Effects on global trade and logistics
Global trade is shifting, and the centuries-old model that saw maritime powers located in the Western world control cargo flows through is giving way to a more multidirectional and multimodal future.
In this new dynamic, China begins to exert a greater influence on world trade. The launch of the New Silk Road, an initiative with an investment of multi-trillion dollars, aims to reshape intercontinental trade through a new network of land and sea connections between Asia, Europe and Africa, based on the old trade routes. The Mediterranean holds the key. China’s expansion to gain supremacy in the region’s ports does not stop growing.
2000 years ago, the first concept of free port was created between Chaldeans, Phoenicians and Carthaginians to facilitate trade. But the Mare Nostrum runs the risk of losing its leadership despite its advantages. The Mediterranean is located right where Asia, Europe and Africa are very close to each other, which makes this sea not only a neighbour for nearby regions, but also for the world.
In addition, both in the Mediterranean and worldwide, the weight of the sector is important. Logistics must be effective because, without this, the economy cannot develop. Efficient logistics will contribute to reducing the total cost of products for export, import and distribution in the domestic market. It is simply blood for the economy and a real lever for growth and competitiveness.
The maritime power model that has been carrying cargoes across the high seas for centuries is giving way to a more multidirectional and multimodal future. The world shipping map will change. It is necessary and urgent to bet on the 2030 Agenda and on a sustainable model. 23% of CO2 emissions are attributed to transport (World Bank, 2016), so the common priority is to move towards greater efficiency and eco-sustainability throughout the Mediterranean region.
The shipping industry needs to set its own challenging but achievable voluntary CO2 reduction targets for the maritime sector or risk targets being imposed. Shippers are under increasing pressure to respond to the climate change challenge. “They must understand, monitor and report their supply chain carbon footprint in order to meet their reporting and regulatory obligations,” said GSF (Global Shippers Forum, 2015). “However, they are dependent on the shipping industry to provide accurate data on emissions and the GSF believes urgent action is now needed to agree targets. It is crucial to select a measure that will incentivise technical and operational measures to reduce CO2 and not simply pass on additional costs to shippers” (GSF, 2019).
The Mediterranean has more than 450 ports and terminals, represents 30% of world maritime trade by volume, and is the leading tourist destination in the world (UfM, 2016). It is the point of confluence of three continents (Africa, Asia and Europe), where 500 million people live. From this new situation, a large platform with unique characteristics may emerge to facilitate world trade.
This strategic location is unique to facilitate global trade and logistics. But the regional economic potential needs to be unlocked. For this, we must bet on integration and build a unified strategy that encourages investments, construction, modernisation and management of infrastructures, that also allows growth and competition with another region.
It is urgent to develop the interconnection of the South, create a communication network efficient land, air and maritime transport, and promote multimodal corridors. Here the Mediterranean corridor should be paramount. The region has a great potential to build up intermodal solutions engaging maritime and railway resources with other modes of transport to increase its global freight volumes and viability. What remains to be done is to promote and maintain emerging intermodal demands through the provision of a legal framework and financial or regulatory incentives, so as to foster intermodal transport, which can only come true with a regional alliance and its partnership with Europe. A roadmap is needed to allow a more efficient and sustainable growth of intermodal operations.
After the COVID-19 pandemic, globalisation is wounded. For this reason, we recommend going towards the regionalisation of the economy, betting on the sectors that benefit from geographic proximity and economic complementarity. Regional economic integration and the creation of a common Euro-Mediterranean Economic partnership must be objectives to be achieved to face the new and post-pandemic challenges.
The economic and social importance of logistics and the awareness of its shortcomings in the Mediterranean, require a strategic vision shared by public and private actors. A national and regional policy articulated with professional players that integrates the other strategic objectives (ecological transition, industry, regional planning, …) is also needed, as well as a sustainable organisational approach and logistical planning of the territory, articulated with a new industrial policy reoriented on European, Mediterranean and African exchanges.