10 key long term trends in the maritime business

10 key long term trends in the maritime business

Geneva/ Paris, 1 December 2016, [email protected]

► Demand

► Supply

► Markets

► The Future

1: Geography of trade


Old Scenario: Developing countries exported large volumes of raw materials and imported high value (low volume) manufactured goods


Today’s Scenario: Developing countries participate in globalized production. They also import raw materials and also export manufactured goods

2: Maritime trade is part of globalized production

► More trade in intermediate goods (40%)

► More intra-company trade

► More door-to-door services

► Logistics is part of the production process

World trade by stage of processing

Source: UNCTAD, Key Trends in International Merchandise Trade, 2015

3: Containerization

(Bernhofen et al, 2013)

Demand

► Supply

► Markets

► The Future

8. Insurance services (P&I)

10. Container terminal operators

9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation

4: Globalized production of "maritime transport"

Example: “Hoffmann Shipping”: ►Owner: German ►Flag: Antigua and Barbuda ►Freight agent: Netherlands ►Seafarers: Poland ►Crewing agent: Cyprus ►Cargo: Turkey ► to Canada ►Fuel: Spain ►Insurance: United Kingdom ►Shipyard: Portugal

►Captains’ favourite drink: Ireland



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation




9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


Korea and China 70% of GT



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


Greece, Japan: 29%



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


Panama, Liberia, Marshall Islands:

41%



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation (container

ships)


Denmark and Switzerland

30%



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


India, Bangladesh,

China, Pakistan 92%



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


Financial and other services:

UK, Scandinavia



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


Philippines, Indonesia, …



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


Hong Kong, Netherlands,

Singapore, UAE: ~ 30%

UNCTAD Maritime Country Profiles

stats.unctad.org/MARITIME

Greece

Liberia

Republic of Korea

Viet Nam

UNCTAD Maritime Country Profiles

stats.unctad.org/MARITIME



9. Seafarers

6. Financing

7. Classification

1. Building

5. Scrapping

2. Owning

3. Registration

4. Operation


5: Industry consolidation (the other side of the same coin)

►As countries specialize…

►Industry

sees a process of concentration

6: Global networks

http://www.mscgva.ch/about_us/routes.html

Networking

Out of 162 x 161 pairs of countries:

How many are connected by direct services?

Source: UNCTAD, based on data from Containerization International

Demand

Supply

► Markets

► The Future

7: Liberalized markets

► Less cargo reservation

► Fewer liner conferences (cartels)

► More private sector participation

8: (somewhat) lower freight costs

UNCTAD, Review of Maritime Transport 2011

Freight costs in % of goods’ value

6

7

8

9

10

11

12

13

Developing Africa 12.3 12.1 10.6

Developing Oceania 11.6 12.0 9.5

Developing America 8.3 8.3 8.2

Developing Asia 8.9 8.4 7.4

Developed economies 7.4 7.3 6.4

1980s 1990s 2000s

9: More volatile freight rates

Today’s container shipping

►Ever larger ships

►Extremely low freight rates

►Idle fleet

Why is this a problem?



►Idle fleet


a) Total logistics costs may actually go up


b) It’s a game: Unless old ships are scrapped, the oversupply will remain, or rather, increase, as carriers build new and larger ships


c) Potential oligopolies in small markets

Global fleet deployment (country averages)



►Idle fleet

Sourc

e:

UN

CTAD

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2016

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Demand

Supply

Markets

► The Future

Demand

Supply

Markets

► The Future G

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Demand

Supply

Markets

► The Future

10: The Future

The future of today is different

Is the growth sustainable?

Where are we heading?

How much bigger can the ships get?

What will we do with our garbage

Building a new island

… out of garbage

How do we deal with changing weather patterns?

How much more can the ports grow?

Will we run out of oil?

Can we beat the pirates?

Will we run out of marine resources?

Will the sea level rise?

What will be the impact of climate change?

What will be the questions

of The Future?

10 key long term trends in maritime supply chains

Geneva / Paris, 1 December 2016, [email protected]

Demand

Supply

Markets

The Future

Questions?

Geneva / Paris, 1 December 2016, [email protected]

10 key long term trends in the maritime business

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