International trade and freight by 2050 Jari Kauppila, Senior Economist Intertanko, London, 18 Nov 2015
Intergovernmental Organisation 57 member countries (23 non-oecd) focussing on transport A strategic think tank for global transport policy issues An annual summit of Ministers
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Model framework International Trade (world regions)* Centroids Mode split Weight model Shortest path assignment to routes by mode Model steps sequence Outputs: 310 centroids, 20 products International trade by product in weight and tonne-km by origin-destination pair by mode Related CO 2 emissions by mode and region Travel time and delay by link and node, border crossing times, capacity
Underlying network model Source: ITF International Freight model OpenStreetMap, OpenFlights, Sea Project, UCL
What drives future trade? Scale and distance Size of the economies Distance (restrictions to trade, transportation technology, etc.) Production factors Physical and human capital (natural resources, arable land, skills) Changes in productivity Transport policies Changes in global value chains Geopolitical forces
Global trade elasticities have changed 3.4 3.2 3 2.8 2.6 2.4 2.2 2 Average 1990-2007 1.8 1.6 1.4 1.2 1 Average 2011-2013 0.8 0.6 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Own calculations based on World Bank and OECD
Emerging economies still drive growth % average annual rate 8 GDP growth 7 6 Emerging economies 5 4 World 3 2 1 0 Advanced economies 2000-2010 2010-2020 2020-2030 2030-2040 2040-2050 2050-2060
A growing share of trade between emerging economies 2012 2050 2060 Within non- OECD 15% OECD w ith non-oecd 38% Within OECD 47% Within non- OECD 33% Within OECD 25% OECD w ith non-oecd 42%
Emerging economies move to higher valueadded activities changing trade composition Value-added shares by sector China India Euro Area Japan USA Services 43% 49% 51% 58% 72% 69% 75% 71% 78% 71% High-skilled manufacturing Other sectors (agriculture, energy and other manufacturing) 16% 41% 21% 31% 7% 41% 13% 29% 8% 9% 20% 22% 10% 12% 6% 15% 17% 16% 8% 21% 2010 2060 2010 2060 2010 2060 2010 2060 2010 2060
Implications for future global freight Global freight will more than quadruple by 2050 (by a factor of 4.3) (trade value by a factor of 4.2) Average hauling distance +17% Increasing capacity constraints can hamper economic growth Strong growth of CO 2 emission (+290%) undermines climate change goals An unprecedented challenge
Global freight volumes and CO 2 emissions by corridor North Pacific route Intra-North America +344% +263% +270% +191% North Atlantic route Intra- Europe +280% +195% Mediterranean and Caspian Sea +715% +689% +406% +315% Intra-Asia +403% +332% +374% +273% North Pacific route South Pacific route Intra- South America South Atlantic route Intra- Africa Indian Ocean route Oceania Freight volume in billion tonne-km CO 2 Emissions in million tonnes
Tanker related tonne-km to grow by a factor of 4 30000 Tonne-km for chemicals, oil, gas and petroleum products 2010 and 2050 2010 2050 25000 20000 15000 10000 5000 0 Oceania South America Africa SOUTH PACIFIC Europe SOUTH ATLANTIC North America Asia MEDIT AND CASPIAN SEA INDIAN OCEAN NORTH PACIFIC NORTH ATLANTIC
Ports may require additional capacity The increase in movements in some ports may be more than 10 times greater
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Domestic share of global freight 10% of international trade takes place within domestic borders
Domestic share of trade-related CO 2 emissions 10% 30% of international trade takes place within domestic borders of total traderelated CO 2 is emitted here
International trade related CO 2 emissions Sea 37% 2010 Air 7% Rail 3% Sea 32% 2050 Air 9% Rail 3% Road 53% Road 56%
Aligning policies across supply chains Improve capacity management Invest in missing links Prepare for mega-ships Increase vehicle utilisation Many freight facilities are underutilised or managed at low efficiency level Focus on managing supply chains not only nodes More alternative and multi-modal connections to increase efficiency Adapt infrastructure to more and bigger vessels Also at port-hinterland links Improve load factors and reduce idle times across supply chains
2 1 Corporate Partnership Board Established in 2013 as the ITF s platform to enrich policy analysis and discussions with a corporate perspective Set to grow to some 50 companies, from all modes of transport and associated sectors, with importance placed also on a balanced geographical representation