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The shipping industry is a well-oiled machinery for moving global trade. To understand its staggering size and impact, one must know what it's transportation market share is. It is estimated that roughly 90% of cargo around the planet is moved on ships. So significant is its contribution to the world, that many do not realise if the shipping industry were to stop suddenly, supermarkets shelves would be empty in 3 days. In comparison if one looks at aviation, air-cargo accounts for less than 1% of the total cargo moved globally.
Without a shadow of doubt, shipping is a key enabler of our current way of life and the globalized world we live in today. The irony is that the average person is unaware of the significance or contribution of the shipping industry and how much we rely on ships working without disruption. Perhaps the industry is to blame for this general lack of awareness. But we have to give credit where it is due, because shipping has operated relatively smoothly and without significant disruption through stock-market booms and busts. This is quite remarkable even though shipping is an extremely diverse and fragmented industry.
- During the early part of the decade when there was glut of ships, big shipowners sat together at an event and angrily complained that owners should stop ordering new ships because the market was already flooded with excess tonnage. Yet the very next day the same owner who bought up the subject, signed a deal with a shipyard for a series of 10 extra-large vessels.
- A few months later with rock bottom freight rates & TCEs, and sky-high fuel prices the CEO of a big company was in tears explaining how the company was haemorrhaging due to astronomical operating costs and historically low earnings.
- In the last few years every time a new regulation comes out, individually companies are screaming their lungs out, saying they have barely recovered from the last recession and cannot afford any further cost of compliance immediately.
- This year many shipowners and managers in their new digital avatars on social media, have privileged us with rants on how crew-change has been an issue for seafarers and how they are struggling to arrange it.
- The taxi service in any part of the world has a minimum rate which covers the cost of operation and includes a minimum profit. Is it so hard for globally operating shipowners to come to consensus with charterers on such a mutually agreed minimum rate for the sustainability of their business and the industry?
- The International Ship and Port Facility Security (ISPS) code was rapidly brought into force after a terrorist attack. The IMO deserves full credit for speed of processing the much-needed regulation. How difficult is it for shipowners to collectively come to a consensus on not to offer their ships to trade in countries that refuse crew shore-leave or crew-change at their ports?
Or will the industry wait for seafarers to take matters into their own hands:https://bit.ly/32vloFq
What other problems and pain points do you think we could solve if the shipping industry came together?
Let me know your thoughts.