TCFI - Global Trade, theory and Development

Since the 2000s, maritime connectivity in Sub-Saharan Africa has undergone significant transformations, largely driven by the advent and expansion of containerization. Previous works have shown that containerization have both increased the number and variety of connections with other regions. However, its impact on intra-regional connectivity remains an open question. While numerous scholars have emphasized the enhanced connectivity of African ports with foreign regions like Europe and Asia, there is still considerable debate regarding the extent to which this process has also strengthened maritime links among African countries themselves.
This paper explores the evolution of maritime connectivity in West Africa by analyzing vessel movements over the 2006-2016 period. To capture the nuances of maritime connectivity across different phases of containerization, we investigate networks involving container vessels. Drawing on data on vessel movements from Lloyd's database, this study critically examines the structural dynamics of maritime networks to assess whether containerization has facilitated greater intra-regional connectivity or primarily reinforced West Africa's connections with external regions.

Maritime transport is an essential artery of the global economy, and in 2023, two hotspots in this artery where shipping traffic is concentrated, the Panama Canal and Red Sea, experienced major navigational disruptions. In the Panama Canal, a historic drought limited the slot to a maximum of approximately 60% after August, and in the Red Sea, many shipping companies opted to divert vessels from the sea after mid-December owing to Houthi attacks on merchant ships, both bound to the Cape of Good Hope. This study assesses the global economic and environmental impacts of these disruptions. It is estimated that the direct economic loss due to the dual disruption of shipping was approximately $3.7–5.6 billion per month owing to increased shipping distances, and the total loss was $125–181 billion per year, including ripple effects when this condition was fixed, and that CO2 emissions increased by approximately 10–16% in global interregional shipping. In addition, the mitigation effects of utilizing the Arctic Sea route were estimated.

Shipping networks play a key role in facilitating international trade. The resilience of shipping networks and the connectivity which they provide has important implications for access to global markets for countries and ports. The study uses the Structure-Conduct-Performance (SCP) framework to analyze the impact of the disruptions to shipping networks and resilience of shipping connectivity. The unit of analysis being shipping services as they represent the essence of shipping networks. Data mining will be performed to extract information from various sources including shipping line service schedule and vessel information. The Red Sea crisis brings to fore attention on the vulnerability of shipping networks. The crisis saw container shipping lines reroute their services to avoid the traditional Suez Canal shipping lane. Investigation of shipping services operated by the Ocean Alliance and THE Alliance saw reductions to weekly port-calls with additional vessels deployed to cover the longer sailing distance. While shipping connectivity to ports in North Europe and Asia were largely unaffected, there were serious negative impacts on Jeddah and Piraeus. Changes to port-calls also reveal container transshipment traffic in the Eastern Mediterranean and Red Sea ports to be vulnerable to the crisis.

Maritime transport connectivity has become a priority for many countries due to the key role it plays in its integration into international transport networks that facilitate and boost international trade flows. Given its importance for the economic development of countries, this paper aims to study the effect of container shipping connectivity on bilateral maritime trade flows between countries belonging to Latin America and the Caribbean (LAC) with the rest of the world during the period 2006-2022.
To do so, we will focus on the analysis of two sources of heterogeneity that influence the relationship between connectivity and trade. On the one hand, the heterogeneity inherent to the countries involved in said commercial transaction, classified through the regional blocks to which they belong and distinguishing between import and export flows. On the other hand, the heterogeneity inherent to the products traded, since their nature and logistical needs can influence the effect of connectivity on their flows.
The results obtained show that an increase in container maritime connectivity has a positive effect on trade flows in LAC. Specifically, a 10% increase in connectivity would have an average effect on the value of trade flows for LAC of 3.4%, double that observed worldwide. The impact of connectivity on trade is greater for South American countries than for countries belonging to Central America and the Caribbean. By geographic area, connectivity has a greater impact on trade with Asian countries. In the analysis by product, the positive effect of connectivity on trade is concentrated in two large sectors: textiles and clothing, together with agricultural products and the agri-food industry. Based on these results, a set of recommendations is proposed focused on improving connectivity through ports as vital hubs of the infrastructures involved in the maritime transport chain.