Prepare to say goodbye to everything you thought you knew about shipping – that was the conclusion from the morning session of the TradeWinds Shipowners Forum, held at Posidonia in Athens today.
“Shipping cycles are a thing of the past,” Christopher Wiernicki, chairman of the International Association of Classification Societies (IACS) told delegates.
Henriette Brent-Petersen, managing director of DVB Bank’s shipping and offshore research department, echoed Wiernicki’s thoughts, saying that the industry can no longer use history to predict how shipping sub-sectors will emerge from market downturns.
Brent-Petersen said technological ‘mega-trends’ such as 3D and 4D printing (“with the fourth dimension adding the dimension of time”) and the nearshoring of manufacturing will have a major impact on world trade and on containerised trade by moving production closer to consumers, reducing the necessity of shipping.
“We are in the beginning of a new bout of technological innovation,” she summed up.
Wiernicki said that both technology and regulation will drive shipping’s evolution and shape the future of shipping cycles, with regulation becoming more “parochial” and segregated into national, regional and international jurisdictions.
Macro-economic factors such as declining urbanisation; the aging global population, a wider focus on sustainability and decreasing dependence on fossil fuels will also change demand patterns and make shipping markets more difficult to navigate in the future.
Brent-Petersen noted that China’s investment in infrastructure was valued at around half of its GDP, but this will shrink to around 20% as China’s economy becomes less trade-intensive. “This is a structural change and will significantly affect demand for dry bulk going forward,” she said.
Wiernicki also predicted the earlier obsolescence of vessels, brought about by rapid changes in technology and markets.
This was echoed by Ioannis Martinos, managing director of Signal Maritime, a spin-off of his family’s tanker company Thenamaris. Newbuildings will become more risky for shipowners because of technological innovations, he said.
Owners have made the wrong technical changes in the recent past, such as propulsion systems in LNG carriers, which in certain cases have become outdated by the time the vessel’s construction has been completed, he continued.
It is “difficult to find a technology that will last 20 years,” Martinos said.