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Gazing Into The 2019 Crystal Ball- Part 1

Gazing into the 2019 Crystal Ball- Part 1

Happy New Year!  I hope the holidays were kind to you!

With the new year underway, I reached out to learn what some of our industry leaders are seeing in their 2019 crystal balls:

Kirsi Tikka, Executive Vice President and Senior Maritime Advisor, ABS
Shipping’s focus in 2019 will remain fixed firmly on the IMO 2020 regulatory deadline on sulfur limits in marine fuel, and at the same time the industry will start to prepare for the reduction of greenhouse gases from shipping to meet the 2030 and 2050 targets.

These targets are not challenges that we have solutions for at present. We won’t be able to use today’s technology alone to meet tomorrow’s efficiency, air pollution or carbon emission requirements. Instead, it will require new ways of thinking about innovation and collaboration.

Although 2050 may seem far away today, the technology development, adoption and implementation must start well before 2030 to enable the required shifts in technical and logistical solutions.

Don Carroll, VP Group Operations, MTM Management:
What will 2019 bring to the Maritime Industry?  First thought is uncertainty.  Trade wars and tariffs can only hinder growth, trade and shipping.  China and the US have to come to terms.   Is it possible for them to achieve this?

Second is volatility.  The IMO has shown a total disregard for the global economic impact of some of their regulations.  People have rioted in France in 2018 due to intended fuel taxes.  What will they and many other nations do once the 2020 Sulphur regulations take effect?   It is not just ship owners who face higher fuel costs, but globally, so will the trucking industry, airline industry, and private citizens who own automobiles.  All may be paying higher fuel costs due to higher demand for the clean fuels.  This will then raise the costs for all who use these services which in turn will be passed on to consumers.  This will result in price increases for almost all products used by the average consumer worldwide.  The initial stages of this most likely will begin 4th quarter 2019.  Safeguarding the environment is extremely important, but all the mistakes of years passed cannot be fixed “overnight”!  Reasonable structure is needed.

Third, an extreme need by ship owners for rising freight rates.  Charterers have to accept higher freight rates are coming.  Many would drive an owner out of business for a 50 cents per ton freight reduction, and many brokers would assist them by trying to get an additional 50 cents reduction – all the while knowing Owners can’t afford the reductions.  Owners have no choice but to start passing costs for 2020 fuel regulations, ballast water treatment systems, emissions compliance costs, and rising operating costs onto Charterers.  Either they do this, or many will go out of business.

Let me know what you think 2019 will deliver to us!

Keep optimizing,

Carleen

Carleen Lyden Walker
Chief Evolution Officer
SHIPPINGInsight
IMO Maritime Ambassador
+1 203 255 4686 (o)
+1 203 260 0480 (m)   c.walker@shippinginsight.com
www.shippinginsight.com

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