Nor-Shipping 2015: Strong headwinds continue to challenge maritime industry

The maritime industry continues to face serious challenges that can partly be tackled by investment in innovation and a stable, co-operative, international regulatory framework.

The message from Nor-Shipping’s opening conference came through loud and clear: the industry as a whole is not yet out of the woods following the global financial crisis of around six years ago.

Improvements are certainly being made in certain sectors — witness the remarkable run in freight rates being experienced by tankers — but there are still key areas of the maritime industry struggling amid a wave of new pressures combining with familiar ones.

The oil price collapse over the past year is hitting the offshore vessel sector hard as demand falls for its services. This comes on top of persistent regulatory issues over ships’ emissions facing shipowners.

Sturla Henriksen, chief executive of the Norwegian Shipowners’ Association, called all this the “roaring noise of the commercial realities facing many of you”.

“A high number of [offshore] vessels are being laid up and an even higher number of people are being laid off,” he said to the packed conference as the week-long maritime showcase kicked off.

Dry bulk shipping continues to struggle along the bottom.

On top of this, global economic growth remains sluggish and uncertain, and the Arab Spring has turned into “the dark pessimism of an Arab Fall”, he said.

Global security for shipping continues to present challenges, despite headway being made by taskforces tackling international piracy.

In addition, the highest number of refugees since the Second World War is crossing the Mediterranean Sea to seek asylum in Europe.

Moreover, Russia continues to face sanctions against its energy industry, and a war-weary US appears to be retreating from its role as the world’s policeman, affecting the geopolitics of the Middle East, the world’s key oil exporter on tankers.

However, the maritime industry can take heart from new business opportunities opening up, and new opportunities for innovation to lead it out of choppy waters.

Liquefied natural gas shipping is one area of innovative expansion, as governments around the world seek greener power industries that are not fired by coal.

Norway’s prime minister Erna Solberg championed innovation as the key to boosting Norway’s role in the maritime industry.

The Norwegian government’s role will be to focus on sustainable growth and “value creation” by establishing a stable and forward-looking regulatory framework, she said.

“The future for Norway lies in being smarter, not cheaper.”

The government’s launch last week of the National Maritime Strategy encompasses these efforts to boost Norway’s position in the global maritime industry.

Ms Solberg said her government will work for a unified global regulatory framework for the maritime industry to make sure Norway can compete in international markets.

LNG crucial

The US Coast Guard’s Admiral Paul Zukunft harked back to LNG, saying it was crucial when it comes to innovation and the future of the maritime industry.

“We need to look no further than LNG,” he said, pointing out that the US sits on 2% of the world’s LNG and the expansion of the Panama Canal next year will allow LNG vessels to haul US cargoes to Asia, slashing voyage times.

Importantly, he believed “there are not enough gas ships in the world that can accommodate the throughput” of LNG from the US.

Some experts say US exports of LNG will require around 150 vessels or more, while others are more sceptical about eventual US cargo volumes.

For more maritime news see Lloyd’s List

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