Pandemic cuts seaborne transportation demand

Container Cargo freight ship Terminal in Hong kong

DNV GL’s Maritime Forecast to 2050 investigates long-term trends but there is no avoiding the impact of COVID-19 on the shipping sector which could see a decrease in demand.

The Maritime Forecast to 2050 aims to assist shipowners in choosing the right fuel and technology options for next-generation ships and it sets out three decarbonisation pathways for shipping

However, it also acknowledges that COVID-19 is having a dramatic effect on economic activities and DNV GL estimates that demand for seaborne transportation will decline by approximately eight per cent in 2020.

For maritime trade, the negative effect of COVID-19 varies between cargo types. We assume a gradual recovery to the previous long-run norm for growth rates in seaborne transportation.

Because manufacturing is typically more affected in an economic downturn than the economy as a whole, seaborne trade of manufactured products and base materials is usually at risk of greatest decline.

The construction of commercial and residential buildings as well as vehicle manufacture will decline by almost a quarter in 2020, so related shipping sectors will be hit hard. Some sectors will rebound to higher than former growth rates after 2020 before settling down later.

“For shipping in general, the wide ranges of uncertainty on energy prices, demand growth and regulatory options raise the stakes for a shipowner choosing between options for future-proofing a vessel to remain carbon-robust,” Tore Longva, principal consultant, DNV GL – Maritime, and lead author of the report said.

On decarbonisation the report sets out 30 scenarios to model across three decarbonisation pathways. The pathways are No ambitions, IMO ambitions and Decarbonisation by 2040, where increasing stakeholder pressure on the industry results in IMO adjusting its Initial GHG Strategy to instead target faster and/or greater decarbonization.

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