Source: World Bank for GDP growth (In Constant 2015 dollars). UNCTAD and own elaboration for container throughput growth.
The multiplier effect is usually defined by the relationship (ratio) between container growth rates (%) in terms of total volumes handled by ports over GDP growth rates (%) for the same year. It reflects fluctuations between growth that is more internally driven (lower ratio) and growth that relies more on trade (higher ratio). Recessions have no discernible impact on the multiplier as GDP growth slows down (or becomes negative on a few rare occasions), with container volumes. Five 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 were ongoing but progressed at a comparatively slow pace in terms of their impact on container flows.
- 1990 to 1999. This marked a period of rapid containerization, with the multiplier surging around 4, particularly following the onset of offshoring to East Asia. The global container shipping network expanded rapidly through new services and port investments, in part driven by offshoring and industrialization in new areas.
- 2000 to 2008. The multiplier declined to approximately 3, corresponding to peak growth. This period was marked by the most substantial growth in Chinese container port volumes, and by the majority of ports worldwide.
- 2009-2014. The financial crisis of 2009 marked an inflection point, with the multiplier declining in the range of 2.8. Still, the multiplier effect remained strong, particularly since many export-oriented economies experienced strong growth in their containerized exports.
- 2015-. Since 2015, the multiplier has fallen below 1, underscoring that at this point, GDP growth has a much smaller multiplier on container shipping growth. Even the COVID-19 pandemic had little effect on this fundamental relationship. This may indicate peak containerization, as the conventional drivers of long-distance trade have receded.
The TEU-to-GDP multiplier is an important ratio because it is widely used in port traffic forecasting, which is closely linked to national economic growth prospects. The current trend indicates that GDP growth has less impact, which can exaggerate anticipated future volumes and raise questions about its relevance. The ratio also must also account for the movement of empty containers and transshipment, which are driven by trade imbalances and shipping lines’ decisions regarding the organization of their service networks. Changes in trade imbalances and transshipment volumes can affect the ratio.