They say that the only thing that doesn’t change is change itself. The only way to survive is to adapt. How businesses adapt to changes in a global economy determines who will be left standing when the dust settles. It happens in every industry, from banking to building, and the marine industry is no exception.
BATTLING GLOBAL CHALLENGES
The shipping industry has enjoyed steady growth since 2008, regardless of the global recession, growing at over 8% in 2010, before peaking in 2012. The marine industry seemed a safe bet for years to come as operators added capacity and updated fleets in parallel to growing customer demand. This expansion, at the peak, led to widespread overcapacity in an industry which is now also battling a downturn in global trade and a decline in commodity prices, all of which is resulting in fierce competition within the shipping market. The Baltic Dry Index fell below 400 at the start of this year, compared with 4,000 in 2010. This drop is almost as dramatic as the price of oil, which has dropped to below US$30 a barrel. The competition is also being intensified by new players in the market. While Europe still dominates as a shipowning region, with close to 45% of the world’s fleet, the Asia-Pacific is boosting its investment. In 2015, its share of the global vessel fleet grew from just over 30%, to 40%.
The impact of the economic slowdown will reverberate across the marine industry and is creating a clear need to manage costs – optimising operations for vessel operators, and constructing more efficient vessels at prices which are sustainable…