The future of maritime in 2019 – expert insight
29 Nov 2018 - by
Consolidation will continue to be the dominating trend in shipping in 2019 as the industry faces a perfect storm of geopolitical tension, regulatory changes and disruptive technology.
“We are dealing with a nexus of political and global macro-economic risk that leads us into uncharted territory,” Lloyd’s List managing editor Richard Meade said during a webinar on the future of the maritime industry today.
“There are so many exogenous events happening around us – populism, the risk of regulatory chaos, political sanctions imposed and looming, trade embargoes and Brexit to name a few.”
“Shipowners would have to position their businesses to survive and prosper in the midst of all this uncertainty, he said.
“In shipping we have never controlled the market – it’s about controlling costs,” said Meade. “It’s about finding efficiency and scale to deal with the uncertainty in a market where we don’t know what the oil price will be in six weeks’ time.
“We don’t know what will happen with Brexit or the US-China trade war.”
In the end, he believes those with enough scale will survive.
Mark O’Neill, CEO of Columbia Ship Management agrees that the drive toward consolidation, alliances and partnerships will continue to gather momentum. “Companies will be looking for structures that are safer and more resilient to withstand the uncertainty and we will see more of that in 2019.
“Currently barely a day goes past without being notified of some other alliance.”
But ultimately those alliances themselves are not the answer, says O’Neill.
“We see big shipping lines consolidating and still they can’t achieve the scalability. The next stage will see the reshaping of the shipping sector overall and we will see the advent of vertical structures coming in where big logistical companies start trying to iron out wrinkles of uncertainty.
“Shipping will become not a key standalone player but a cog in the chain - but that’s not for 2019 but rather for beyond.”
Survival would require a considerable degree of change in mindset, he added.
“It will require nimbleness and flexibility because you are unable to plan medium or long term.”
And the current position was very different from 2008, he added. “We were considerably better off organisations then than we are now. If we have some of the upsets we forecast for 2019, if Brexit is disorderly for example, we foresee a major recession in the first or second quarter - and what does that mean for shipping?”