduction in container ships, ferries, and industrial & mining activities impacted dry bulk trade in 2020. Further, the pandemic significantly impacted oil and gas trade because the global oil demand fell with the interruption of large parts of the global economy, restrictions on travel and transport, and cuts in industrial activity and refinery output. Furthermore, according to the industry expert from periodical Maritime Executive, the total sales/orders of new tankers, dry bulk, and container ships has declined up to 50% in 2020 due to pandemic. However, most experts are optimistic about the resurgence of dry bulk shipping volumes in 2021. This factor is mainly due to rapid urbanization, industrialization, and economic growth. Steady movement/improvement and increased investment in transportation & other infrastructure, which requires large quantities of steel and other industrial items/products, will be a major growth driver for the global shipping industry.

Reducing supply has responded to the falling demand by the major carriers,' i.e., canceling services by largescale idling of vessels by the ship operators. The number of blank sailings (188 in February and March 2020) increased considerably compared to the last few years. Idle cargo vessel capacity reached 10.6 percent or 2.5 million Twenty-foot Equivalent Units (TEU) of capacity in March 2020. Hence, major carriers have averted low prices for cargo/freights shipping services due to these capacity reductions.

The reduced demand for these shipping also translates to lower activity for the major container ports. For instance, in terms of volume, containerized cargo handled by Chinese ports declined by 5% in January, with a significant drop of 17% in February and a lesser decline of 2% in March. The bargaining power of the ship operators will increase owing to the increase in blank sailings, i.e., deferral of terminal handling charges. For instance, terminal charges at Hamburg (Germany) port are paid after sixty days. However, the carriers seek to extend the payment period to 90 days.

Hence, a considerable decline in container cargo handled by ports and increased blank sailings is expected in 2020.

LATEST TRENDS

Increasing Stringency of Emission Regulations over the Forecast Period

In January 2020, the mandatory implementation of the Global Sulphur Cap regulation issued by the International Maritime Organization (IMO) came into effect. The regulation requires ships to use a variety of fuels to limit the sulfur content to less than 0.5%, which is a considerable reduction from the previous cap of 3.5% in force since 2012. Sulfur emissions will be greatly reduced and improve the environmental footprint of the cargo or container shipping industry. Hence, stringent emission regulations are expected to influence the market's growth.

DRIVING FACTORS

Capacity Optimization via Digital Transformation to Fuel Industry Growth

Several carriers are increasingly partnering with startups in the shipping industry that focus on data collection of cargo movements and vessels that can enable optimal cargo routing and enhanced vessel deployment, among other benefits. For instance, startups such as Transmetrics focus on analyzing cargo positioning data to accurately predict cargo volumes that can help carriers avert empty back-haul trips. Hence, the capacity optimization of deployed vessels is expected to grow the cargo shipping market revenue.

High Efficiency and Decreased Environmental Impact to Augment Growth

According to the Swedish Network for Transport and the Environment, cargo shipping produces lower exhaust gas emissions for each ton of cargo transported per kilometer than road, rail, or air transport. This type of shipping is also highly efficient as an average of 10,000 products and goods can be transported on a large containership on a single voyage. For instance, nearly 7600 cars can be handled by a few car carrier ships on a single trip compared to the fleet of trucks and several miles of rail cars that would be required for the same quantity.

Hence, low environmental impact and greater efficiency of this shipping method are primarily driving the market's growth.

RESTRAINING FACTORS

Global Trade Tensions to Restrain Market Growth

The Trans-Pacific shipping route accounts for a large quantity of the global cargo shipping volume. However, due to trade tensions, particularly between China and the U.S., imports from China have become more expensive. Hence, a demand and volume drop is expected by carriers, and they have significantly decreased capacity, especially on the Trans-Pacific route. Furthermore, some sectors have faced uncertainty in investment plans and increased cost of inputs. They have been compelled to relocate manufacturing facilities from China to regions such as South-East Asia and Eastern Europe.

Hence, mounting trade tensions are likely to restrain the market's growth.

SEGMENTATION

By Cargo Type Analysis

Container Cargo Segment to Exhibit a Higher CAGR owing to Use of Standard Size Containers

By cargo type, the market is segmented into liquid bulk, dry bulk, general cargo, and container cargo. Import demand for liquefied petroleum gas (LPG) in Europe and India increases. Furthermore, expanding supply from the U.S. and rapidly evolving energy policy shifts in Asia that have increased demand for liquefied natural gas (LNG) are some of the factors expected to lead to the augmented growth of this segment.

The standard size of the containers allows for high efficiency in intermodal transport as they can be loaded onto rail wagons, ships, and inland barges and transportation of large quantities in a single trip. Hence, the container cargo segment is anticipated to exhibit a higher CAGR over the forecast period. 

