01 Feb 2022
As the world continues to adapt to the uncertainty that comes with living through a pandemic, the shipping industry was one of many that experienced disruptions as a result of the outbreak. It has since seen the sector pivot and deal with the challenges it presented, but we still needed to be and be prepared for the challenges that come in 2022. To help plan ahead, here are four trends that HullWiper MD Simon Doran sees playing out this year.
1. An increase in shipping costs
A report by the United Nations Conference on Trade and Development (UNCTAD) indicates that soaring shipping container prices are not likely to decrease anytime soon. The current surge in container freight rates could increase global import price levels by 11% and consumer price levels by 1.5% between 2022 and 2023.
Continued demand for ocean freight from Asia to the US, a lack of capacity and countless pandemic-related delays has played a role in soaring shipping rates. While these rates have remained steady since the start of the year, a critical hurdle for the maritime sector right now continues to be the disruption in the supply chain, with nearly 600 container ships stuck outside ports worldwide since October 2021. Experts within the maritime sector predict that the rise in shipping costs could continue until around February 2022 and broker BRS said in its latest market report that for tankers a sustained recovery for the suffering sector may not come until 2023, unless vessel scrapping sees a dramatic upturn.
2. More delays
A major backlog continues to hamper operations, as evidenced by the average delays on shipping from China to Europe increasing by up to six days in December 2021.
As consumers continue to spend at a healthy rate, the industry is scrambling to meet the demand and vessels are having to sit at ports longer as they wait to load and unload containers. According to the Marine Exchange of Southern California, a record 109 ships were waiting to enter the ports of Los Angeles and Long Beach in early January. Europe has not come out unscathed as 19 ships off the ports of Rotterdam and Antwerp wait to unload. Congested ports and production delays have been two contributing factors to these schedule disruptions with delays likely to continue into 2022.
3. The rise of automation
There has been a swift move into a more digitalised and automated world as the industry adapts and finds new ways to keep trade flowing as efficiently as possible. While a range of digital innovations and solutions have been brought about as a means to adhere to COVID health and safety protocols, it has also aided in increasing competitiveness and enhancing overall operational efficiency. The transition towards digitalisation and automation has galvanised the industry towards achieving its goal of zero emissions by 2050.
Countless ports across the globe have adopted smart technologies with the aim of cutting costs and doing less while achieving more. An example of one of the ports leading this charge is Holland’s Port in Rotterdam with the implementation of robotic offloading technology. This automated method has seen the increase of productivity and speed to make the process as smooth as possible.
4. Sustainability remains a key spoken word and a focus
Sustainability has been a focal point for the maritime world over the last few years. Reaching the target of a 50% reduction in CO2 emissions by 2050 remains firmly on the agenda - development of green technologies such as the innovative app GreenSteam and the implementation of eco-friendly shipping practices such as regular hull cleaning are just a few practices the industry is utilising to mitigate the contributions we’ve made to harmful gas emissions.
A growing concern around the state of our planet has also given rise to the eco-conscious consumer. Consumers are increasingly questioning the environmental price tag of their purchases - they are looking to align themselves with companies that share their green values, with around 70% of consumers opting to pay 5% more on goods and services that are more environmentally friendly.
As the world embraces a sustainable future and attempts to mitigate the effects of climate change, businesses will have to adapt and face the challenges that come with going green but will ultimately reap the profitable rewards.