Emissions, digitalization and protectionism: here is how the shipping world will change in the future
According to US advisor Basil Karatzas shipping transport is changing drastically
Athens- “Global shipping will never be like it used to be”, that's the summary of the seminary arranged by Bimco at 2018 Posidonia annual convention recently held in Athens Greece.
New regulations on sulphur emissions, 'Trump effect' digitalisation, business fights, electrical vehicles and Valemax ships are just few elements that will change raw materials shipping business.
Peter Sand, skilled market researcher at Bimco, asked the speakers what's happening in global shipping and Henriette Brent-Petersen, analysts at Dvb Bank, replied: digitalisation.
“A key element that will definitely change the shipping business and create new opportunities” said the analyst.
Digitalisation will help shipping and raw materials market to get closer to each other, showing milder peaks and shorter cycles “kicking out financial speculators from shipping making way for companies focusing on industrial development and long term approach” Henriette Brent-Petersen said.
Digital innovation might also change labour in shipyards, technology will increasingly replace manpower and forthcoming restrictions on sulphur emissions (to be enforced in 2020) will drastically hurt all players operating in shipping, illustrated Valentina Vignoli, market analyst at Peninsula Petroleum.
Service speed will become one of the leading factor opted for by shipowner to meet the new 0.5% sulphur restriction, however several facts must be evaluated: “The difference in price between current fuel and the new one (with low sulphur content) will progressively decrease, however the latter will be exclusively found, at least in the first two years, in larger ports”.
According to various analysts ships' operational efficiency will be worse than the slow steaming.
Furthermore, nobody knows if shipowners or global carriers will bear this price increase?
In essence, a large number of shipping companies will install scrubbers, particularly large ships like the Capesize among bulk carriers and VLCC among tankers.
Meanwhile, the effects ensued from the growing protectionist policy implemented by US President Donald Trump and from trade embargo against Iran, will have to be evaluated.
Even electric cars and a lower consumption of conventional fossil fuels would further affect market trend.
Finally, bulk shipping market shows a low and stable increase while bulk carriers' freight rates can generate positive results. On the other hand tankers' freight rate will still be suffering due to the high number of ships deployed in the last couple of years. According to Henriette Brent-Petersen, “liquid bulk market trend shows positive data and 2018 second half will further grow”, however “a structural recovery will gradually come in 18 months without substantial peaks”.
Still according to Basil Karatzas, number one at Karatzas Marine Advisors & Co., shipping transport “is changing and will be drastically different from the last decade. The market will be increasingly transparent, shipping transport will join a larger freight supply chain”.