After a year of record earnings, the maritime industry enters 2022 with high expectations, but several potential risks are waiting around the corner as the speed of the transformations currently happening in this sector intensifies due to high demand for goods in the context of the Pandemic. We have identified some of these risks:
The supply chain crisis remains the most important conditioning factor for global shipping. Freight prices are very high as carriers are still unable to meet world demand for their services. This has ensured big profits for the maritime sector but the trend is not guaranteed as there are high expectations for the sector to solve the bottlenecks throughout 2022, something that doesn’t seem 100 % sure right now.
Growing too much, too fast
The spectacular increase in demand for shipping services has trickled down to the whole maritime sector and it´s linked industries, propelling orders for new vessels, increasing the lifespan of the old ones and a significantyrise in the number of containers per freighter.
Nevertheless, the problem of ordering new ships in the current contexts relies on uncertainty; we don´t know yet if the increased demand is going to be permanent or how long it will last if it is not. Businesses could end up with an excess of capacity. The calls for building bigger freighters also faces criticism as the mere increase in the load/ship ratio experienced last year has overwhelmed port capacity.
Changes in Ports and Storage
Logistics companies have been using ports as cheap and efficient storage areas for the goods the transport. Nevertheless, the collapse of many port areas during 2021 has led to a change in the policies of port authorities in terms of storage capacity, the time the goods can stay and the price they charge to these businesses. The expansión of these areas is already underway but a return to the previous system doesn’t seem clear.
Environmental regulation is increasing
The International Maritime Organization will meet next June in the context of the Marine Environment Protection Committee to review its 2050 plan. In spite of the fact that it was approved in 2018 it is expected to suffer some changes.
The new administration in the White House might also bring regulatory changes as the United States has promised to increase its commitment with the environment, aiming to reduce fossil fuels consumption and improving efficiency in line with the actions taken by the European Union.
Mergers and acquisitions
The concentration trend in the business seems unstoppable. Right now at least two vertical acquisitions are expected in the next few months.
One of these companies is the German DB Schenker, whose seller, the German Government, could ask for a good price in current market conditions. The sector´s giant Maersk, has also explained its expansion plan, with 3.6 billions in purchase announcements only in December.