Irish Maritime Transport Economist 2023, Volume 21
The IMDO has released its 21st edition of the Irish Maritime Transport Economist (IMTE), reporting on the performance of the maritime industry in Ireland in 2023.
The Irish maritime industry faced a series of global challenges in 2023. Prices rose sharply across large economies, suppressing consumption at home and abroad. In addition, the global energy transition continued to alter the makeup of raw materials arriving at Irish ports. As a result, both container and bulk traffic through Irish ports declined in 2023. But the industry remains resilient, and is facilitating robust Irish domestic demand in what was a year of challenging economic conditions.
The issues facing the Irish shipping market in 2023 can be understood under the themes of inflation and energy transition. Following a sharp rise in 2022, global inflation rates remained high in 2023. High inflation has suppressed demand for manufactured or consumer goods, such as those carried in containerised form, and this is evident in global seaborne trade volumes. World seaborne container trade grew by just 0.3% in 2023, which, excluding the impact of COVID-19, is the slowest rate of growth since the financial crisis of 2008. LoLo traffic through Republic of Ireland ports declined by 5% in 2023, while RoRo traffic fell by 2%. When converted, the volume of container traffic through Irish ports fell by approximately 3% in 2023.
In order to tackle these inflation rates, Central Banks in major economies swiftly raised interest rates which had the effect of slowing economic growth.
Driven by these challenges, RoRo and LoLo volumes at Irish ports underperformed in 2023 relative to their long term trend, and underlying growth in both sectors is currently flat. That is not surprising, given the difficult economic environment within which Irish importers and exporters have traded in recent years, a period which includes COVID-19, Brexit, the Russian invasion of Ukraine and steep increases in energy prices. When these challenges are considered, the theme of unitised traffic at Irish ports becomes one of resilience. Both RoRo and LoLo traffic at Irish ports in 2023 is at almost exactly the level it was in 2019. In addition, Irish traders are connected to a greater number of mainland European ports than ever before, as post-Brexit capacity has become more diverse. Given the challenges faced in the intervening years, that is a remarkable performance and testament to the durability and adaptability of the Irish ports and shipping networks.
The decline in total Irish port tonnage in 2023 was also heavily influenced by dry bulk products, and this is indicative of the fact that as the Irish economy transitions away from fossil fuels, the composition of raw materials arriving at our ports will be reshaped. Dry bulk volumes, which are comprised of loose, non-containerised products for industrial or agricultural purposes, fell by 14% to its lowest total since 2010. The decline was driven in large part by two commodities: coal and fertiliser.
As reported by the Sustainable Energy Authority of Ireland (SEAI), 50% of Ireland’s electricity generation comes from pipelined natural gas, with a further 37% from wind energy. However, the movement of fossil fuels through Irish ports is likely to be replaced by other traffic, such as wind turbines and infrastructure related to battery technology, and this will be captured in cargo modes other than dry bulk. Irish port infrastructure will need to adapt to these changes in Irish energy generation in the coming years.
Liam Lacey, Director of the IMDO, commented: “The IMTE is a collaborative effort that relies on the support and confidence of industry stakeholders including the ports, shipping operators, industry bodies and the Department of Transport. The maritime transport sector is a success due to the vitally important work these stakeholders do. Maritime transport is the lifeblood of Irish trade, responsible for 90% of all goods transported internationally. The sector underpins growth, efficiency and competitiveness in our economy and 2023 was another year of uninterrupted access to international markets through our ports and shipping services. The sector’s record of meeting and overcoming significant challenges instils confidence. We look forward to working with all stakeholders to ensure that our maritime industry continues to serve the existing and future needs of the Irish economy.”
Click here for a copy of the full report.
For more information, please contact:
Daniel Fallen Bailey, Economic Advisor and author of Quarterly Reports. E: daniel.fallenbailey@imdo.ie