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The shipping industry has experienced a rollercoaster few years of highs
and lows. Things have been gloomy for some, with a marked slowdown in areas
such as Bulk, General Cargo, and Container Ships, which were all hit hard by
the financial crash of 2008. On the other hand, Tankers and LNG are
enjoying a relative boom due to oil price volatility. And on the whole, there
are still around 85,000 large working vessels transporting goods across the
globe.
Koji Sekimizu, Secretary General of the International Maritime
Organisation (IMO) says “The shipping industry is in a difficult situation,
but this is not new and I am sure that the shipping industry will survive. The
reason for this is in the fact that the shipping industry is indispensable to
the world.”
What are the issues affecting dry bulk?
Too many ships
The Chinese boom in ship building since 2005 had made it a very good
time for ship owners able to meet the demand. As a result, many others wanted a
piece of the prosperous dry bulk pie. Due to this, many ships were built
without any commitments from cargo interests to use them. Now, supply of ships
far exceeds demand, meaning there is a surplus of ships in the water (or not,
as many don’t even leave the ship yard after being built), needing to carry
cargo that doesn’t exist, or carrying cargo far more cheaply than they had been
previously. The massive overcapacity in dry bulk has led to ships being
chartered at rates as low as what they were in 2009. And, due to the current
stagnant price for steel, older ships are not being scrapped and replaced by
the new ships, which further adds to the excess capacity.
Reduced exports
Bulk, general cargo and container ships have been further affected by
the aforementioned lack of goods to carry. There is a weak demand for Europe’s
exports, due to hampered purchasing power in Asia. As a result, 2015 was the
first year in a generation where China’s exports and imports actually declined.
This has had a massive effect on the amount of goods that need to be shipped
and the global economy, especially when following what was already a
disappointing Christmas and Chinese New Year lull. Shipping consulting firm
Drewry Maritime Research estimates the container shipping sector faces a
loss of more than $5 billion in 2016. To stabilise the stormy outlook
of the industry, a balance between supply and demand needs to be reached.
How can this be resolved?
It may look bleak at the moment, but the ship hasn’t quite sailed for
the maritime industry. Industry-wide efforts are being made to modernise
procedures. Although the workforce will have to be reduced due to the
oversupply of tonnage, there will always be a need for skilled, committed
seafarers to optimise results. A survey by Platts highlights that most of
the industry players think that the industry will take around a year to recover,
but around half thought that there would be no positive changes for at least
three years.[i]
As Sekimizu states, “the shipping industry is indispensable”- we will always need to
ship things around the world. What steps will be taken to boost its business in
the modern world?
Making the Industry More Appealing To Talent
As outlined above, because excess shipyards have to be shut down and
workforces trimmed, it’s more important than ever that the staff shipping
companies take on are talented and committed sea farers who want to build a
career in the sector.[ii] To show that the industry offers diverse
opportunities, efforts are being made to create offshore jobs for young people,
although cost can make this difficult. Meanwhile, key industry players seem to
have recognised that the future best performers need to be engaged young. The
innovative IMO Maritime Ambassador Scheme promotes the maritime professions
among young generations starting from primary school, and governments are
appointing ambassadors in their own countries with an eye to future export
needs.[iii]
Bringing technology to the forefront
Today, we live in a digital world, and the shipping industry has been
slow to embrace this reality. Collecting data on why ships fail and analysing
their safety and performance will lead to more efficiency and a higher quality
service. We have more and bigger ships (such as the colossal MSC Oliver and its
sister ships, which dominate European and Asian ports). Using big data and new
technologies to drive the sector into the modern digital world is critical,
because this will in turn increase the appeal for young people to build a
career in maritime.
The list here is far from exhaustive, and it has been recognised that
greater global cooperation will make a key difference. Events like the Asia
Pacific Maritime exhibition - the largest such exhibition of the year, which
takes place in March - offers a fantastic opportunity to bring the shipping
industry together and debate how to thrust it into the future. With its slogan
of “People, Ideas, Opportunity”, this is a perfect occasion for networking,
thinking outside the box and developing creative opportunities and ideas.
If you need help hiring individuals with the skills, motivation and
experience to push your business to the next level, CSG’s Maritime Team have an
unparalleled network of global mid-senior level contacts within the sector.
And, with decades of specialist marine recruitment experience behind us, we can
frequently access the high performers that traditional recruitment methods
simply can’t. Shipping is a cyclical industry so it’s critical for shipping
companies to have great, technically skilled and driven people adding value to
every project, so that you can enjoy years of smoother sailing in the future.
Visit our dedicated services page to find out more, or
if you're looking to find a new opportunity within the sector, find out what
we're currently handling here.
[i]
https://worldmaritimenews.com/archives/169671/platts-dry-bulk-market-needs-at-least-3-years-to-recover/
[ii]
http://www.businessgreen.com/bg/news/2448148/sustainable-shipping-initiative-urges-industry-to-embrace-green-policies-and-clean-technologies
[iii]
http://www.imo.org/en/MediaCentre/maritimeambassador/Pages/default.aspx
- See more at: http://www.csgtalent.com/blog/10-are-stormy-seas-ahead-for-the-maritime-industry#sthash.FrQ0JBN7.dpuf