Will it be a better 2019?

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The maritime world changes not only with the tides: as the world economy picks up and then hits a lean spell, so those floating on global waters find themselves in periods of calm and then strong economic winds. We can always call any 12 months the ‘year of this and that’ but in 2018 the overall impression is that it was a year of increasing regulations. Yet there are signs that 2019 might be more promising for the global shipping industry. although that will depend on where you are in the world and what maritime sectors you are in.

The International Maritime Organisation (IMO) has perhaps laid the foundations for the most dramatic change with the announcement that the global sulphur cap commencing 1 January 2020 would not be diluted in any way. The IMO has often been criticised for not having teeth – it creates rules but has no real means of enforcing them. To do this the IMO has rely on flag states and Port State Control, none of which are completely 100 percent effective. This has been the criticism of the sulphur 2020 cap and its enforcement and yet this year the IMO has been at the heart of many new initiatives and still remains an important part of the maritime world.

The sulphur cap could also be seen as another ‘win’ for the environmental lobby which proved during the year that as a disparate band they could still bring pressure to bear on parts of the maritime industry. This was evident in the way one NGO in Brussels campaigned vigorously for stricter regulations to combat what they see as the unacceptable, dangerous and greedy practice of demolishing beached final voyage vessels in Asia and other poorer parts of the world. There is merit in this matter but the question is – do they understand the basic economics of those working for €2 a day in some of the poorest parts of the world?

Piracy bubbled back to the surface in 2018 (although in truth it never really went away) in countries in Africa such as Nigeria as it went into coastal waters and deltas. The world’s navies have managed to enforce some sort of order but the paramount threat in the future will be cyber-security. These threats will only increase and experts and commentators tell us we are on the cusp of increasing global incidences. As with the future of autonomous vessels, we can see a dangerous time ahead with cyber-crime operated from land a real threat to what happens on the world’s seas. In 2019 the emphasis may well change to more digital crimes but the physical threats will still be there.

Shipbuilding is on the increase or in reality, just a few yards worldwide are benefitting from large carrier builds. Who you believe depends on what country you come from: South Korea and Japan are at loggerheads over shipbuilding: with South Korean shipbuilders top of the list for new orders in 2018, particularly with their skill in building LNG carriers. The Japanese – with some suggested support from the EU – are unhappy with South Korean policies in the industry. The current claim is that government aid for some struggling domestic shipbuilders is unfairly reshaping the global shipbuilding market and this could prolong the current glut of vessels which is damaging to the sector. It is still a competitive industry and we should expect more from it in 2019 despite these squabbles and more consolidation.

2019 is unlikely to be plain sailing for anyone connected with the maritime industry but there are encouraging signs in many areas. Container traffic will hopefully see more standardisation in information sharing; the LNG shipping market is likely to see a more positive outlook as the cleaner fuels race hots up; there will be more technology probably meaning more reductions in the human element of maritime working and more reliance on cloud processing and blockchain operations. The uncertainty that has pervaded the shipbuilding, bunkering and technological side of the industry will likely be replaced by new issues as we step into the New Year. What is certain in 2019 is that as ever, those involved in the sea in its multifarious guises will as always, remain optimistic. The world economic forecasts for 2019 depend as ever, on those you listen to read and believe. A loose consensus suggests the global economy will slow moderately and yet others predict growth still above potential in most developed economies. These predictions might offer hope to the global maritime sector but the one thing we will all need this year is a dose of patience and a great deal of dedication to make it all work.

Sue Terpilowski
Author: Sue Terpilowski

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