6 challenges that ship owners are facing in 2022

From increased shipping and freight rates to geo-political tensions, we have compiled
a list of the most pressing challenges that ship owners and the maritime industry are facing in 2022.

If the past couple of years taught us anything, it’s that we need to be ready to manage the unexpected.
And that, especially, applies to the maritime shipping industry. The challenges that the COVID pandemic
has brought to the foreground are affecting the whole supply chain, from shippers to consumers.
So, we have compiled a list of the pressing issues that the maritime industry is facing and their effects. It
is important to note that although some of the challenges seem to be stand-alone ones, they are all
interrelated.

1. Increased shipping and freight rates

Since the start of the pandemic, end consumers have significantly increased their online shopping
activity. Shipping companies had to increase their capacity in order to meet the consumers’ demand.
That pushed some companies to build new vessels or refurbish old or unused ones, causing an increase
in their shipping rates. Other than that, and though the industry is starting to recover from the effects of
the pandemic, some ports are still congested as vessels in some US and Asian ports are taking more than
a week to berth. This delay in shipment is causing an increase in freight rate that has never been
witnessed before.

2. Recruitment and retention of shipping crew

According to a UK-based study, the maritime industry covers almost 80% of the world trade, and so a
high demand for human resources follows. However, the sector is experiencing a shortage of
experienced staff, be it on deck or on-shore. Given the effects of the challenging work conditions that
seafarers face as well as the prolonged stays at sea due to COVID, many seafarers are rethinking their
commitment to the trade. These conditions also have a direct effect on the retention of sailors.
Additionally, many workers are nearing their retirement age and there are not enough young workers to
replace them, as the new generation mostly looks down on these jobs. This is why the maritime industry
must employ effective human resource strategies and invest in new technologies that help in the
recruitment and retention of shipping crews.

3. Increasing administrative & regulatory demands

The times have changed and the maritime industry must keep up. Operational complexity of shipping
has been on the rise due to greater regulatory demands, and this calls for more documentation and
reporting than ever before. When shipping internationally, there are certain procedures that ship
operators must be aware of such as custom requirements and berthing procedures of each country.
And amongst other things, a ship operator and the fleet must have the appropriate knowledge and
experience to deal with damaged or lost items during shipping and handling, and be able to deal with
major safety incidents like oil spills. Additionally, operators must keep an eye out for looming economic
crises such as the volatility of exchange rates which directly affects operating costs and profits.

4. Environmental regulations

As governmental and societal pressure to reduce the use of fossil fuels rise, the maritime shipping
industry is trying to adapt. Many shipping companies are attempting to replace fossil fuel with greener
and more sustainable forms of energy. Environmental regulations are pushing ports to disclose their
carbon footprint while maritime organizations across the globe are setting strict emission reduction
targets. In fact, reducing CO2 emissions by 50% in 2050 is the target set for the maritime shipping
industry as it should be complying with the green planet policies that all other sectors and businesses
are following. According to an article by maritimeissues.org certain governments – especially in the
European Union- are offering subsidies that help lower the cost of construction for lower or zero
emission vessels, all while allowing for flexibility in design and application.

5. Automatization

Many shipping companies are implementing new digital technologies in order to increase the scale of
transportation and optimize the existing infrastructure. This allows for an increase in productivity all
while cutting down on costs. For example, shippers and carriers are investing in sophisticated transport
planning systems as a measure to manage the uncertainties that threaten the industry. Another example
of automatization is the port of Rotterdam in the Netherlands, which is now relying on robotic offloading
technology to boost productivity. Some shippers are implementing remote container management to
monitor the temperature and humidity in their containers – especially when transporting goods where
the levels of O2 and CO2 in the containers must remain at a certain level at all times. Digitalization is not
only touching upon the transportation processes but also all kinds of documentation and reporting
processes. However, automatization has its downsides as well because it gives the ability for hackers to
remotely control port operations; and this is a huge challenge when it comes to security.

6. Geo-political tensions

Geopolitical tensions can often cause shipping route delays and disruptions. This is why it is crucial for
ship operators to maximize their knowledge of the risks of their shipping routes and to follow the
necessary security circulars all while constantly monitoring the situation. Not only that but ship
operators need to have the ability to proactively adjust their shipping schedules and routes in order to
avoid the costs associated with storage and re-routing. Another consequence of the current geo-political
tension between Russia and Ukraine is causing a significant increase in the price of fuel oil which directly
affects the cost of shipping.
These are some of the most pressing challenges that the maritime industry is facing and that is why it is
of utmost experience that ship operators and crew alike have the necessary experience and training to
mitigate these problems, with the least losses possible. Shippers are an essential part of the supply chain
and whatever challenges they face will have a ripple effect on the other links of the supply chain, be it on
the terminals, warehouses, trucking companies and end consumers

Leave a Reply

Your email address will not be published. Required fields are marked *