Just as the world appears to be riding out of the COVID-19 storm with economic recovery on the way, another has hit. The Russia-Ukraine conflict has escalated geopolitical tensions, rattling the global commodity market and freight rates.
Clearly, uncertainty and risk have been defining constants for the maritime industry in the past few years, which continues to be shaped by trends in decarbonisation and digitalisation.
Here are four maritime trends to watch this year and beyond.
1. Decarbonisation tops the agenda
Decarbonisation efforts continue to gain momentum globally as the industry steers towards the International Maritime Organization’s (IMO) targets to halve annual greenhouse gas emissions from international shipping by 2050, compared to levels in 2008.
Ms Aw Kah Peng, Chairman of Shell Companies in Singapore, shared: “In 2021, there was a marked acceleration by airlines, shipping companies, and Asia Pacific governments in recognising the need to act on energy transition and to address climate change."
“Across the region, countries put out their net zero emissions ambitions and signalled future changes in carbon policies. In many ways, this just underscores that climate change is a global issue and while approaches may differ from region to region, all will need to act.”
On 9 March 2022, Singapore’s Minister for Transport S Iswaran unveiled the Maritime Singapore Decarbonisation Blueprint 2050, which will support the decarbonisation of the maritime industry. At least SGD$300 million in additional funding will be earmarked for initiatives under the plan.
Rashpal Bhatti, Vice President of Maritime and Supply Chain Excellence at BHP, expects to see “a wider commitment to net zero by 2050, or even earlier” from its shipping partners.
“This in turn should create more concrete signals around which future fuels our industry needs to be scaled more quickly, while also providing cargo owners and customers a clearer differentiation between vessel owners/operators who have progressed on the sustainability journey and those who still need to catch up,” he said.
2. Digitalisation speeds up
The digitalisation drive continues to open up new opportunities in the maritime industry, reaping the benefits of speed, automation, and higher productivity. Port operators are looking into using 5G technology, for instance, to boost connectivity and become smart ports. Incidents like Ever Given’s blockage of the Suez Canal could become incidents of the past.
Additionally, BW Group Chairman Andreas Sohmen-Pao noted that the best opportunity to deploy technology in shipping is in measuring, reporting, and reducing emissions. The IMO has chosen “New technologies for greener shipping” as the world maritime theme for this year, reflecting the significant role technologies can play in the green transition.
“It’s hard to optimise assets without high-quality data, and we now have the tools to be able to track consumption and emissions in a way that helps both profitability and the planet,” he said.
3. An evolving workforce
As the maritime industry continues to adapt in an age of digitalisation, technologies like Artificial Intelligence, Internet of Things, and big data are transforming work processes and businesses. The demand for tech-related skills, as a result, is on the rise.
“And as the maritime industry continues to transform, skillsets in areas from diverse fields from technology to sustainability will be needed,” Singapore Maritime Foundation Executive Director Tan Beng Tee said in a recent article.
“Depending on what job one is looking for, there may be some where a background in maritime will become less a pre-requisite and more on-the-job learning can fill the industry knowledge gap.”
To this end, reskilling and upskilling will also be key. Beyond seafaring, Maritime Singapore has through the years grown into a global hub for maritime companies, housing a well-rounded ecosystem of professional services such as legal, arbitration, finance, insurance, chartering, shipbroking, among others – all of which are critical in supporting the maritime industry as a whole. The Republic retained its overall No.1 spot as the world’s top maritime city in Menon Economics’ biannual Leading Maritime Capitals report this year.
4. Brace for uncertaintyOcean Network Express (ONE) Chief Executive Jeremy Nixon believes that “the economic isolation of Russia and resulting energy shock, combined with steady global recovery (from COVID-19) are likely to be the two counter prevailing economic drivers in 2022”.
The big question mark lies in the demand side. “For the past two years, this has been hard to predict because of COVID-19. Now it is hard to predict because of geopolitical forces which are putting into question the supply and price of commodities,” added Mr Sohmen-Pao.
But even as 2022 is likely to be characterised by a high level of uncertainty, he added that it “should not stop us working on the long-term goal of decarbonising our industry”.
Rashpal Bhatti, Andreas Sohmen-Pao, and Jeremy Nixon are speaking at the SMW Leaders’ Perspectives on Day 1 of Singapore Maritime Week this year, which gathers a stellar panel of C-suite industry representatives to share their insights on environmental sustainability, finance, and talent in an era fuelled by change.