Commercial shipping is going through a tough phase due to slow growth, geographical events and over capacity, according to N Krishna Kumar, Vice-President, Mediterranean Shipping Company (India).
Students, who plan to pursue a career in maritime sector, need to be aware of the changes , he said at “Encore-August 2017 - International Conference on Commercial Shipping - Changes and Challenges”, a conference organised by Amet Business School in collaboration with Regional Maritime University, Republic of Ghana. BusinessLine was the event’s media partner. Kumar said global container trade sank by 5.4 per cent in the fourth quarter of 2015 after 4.5 per cent growth per annum during 2010-2014.
Slow growthFor the first time in history, container demand growth lagged behind GDP growth. Also, the fleet growth of 8.6 per cent in 2015 compounded the existing problem of low demand.
Shipping lines countered the challenge by slow streaming, idling, limiting new building orders and increasing scrapping. However, the combination of excess supply and low global demand led to continued deterioration of freight levels, he said.
On challenges impacting growth in India, Kumar said poor last mile connectivity and infrastructure creates congestion. While terminals inside the ports are of global standards, the situation outside the port is very poor. Cabotage law needs a re-look and high port costs makes port investment unattractive, he said. Issues relating to ballast water management, use of clean fuel and ship recycle are some of the issues being faced by the shipping industry, said Bart De Groof, Consul General of Belgium.
Piracy issuePiracy is also a major challenge affecting the shipping industry. It poses a threat in West Africa, and in regions between Malaysia and the Philippines, he said.
G Thiruvasagam, Vice-Chancellor, Amet University, said political uncertainty, low cargo freight, over capacity, piracy, demand for reducing emission and exploring new cost savings are challenges that the industry faces.