The pace of global maritime activity will lose steam next year as economic turmoil, conflict in Ukraine and the impact of the pandemic weaken trade prospects, the U.N. agency UNCTAD said on Tuesday.

The world’s biggest investment banks expect global economic growth to slow further in 2023, after a year turbulent by Russia’s invasion of Ukraine and rising inflation.

This slowdown is expected to affect shipping, which carries more than 80% of world trade, although oil tanker freight rates could remain high.

In its ‘2022 Review of Shipping’, the United Nations Conference on Trade and Development (UNCTAD) projected that global maritime trade growth would moderate to 1.4% this year and remain at that level in 2023.

This compares with an estimated growth of 3.2% in 2021 and a global shipment volume of 11 billion tonnes, up from a 3.8% decline in 2020.

For the global period 2023-2027, average annual growth of 2.1% is forecast, a slower pace than the previous three-decade average of 3.3%, UNCTAD said, adding that “downside risks weigh heavily on this forecast.”

“The recovery of shipping and logistics is now in jeopardy due to the war in Ukraine, the persistence of the pandemic, continued supply chain constraints and the cooling of the Chinese economy and the ‘zero COVID’ strategy, along with inflationary pressures and rising cost of living,” UNCTAD said in the report.

Increased consumer spending in 2021 pushed container shipping markets to record levels, with ports packed around the world, which was also partly due to the effects of lockdowns.

UNCTAD said the “logistics bottleneck will dissolve with the rebalancing of demand and supply forces”, but added that risks of industrial action in ports and inland transport had increased.

UNCTAD called for investment in maritime supply chains to make ports, sea fleets and inland connections better prepared for future global crises, climate change and the transition to low-carbon energy.

“We need to be better prepared to deal with global value chain shocks,” UNCTAD Secretary-General Rebeca Grynspan told reporters.