Industry calls on IMO to bridge fuel price gap
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Fourth industrial revolution means slower trade growth
Peter Sand, chief analyst of BIMCO, the shipowners association, tells Hamburg liner conference container shipping is vulnerable to changes in demand driven by 3D printing and onshore sourcing.
In a key note address at the Global Liner Shipping Conference, held in Hamburg earlier this week, Sand said; “We [the shipping industry] are operating in a ‘new new normal’, a fourth industrial revolution where 3D-printing, cloud computing, digitalisation and big data will impact economic and trade developments and consumer behaviour. Cargo declines in all sectors of the shipping business cannot be ruled out. Things are definitely changing but at the moment it is too early to nail down the reasons for this.”
Addressing prospects in the container shipping sector, the executive argued that 30% of cargo moved in containers was potentially vulnerable to 3D printing technology while near- and onshore sourcing of products by manufacturers would reduce deepsea demand (in terms of TEU-miles) for container shipping services considerably.
He forecast that the GDP to trade growth multiplier in the liner shipping sector would be on a par (1:1) over the next three-four years, compared with an average of 2:1 in the 2000-08 period and over 3:1 in the 1980s and 1990s.
While he pointed to an improved performance in the liner shipping industry’s performance in Q1 2017 and to the positive contribution made from the rise in demolition activity, Sand was less convinced about benefits the new alliances would deliver.
He explained: “Immediate gains are seen in freight rates when supply tightens while benefits from network changes take much longer to come to fruition. You also need to bear in mind that 57% of all demand is from non-east-west trades and, therefore, outside of the main alliances. The cascading of large ships into these markets is causing real problems and 70% vessel utilisation is not good enough to turn the market around.”
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