BIMCO looks at challenges ahead

JANUARY 4, 2013 – BIMCO has published Reflections 2013, which it calls "a concise, condensed and thought-provoking analysis of the challenges facing the shipping industry today and during the coming year."

It cautions that while there is some optimism that the worst of the global downturn is now behind us, a perceptive economic analysis outlines the challenges facing the main shipping sectors on account of the excessive supply of ships. The analysis emphasizes the need for a worldwide industry to be regulated globally, calls for pragmatic and practical environmental policies, underlines the need to value, treat fairly and educate the human resources upon which the industry depends and for the maintenance of strong defenses against piracy and lawlessness.

Turning point foreseen

Against the background of a world economy struggling out of the financial crisis, positive global growth of both GDP and world trade at 3.6 percent and 4.5 percent respectively encourages BIMCO to suggest that 2013 will be the turning point in macroeconomic terms. But while such a scenario might normally offer comfort to ship operators, all the main shipping sectors continue to labor under a substantial overhang of tonnage of ships ordered in more optimistic times. Despite slow steaming, layups and the recycling of redundant vessels, it is suggested that any balance between supply and demand will not be swiftly achieved. And while highly efficient "ECO-ships" might appear attractive, they too add to the totality of a remarkably young world fleet. Challenging times, BIMCO forecasts, will continue to face the industry.

Why global regulation matters

Free market access, along with a regulatory "level playing field" for all participants has been a rallying call for BIMCO for more than a century. With effective international regulatory bodies available, says BIMCO, "worrying tendencies toward regional and local regulations, along with a revival of local voices calling for trade protectionism as a result of hard times need to be energetically countered."

Towards greener shipping

The shipping industry is working hard to improve and demonstrate its sustainability in environmental terms. Technical advances and fuel saving measures, along with operational efficiencies show many encouraging trends, although emission controls, such as limits to SO2 emissions, show that regulatory changes are neither easy nor cheap to implement and may produce many unanticipated consequences. Nevertheless, the focus on energy efficiency shows that an environmental agenda need not be viewed in isolation. Reflections 2013 does however illustrate that the complexities of implementing the IMO Ballast Water Convention to its designed timescale at the same time as developing adequate treatment systems may have been overlooked or not adequately addressed.

The essential human element

With 1.3 million seafarers servicing the material needs of the entire world population of 7 billion people, BIMCO emphasises once again our dependence upon a highly professional workforce which deserves rather more recognition than 21st century society often provides. BIMCO, which has catalogued the unfair treatment of seafarers by certain legal regimes, once again points to the ways in which seafarers are unjustly criminalised after accidents and more regularly treated with disrespect by shoreside bureaucracy. The entry into force of the ILO Maritime Labor Convention in August 2013, will, it is hoped, be a further contributor to better and fairer treatment of this essential workforce. Reflections 2013 also emphasizes the value of continuous education for marine industry personnel, with BIMCO enlarging its role with an expanded education program.

Thinking beyond piracy

The fight against piracy needs much more than Best Management Practice or armed protection. A combination of political, economic, legal and diplomatic efforts, possibly supported by military action will, suggests BIMCO, be needed if the problem is to be eradicated.

Practice and pragmatism – and some optimism

In his accompanying message to Reflections 2013, BIMCO President Mr, Yudhishthir Khatau speaks of his confidence that the "worst is behind us" and that there is room for optimism and that the industry outlook remains positive for the coming year, despite the challenge of oversupply of tonnage. Meanwhile, he emphasizes that BIMCO's practical and pragmatic approach in influencing regulators, legislators and politicians really works and that free trade and fairness remain the most important ingredients to enable shipping to fulfil its irreplaceable role as the consistent and predictable servant of world trade and globalization.