Seven global trends on the radar for shipping

Sensemaking / Seven global trends on the radar for shipping

How do you keep on course when the context is in flux? Ask a seafarer.

By Futures Centre / 05 Feb 2015

It’s the sector for which binoculars were created, and so little wonder some long-sighted leaders in shipping are looking as far out as 2040. The Sustainable Shipping Initiative has set out a vision for the sector 25 years from now, and a detailed map for the journey, which includes:

  • changing to a diverse mix of energy sources  
  • providing safe, healthy and secure work environments so that people can enjoy rewarding careers and achieve their full potential 
  • becoming a trusted and responsible partner in the communities where shipping professionals live, work and operate
  • developing financial solutions that reward sustainable performance and enable large-scale uptake of innovation, technology, design and operational efficiencies
  • enhancing performance and decision-making through transparency and accountability 
  • proactively contributing to the responsible governance of the oceans. 

 

Keeping on track to such targets over a long period means keeping up to date with a rapidly changing context. Small changes on the horizon today could add up to a very different future. 

Here are seven global trends that the SSI will be tracking. They are asking how each of these could affect the future of shipping – but also, crucially, what the implications will be as the various tracks converge, and how to prepare for complex outfalls. 


1. The global economy

Developing nations are growing in influence and economic activity. Rapidly growing middle classes are driving increasing demand from these nations, which will disrupt market and trade dynamics. There’s also a dramatic change in the conversation around oil and its impact on the global economy. Weakening demand for oil and gas will have a ripple effect on different players in the shipping industry: liner companies will benefit initially from lower prices, but shipyards building specialist offshore equipment for the oil and gas industry may suffer. 

 

2.  Ocean governance

The oceans are shared spaces, where questions of responsibility and regulation come up against the conflicting agendas of various global alliances and nation states. New areas of concern are rising up the agenda, and bringing the need for collaborative governance to the fore – from seabed mining and noise pollution to autonomous vessels and workers’ rights. Add to this the increasingly felt impacts of climate change, and the crucial role of the oceans and marine life in maintaining the Earth’s ecosystems. There are also likely to be particular challenges surrounding the governance of new navigation routes and seabed mining sites now accessible due to reduced polar sea ice.


3. Demand for transparency

The relative invisibility of the maritime industry and its role in our daily lives (most notably our supply chains) is often lamented. But this is changing and will continue to change dramatically. With the rise of social media and data availability throughout the supply chain, shipping is ever more subject to scrutiny. Questions will need to be answered as retailers move towards full supply chain transparency. Monitoring and tracking technology is already exposing data on the behaviour of fishing vessels. Widespread deployment of cheap, connected sensors is also giving hints of a future marine Internet of Things. At sea no longer means unseen. 


4. The future of energy

The energy landscape is changing. On land, more countries are reaching grid parity for renewable energy sources – notably solar and wind. Alternative fuels are maturing: overcoming early obstacles such as sustainable supply to demonstrate their mainstream potential. Energy efficiency is attracting new interest, as nanomaterials open up new potential. The prospect of resource constraints, tightening environmental regulations and consumer pressure from increasingly transparent supply chains are pushing ship operators to choose vessels with a smaller environmental impact. This trend will increase the demand for vessels that run on more cleanly burning fuels, including liquid natural gas (LNG) and drop-in marine biofuels that can be blended with existing liquid fuels.


5. Sustainability regulation

Regulations that protect the environment will continue to be a significant reality of the shipping industry. Some regulations will become more stringent in the coming years, while others are still in development and their potential design and impact are less certain. Already, conventions around pollution standards have been ratified, and carbon-based regulations look set to be in place in the next three to five years. 


6. Advancing technology

A number of technologies are becoming available to reduce costs, improve efficiency and increase flexibility in shipping, as well as to help meet the requirements of future regulations. These include new lightweight and self-healing materials, new distributed production methods, and connectivity at sea. The rapid growth and adoption of 3D printing is already having an impact, with the US navy drawing on it for on-board maintenance. Measures to enhance energy efficiency will be crucial to meeting regulations.  


7. Adapting to climate change

We are currently on an emissions pathway consistent with the ‘worst case’ scenario from the Intergovernmental Panel on Climate Change, which forecasts a possible global average temperature rise of 1.5 degrees by 2040. The impacts for the shipping industry will be significant and widespread, including sea level rise, the opening of new shipping lanes due to melting ice caps, and changing global trade patterns. Adaptation measures range from better forecasting of extreme events to improving the resilience of infrastructure; for instance, higher sea walls and new tanker designs are being explored to deal with increased wave heights.

 

By tracking these trends and monitoring signals of change, the SSI stands a better chance of spotting windows of opportunity for intervention, innovation and leadership – rather than finding itself off-course.  


Image credit: Mads Pihl / Destination Arctic Circle

 

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