Global trade and ports volumes are likely to slow down to grow in line with world GDP, Fitch Ratings says in a new report. This cementing of a pre-existing trend is largely due to the growing geopolitical tensions and ongoing multinationals’ strategy to de-risk their supply chains after Covid-19 related disruptions.

The impact of slowing trade growth on global ports could restrict world throughput growth at ports to around 1x world GDP, rather than the higher multipliers we saw in the past. We expect to see regional differences in outcome, with manufacturing hubs continuing to register stronger growth.

Companies are considering a number of strategies to de-risk their supply chains following the bottlenecks we have seen in the past two years. These include building up inventory, diversifying suppliers to complement those from primary manufacturing hubs and investing in technology to enhance supply-chain planning. In addition, some governments are supporting reshoring for certain limited high-margin or critical products like vaccines or semiconductors. Otherwise, in the short-to- medium term, we do not expect significant shifts to supply chains, as these shifts are costly and difficult to execute.

We expect the volume impact on ports from supply-chain disruption and stockpiling to normalise over the medium term. We further expect ports in secondary production hubs (eg. Vietnam, India) or in manufacturing countries closer to US or Europe (Mexico, parts of Europe, north Africa) to benefit in the medium term, though it will be a few years before any such structural shifts are visible in throughput data. This may come at a cost to growth opportunities at certain ports in primary production hubs.