Date: Wednesday, October 7, 2020
Source: Lloyd's List Intelligence
THE maritime industry faces a global economic crisis in the next decade for which it is woefully underprepared, according to the findings of a survey of shipping leaders.
Respondents to the Global Maritime Issues Monitor 2020 also expressed concern that the pandemic would increase geopolitical tension and drive changes to trading patterns.
It also made it more likely that societal demands for sustainable shipping would grow.
The survey, which was conducted between April 29 and June 8 this year, gained most responses from males (91% of respondents), chief executives (54% by position), those working for shipowners and operators (49% by organisation), and based in Europe (60%).
It was the third consecutive year economic crisis had topped the impact rankings, underlining the interdependent nature of the maritime industry and the global economy.
Environmental issues, which dominated the 2019 survey responses, remained high on the list of concerns, with decarbonisation of shipping again at number 2 in the list.
The timing of the survey meant the impact of pandemics ranked highly and topped the list of issues for which the industry is least prepared.
It ranks 19 issues in terms of three categories: impact, likelihood and preparedness. New environmental regulation and decarbonisation of shipping were added to the list of issues in 2019, with pandemics joining for 2020.
The economic implications of the pandemic lie behind the jump in respondents’ views on the likelihood of global economic crisis, from number 10 in 2019 to number 2.
The same factor lies behind the downgrading of the likelihood of fuel price increases, from number 7 to number 11, as the pandemic has depressed demand.
Respondents showed their concern that the pandemic would increase geopolitical tension and drive changes to trading patterns. It also made it more likely that societal demands for sustainable shipping would grow.
Besides stressing the pandemic’s impact on economic crisis, respondents commented they believed it would escalate conflict between the US and China, increase regionalisation while diminishing dependence on China, and reduce access to finance which might push companies into bankruptcy or encourage consolidation.
While a recurrence of pandemics ranked low in the list of events most likely to happen, the report’s authors expressed caution.
“Respondents placed pandemics third for impact, and at the bottom for preparedness. On likelihood, although it ranked as likely to occur, it sits in tenth place compared to other issues,” it said.
“The middle-of-the-pack ranking for likelihood should flash a warning, some experts said, adding that it is critical for the maritime industry to learn from [the pandemic].”
Professor Ian Goldin of the University of Oxford commented that there is a significant risk of another pandemic. “The root causes of the current pandemic have not been stopped,” he said. “Far from the World Health Organization and other organisations that are vital to stopping future pandemics being reinforced, they are being undermined.”
The Maritime Issues Monitor was released by the Global Maritime Forum together with Marsh JLT Specialty, and the International Union of Marine Insurance.