- Global port throughput growth now expected to align more closely with GDP growth.
- Trade tensions and protectionist policies pose growing risks to the shipping and port sectors.
- Tariff increases and vessel size escalation may lead to overcapacity and pricing pressures at smaller ports.
Fitch Ratings has released a report highlighting the challenges facing global port volumes due to escalating trade tensions and a slowing global economy. The report indicates that the growth rate of cargo volumes at ports is expected to moderate, aligning more closely with global GDP growth, a shift from the previous trend where container throughput growth outpaced GDP by multiple times.
Rising Protectionism and Policy Shifts Add Pressure
The report also notes that the increase in protectionist and anti-globalization rhetoric, particularly in the U.S. and U.K., represents a growing risk for the ports sector. Additionally, the growing size of ships means that smaller ports not equipped to handle the biggest ships may suffer price wars if volumes shrink.
In the U.S., Fitch expects port volume to remain consistent with the U.S. economy, but individual ports with higher exposure to commodities or trading partners targeted by tariffs and trade policies may see greater volatility. As shipping consolidation continues, mergers and acquisitions and changes to alliances could affect port services.
Fitch Ratings also highlights that the increase in U.S. tariffs has led to a rise in the effective tariff rate from 2.3% in 2024 to 8.5%, with projections of further increases. This surge in tariffs is expected to impact global trade volumes, particularly for export-driven economies in Europe and China, negatively affecting seaport connectivity and shipping routes.
The combination of trade policies, economic slowdown, and infrastructure overcapacity presents a complex outlook for global seaports. While some regions may show resilience, others may face sustained pressures, requiring strategic adaptation and coordinated policy responses to navigate the uncertainties ahead.
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Source: Fitch Ratings
