Major Challenges the Shipping Industry Needs to Prepare for
The drive towards sustainability is transforming the shipping industry. Innovative business models, next-generation technology, and changing regulations will have a profound effect on both carriers and forwarders. Business as usual is no longer acceptable because societies and consumers are increasingly aware of the importance of sustainable practices. Today, consumers demand more transparency and new policies aimed at reducing the impact of pollution on nature and human health.
Changing Focus and Landscape
Changing trading patterns and regulations, together with a growing focus on decarbonization and climate change are set to transform the shipping industry in the years to come. Also, radical changes in technology and the socio-economic landscape will create challenges for shipping businesses. According to experts, the main challenges are related to potential governance failure, environmental pollution, geopolitical uncertainty and tension, global economic crisis, and data theft and cyber-attacks. Other issues that dominate the agenda include:
- Pervasive corruption
- Increased piracy
- Transfer of invasive species
- Natural and man-made environmental disasters
- Availability and cost of financing
- Skill and workforce shortages
- Air pollution
- Major safety incidents
- Shortfall and failure of infrastructure
All these are issues that international freight forwarders are not prepared for. For instance, shippers feel unprepared for cyber-security issues because technologies are constantly evolving and attacks are broadening in scope. The fact is also that businesses are increasingly adopting technologies based on automation and interconnectivity, which cyber-criminals are also exploring. Changing trading patterns are also an issue that carriers face.
In particular, a major driver of change is the growing importance of emerging economies, mainly due to significant infrastructural investment and economic and demographic trends. On the other hand, global protectionism is on the rise and can hinder the growth in trade, impacting the multilateral trading system supported by WTO. Finally, the challenges associated with changing trading patterns also arise due to trade conflicts, especially between the two economic superpowers. While experts expect that demand for dry bulk cargo will remain stable in the short term, retaliatory measures and changes in tariffs can result in market realignments and trade flow fluctuations.
How to Mitigate Risks and Improve Operational Efficiency
Shipping experts point out that a lot can be done to mitigate risks and improve efficiency, especially in maritime shipping. This includes better designed coatings, hull forms, propellers, and engines, resulting in more eco-efficient ship designs. Other measures may include use of weather routing systems, speed optimization, and slow steaming.
Also, carriers will have to begin using fuel cells, biofuels, and natural gas in place of heavy fuel oils. Ship electrification, battery systems, and hybrid solutions can help improve operational efficiency while infrastructural improvements and upgrades will result in improved port capacity and faster turnaround times. The use of performance management systems, computational fluid dynamics, big data, and sensors also has the potential to contribute to more efficient and faster international freight services. The same holds for remote operations and automation, smart maintenance, and system integrations.