Most supply chain professionals are probabaly aware that global trade volumes have been weak in recent years, showing very little if any increase over that time.
That naturally has had a big impact on ocean container and bulk carriers, who have seen rates plummet after they had added capacity in anticipation of continued high growth rates that didn't materialize (though we will note there has been a strong recovery in bulk rates of late, with big gains in the Baltic Dry Index, and some recovery on the container sides as well in recent months.)
After seeing recent remarks from Maersk Line CEO Soren Skou about the decline in trade as a percentage og global trade, we thought it would be good to get some data, leading to the chart below, which is our Supply Chain Graphic of the Week:
Global Trade as a Percent of World GDP
Source: World Bank Data
The chart shows an interesting history. After remaining flat in the first half of the 1960s at about 25% of GDP, trade's share started to rise, seeing a big jump in the first half of the 1970s, we're guessing the result of soaring oil prices at the time, with trade reaching about 35% of GDP by 1975.
With some pauses, it has been a mostly steady rise since then, reaching 61% in 2008 before a sharp drop in the recession year of 2009.
But 2010 saw recovery almost to 2008 levels....before trade volumes flatlined and even saw some decline for the next three years. The 2015 number was 58.3%, the last year for which we have data.
Where do we go from here? Hard to say, with protectionist drifts in the US for sure as well as elsewhere. There would seem to be no catalysts for a return to trade growth.
SCDigest just wonders if there is not some sort of natural ceiling in play here, at maybe around 60%, that will hard to ever get much above.
What do you think?
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