Owing to the rise of emerging countries, new consumer classes, and high resource demand, the marine industry is set to experience the impact of several trends and challenges. The central question is what it will be like? Will it be an industry with multiple players or will it be consolidated? Several key trends in Marine industry will impact the operations, but I believe the future of the marine industry will depend on triangular interactions between people, economies and natural resources.
- The world will continue its current growth momentum with some booms and busts over the next twenty years.
- A shift to concern over resource limitation and environmental degradation will see a desire for a more sustainable world being developed and equality in wealth distribution. Governments will find common ground and accelerated economic growth, within a framework of sustainable development, which will follow.
- States act in their own national interest. There will be little effort to forge agreement amongst governments for sustainable development and international norms. This is a self-interest and zero-sum world with a likely rise in protectionism and slower economic growth.
Marine industry - Trends to impact in 2018
- Increase in usage of megaships: New megaships keep outsizing older models, while emerging technologies boost efficiency and the sustainable image of the marine industry. Ships have been getting bigger and better over the past few years and this seems to be a continuing trend. Every year new plans are created to outsize the currently available megaships and apparently the sky is the limit. This trend is largely a result of containerization and automation which enables the faster loading and discharging of vessels.
2. Long-term demographic shifts: Shifts in global demographics and population growth rates, coupled with long-term economic growth in developing markets, will have implications for the maritime sector over the course of the next decade. One consequence for the maritime sector is a rise in consumer spending in developing markets. It will generate long-term growth opportunities for container ships. However, larger container ships will require investment in ports, infrastructure, technology, and services to ensure that the flow of business remains efficient.
3. Growing acceptance and need for hybrid solutions: Innovations are made each day that reduce the environmental footprint of ships. We can also see a growth in both an acceptance and a need for hybrid solutions. The large interest is connected to current as well as future emission legislation, but also to the public sentiment for more ‘clean’ solutions. Hybrid solutions are not only friendlier towards the environment, but in many cases also contribute to lower fuel costs as well as reduced fuel consumption. Improvements to the engines, better propeller performance, and high-tech coatings, as well as friction-reducing air cushions and even skysails, are reducing carbon and sulfur emissions. These advancements are only the start, as further specialized methods are pushing the maritime industry towards a green and environmentally friendly era.
4. Commodity prices: With most of the developing world in a slowdown, prices for coal, iron ore, and crude oil are all likely to remain depressed for the next few years. For most shippers, the 5-10 years of slow growth ahead translates into depressed rates for shipping, particularly dry bulk shipping, leaving little room to reduce capacity. Although lower prices will spur more oil consumption in the short term, the link between economic growth and oil demand will weaken as the world adopts alternatives to hydrocarbon fuels and enhances vehicle fuel efficiency.
5. Digitization: The increased availability of shipping data and advances in Big Data analytics is providing shippers with greater visibility into market and pricing trends and is helping minimize the dramatic boom-and-bust cycles that have traditionally plagued the industry. The availability of such data-driven analytics improves tactical decisions, allowing decisionmakers to choose optimal routes, weather conditions, fuel consumption, and piracy risk. it will allow players to act in ways that mitigate their risks and transform many of their challenges into opportunities.
With several positive trends, the marine industry will still face concerns about the renewable fuel standard, access issues, and government regulations. In addition, new innovations cannot be noticed from last few years due to minimal requirements from ship operators/owners and there has not been any special application beyond offshore, tankers/containers, cargo, fishing, passenger transport like cruise and yacht, and defense. At some point, the industry needs to market to new customers. Without this, the industry’s growth will hit a ceiling. The industry can see growth once the regulatory and legislative issues are resolved.