Source: World Bank for GDP growth. Drewry Shipping Consultants and own elaboration for container volume growth.
TEU to GDP Multiplier, 1985-2016
The relationship (ratio) between container growth in terms of total volumes handled by ports and GDP growth is reflective of the fluctuations between a growth that is more internally driven (lower ratio) and a growth that is leaning more on trade (higher ratio). Recessions have no discernable impacts on the multiplier since as GDP growth slows down (or becomes negative on a few rare occasions), so does the growth of container volumes. Four phases can be identified.
  • Prior to 1990. Although containerized trade began to pick up in the 1960s, the multiplier was in the range of 2 to 2.5 (for each percentage of GDP growth, there was an equivalent of 2% to 2.5% of container volume growth). Globalization and trade liberalization was ongoing, but at a comparatively slow pace in terms of its impacts on container flows.
  • 1990 to 1999. This marked a period of fast containerization with the multiplier surging above 4, particularly with the beginning of offshoring. The global container shipping network expanded rapidly with new services and port investments.
  • 2000 to 2008. The multiplier declined in the range of 3, which corresponded to peak growth. This periods marked the most substantial growth of Chinese container port volumes, but also of the majority of ports around the world.
  • 2009-2016. Since the financial crisis of 2009, the multiplier has substantially declined, in the range of 2. By 2015, its value fell below 1 and by 2016 the multiplier was essentially zero, underlining that at this point GDP growth has less multiplying effects on container shipping growth.
The TEU to GPD multiplier is an important ratio since it is often used in port traffic forecasting, which tend to be associated with national economic growth prospects. The current trend illustrates that GDP growth has less of an impact, which can lead to exaggerations in future anticipated volumes. The ratio also considers the movement of empty containers and transshipment, which are the outcome of trade imbalances and the decision by shipping lines about how to organize their network. Changes in trade imbalances and transshipment volumes can have an impact on the ratio.