After enjoying record profits in 2021 and 2022 thanks to a pandemic-era boom in demand, container shipping are now grappling with slowing global exports and dampened consumer spending as inflation levels remain elevated.
This has raised expectations that the industry could face a fresh round of restructuring, as smaller players struggle with idled ships and narrowing margins, while the biggest players seek to consolidate market share further.
Mergers and acquisitions are hardly new in this industry, which has seen the number of dominant players in container shipping shrink from 25 companies controlling half of the global capacity 25 years ago, to just 10 ocean container lines in three major alliances holding nearly 85 percent of the global market in 2020.
But in the post-pandemic era, consolidation could take on a fresh impetus and direction, as carriers are being forced to rethink their alliances and strategies to ensure they have the scale, financial muscle and innovative edge to stay afloat in choppier waters.
Carriers of all sizes are under growing pressure to decarbonise their fleets. Many are also moving to digitally transform their operations to capture new opportunities, amid the continued surge in global e-commerce, the reconfiguration of global supply chains as well as the rise of new manufacturing hubs like Vietnam.
Against this backdrop of rapidly shifting market trends, the Singapore Maritime Week 2023 brings together industry experts and players from all over the globe to explore fresh perspectives, exchange views, and chart new paths toward a more sustainable, digitalised future for the maritime industry.
SMW 2023: Tackling the industry’s biggest challenges
The SMW’s line-up of panellists and speakers will address key topics such as The Maritime Green Transition in the Current Global Economy, which would likely feature a lively debate over how to push ahead with net zero goals while juggling an economy in transition.
A brighter outlook for the industry could be emerging, spurred by a rebound in major economies like China, which is expected to stage a strong recovery after ending its zero-COVID-19 policies, as well as the US, which could reverse its slowdown by late 2023.
Indeed, some players already betting that the current slump could end in the second half of this year.
What is clear is that these trends are likely to strengthen the case for consolidation.
One case in point is the merger between Norwegian-based OSM and Singapore-based Thome to form OSM Thome in January 2023. This marks one of the biggest consolidations in the third-party ship management sector in recent years. The merged entity, which will have over 450 ships under full technical management and 550 vessels under crew management, would have a presence in 22 countries.
This merger reflects the growing recognition that size – be it headcount, financial robustness or geographical reach – is increasingly vital to remain competitive in a post-pandemic environment.
The maritime industry will also need to invest significant resources in cutting-edge technologies like artificial intelligence, automation, and Big Data, which can make maritime operations as well as supply chains more efficient, safe and resilient.
This can also position them better to tap new growth opportunities such as the global digital freight forward market, which is expected to grow at an average rate of 23 percent over a decade to reach US$22.9 billion in 2030, according to Allied Market Research. While this accounts for 8 percent of the total global freight forwarding market, there is significant room for growth in the longer term as digital transformation becomes mainstream in the industry.
It is thus timely that this year’s SMW will feature keynote speeches and panel discussions at the MarineTech Conference on topics such as Maritime Digital Transformation, Smart Ports and Smart Shipping, as well as Smart Ship Developments, Trends, and Priorities. These are key topics as the industry continues to focus efforts on upgrading, and digitalising their operations and their fleets.
Navigating the rough seas will require timely insights and collective intelligence, which SMW 2023 hopes to bring to the table.
The Singapore Maritime Week, an annual gathering of the international maritime community to advance key industry issues and exchange ideas to bring the sector forward, will be held from 24 to 28 April 2023.
Register your participation at https://registration.mvents.asia/SMW2023/