While the hard-pressed shipping industry is recovering from recent declines, it is still being hindered by fragile global economic conditions as well as depressed freight rates and an oversupply of vessels, says a new United Nations report, quoted by the UN News Service.

The Review of Maritime Transport 2010, produced by the UN Conference on Trade and Development (UNCTAD), shows that international seaborne trade contracted by 4.5 per cent in 2009 to 7.94 billion tons, which is below 2007 levels. It had climbed to an all-time high in 2008.

Although a global recovery is currently under way, it is uneven, slower than the recoveries that have followed previous recessions, and subject to numerous uncertainties and to the fragile global economic conditions, according to the report, an annual publication that provides important information on this vital sector.

"Signs show that the shipping industry and seaborne trade are recovering, but it will likely take some time for the industry to return to its 2009 levels," UNCTAD said.

Maritime transport is the single most important transport mode, with about 80 per cent of the market share in the global movement of goods. In some developing countries this percentage is much higher, due to cumbersome cross-border procedures and an underdeveloped land transport infrastructure.

The report says that seaborne trade in dry bulk commodities – such as iron ore, grain, coal, bauxite/alumina and phosphate, which represent around one quarter of seaborne trade – actually grew by an estimated 1.4 per cent in 2009. However, this figure masks fluctuations by commodity type, it adds.

The supply of new vessels, the report points out, showed no signs of abating.

At the beginning of 2010, the world merchant fleet reached 1,276 million deadweight tons (dwt) – an increase of 84 million dwt over 2009. Despite this increase, the combined effect of a downturn in demand and an oversupply of vessels meant that freight rates for many vessel types remained depressed.

The report also details recent developments in maritime legislation, such as steps by the UN International Maritime Organization (IMO) regarding the scope and content of an international regime to control emissions of greenhouse gases from international shipping.

Every year the report has a regional focus and this year it is on Asia since 2007, when UNCTAD last reported on the region. The report notes that recovery in the region – where gross domestic product (GDP) growth decelerated to 4 per cent in 2009, its lowest level in eight years – remains fragile and is subject to downside risks.