By Industry Type Analysis

Urban Areas Segment Dominated in 2020 Fueled by Changes in Land Use Patterns

Based on industry, the market is segmented into food & beverages, manufacturing, oil, gas & ores, and electrical & electronics. The manufacturing segment is expected to dominate the market in 2020. Factors such as the rise in economic growth, particularly in developing economies in the Asia Pacific and the Middle East, are driving the growth of this segment.

The oil, gas & ores segment is also expected to show considerable growth in the market. An increase in exports from the U.S. and rising demand in countries such as China and India owing to the high production levels of conventional fuel vehicles are some of the factors propelling the growth of this segment.

REGIONAL INSIGHTS

The Asia pacific stood at 4.43 billion tons in 2020 and expected to reach at 5.32 billion tons in 2028. Asia Pacific region is considered as automotive companies manufacturing hub. China accounted for the largest cargo shipping market share regionally and across the globe. However, tariff escalation between China and the U.S. is expected to significantly impact the global cargo shipped in supply chain restructuring and diverting trade flow, which increases costs for consumers and producers. However, a survey conducted by the American Chamber of Commerce in China has indicated the preference for South-East Asia (SEA) to relocate facilities for U.S. manufacturing businesses from China, with only 6% considering relocation to the U.S. Hence, these factors are expected to lead to a dominant share of Asia Pacific for this market.

The Middle East & Africa is also expected to show augmented growth in the market. Improved port connectivity and increased emphasis on modernizing and expanding existing ports have boosted the trading volumes for this region.

Europe is also expected to show good growth in the market owing to port call optimization and substantial investment in infrastructure that have enabled faster loading and unloading of goods in countries such as the U.K., Spain, and Germany.

KEY INDUSTRY PLAYERS

Maersk, MSC, and CMA CGM are the Leading Players in the Market

Key players in the market include A.P. Moller-Maersk and MSC (the form the 2M alliance), CMA CGM Group, China COSCO Shipping, Nippon Express, OOCL, and Evergreen (that form the Ocean alliance) and Hapag-Lloyd AG, Yang Ming Group, ONE and HMM Co., Ltd. (part of THE alliance). According to the review of maritime transport 2019, published by the United Nations Conference on Trade and Development (UNCTAD), the three major alliances account for nearly 87% of the cargo shipped on the Trans-Pacific route, 98% of the Asia-Europe trade, and around 80% of the deployed containership capacity across the globe.

These alliances' consolidation efforts are expected to improve risk mitigation and boost the utilization rate of existing containership capacity. For instance, HMM Co., Ltd., previously an associate member of the 2M alliance until 2019, joined THE alliance in April 2020. Such alliances can negotiate reduced charges for port services and intensify pressure for additional government subsidies for infrastructure funding for ports to accommodate larger containerships. Hence, an increase in mergers & acquisitions by the three major alliances is expected over the forecast period.

LIST OF KEY COMPANIES PROFILED:

• A.P. Moller-Maersk (Copenhagen, Denmark)


• Mediterranean Shipping Company S.A. (MSC) (Geneva, Switzerland)


• CMA CGM Group (Marseille, France)


• Orient Overseas Container Line Limited (OOCL) (Wan Chai, Hong Kong)


• China COSCO Shipping (Shanghai, China)


• Evergreen International Corp. (Taipei, Taiwan)


• Hapag-Lloyd AG (Hamburg, Germany)


• Ocean Network Express Pte. Ltd. (ONE) (Tokyo, Japan)


• Yang Ming Group (Keelung City, Taiwan)


• HMM Co., Ltd. (Seoul, South Korea)


• Panalpina World Transport (Holding) Ltd. (Basel, Switzerland)


• Deutsche Bahn AG (Berlin, Germany)

KEY INDUSTRY DEVELOPMENTS:

• September 2020 – The CMA CGM Group deployed one of the largest container ships, the CMA CGM BRAZIL, to operate on the weekly Columbus JAX service on the U.S. East Coast.


• August 2020 – HMM announced the sale of its 49% stake in the TTI Algeciras (Total Terminal International Algeciras), a container terminal in Spain, to the CMA CGM Group.


• May  2021 – MSC is partnering with blockchain platform WAVE to increase widespread adoption of its (charges related to loading of goods) in India to ensure service continuity and streamline affected operations.

REPORT COVERAGE

The market research report covers a detailed analysis of the market and focuses on key aspects such as leading cargo shipping companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report delivers an in-depth market analysis of several factors that have contributed to its growth over recent years.

Report Scope & Segmentation