It’s not exactly been smooth sailing for the global shipping industry of late. But there are rays of light in this cloudy period and there is ample cause for optimism moving forward. One of the largest reasons for maintaining a bright outlook comes from a recent review that shows the shipping industry saw losses decline in 2015.
Put plainly, while there might be slightly less freight to ship in the short term, more of this freight is getting to its destination, which saves companies from taking losses and keeps prices down for shippers and consumers alike. And while losses are a challenge that all shipping companies must face, there are opportunities to continue the trend and to make the industry on the whole safer and more efficient.
Areas of Growth
The decline in shipping losses is a huge positive for the industry, but there continue to be challenges that must be overcome if the industry is to sustain its long-term growth. Among the largest of these challenges is cybersecurity in relation to freight.
As one official quipped, “The cyber-impact cannot be overstated. The simple fact is you can’t hack a sextant.”
In Southeast Asia, pirates are taking advantages of holes in cybersecurity to target specific cargoes. For the shipping industry, this means the need for security has grown beyond the time spent on the water. While this serves as an ongoing challenge, it also serves as an opportunity, as the companies that face this challenge head-on will have a greater chance of protecting freight and providing better service to customers.
A Big Challenge
Another looming challenge that may also prove to be an opportunity for improvement, in terms of stemming shipping losses, is the way the industry adjusts to the growing fleet of mega ships. In today’s waters, there are relatively few mega ships, and there are even fewer plans for how to handle these ships in the unlikely event that something happens to one of them.
In the short term, there is a lack of resources available for salvage and rescue operations. As these mega ships become a larger portion of the shipping industry, the infrastructure will be built out to help maintain the safety of their massive payloads. This should provide a logistical and financial boon to the industry and its customers.
A third reason to look at the latest reports and see smoother waters ahead for the shipping industry lies near the North Pole. Over the past decade, incidents in the Arctic Circle have increased quickly, including a 29 percent increase from 2014 to 2015.
While on the one hand, this is cause for concern, these losses should abate in the near future as the Polar Code goes into effect in 2017. This code for ships operating in Polar waters will help to bring uniform safety measures to the industry, which should help to keep ships — and freight — safer in years to come.
In the end, the shipping industry must navigate some choppy waters in order to maintain continued success. But with a continuing trend towards declining losses, there is reason to believe that the industry will be able to navigate its way through these challenges.
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