Upcoming Trends in Shipping Industry

8. Upcoming Trends in Shipping Industry

Given the extremely challenging conditions and volatility in the Container Shipping industry since 2020, Shippers were hopeful that there would be some stability in the market in 2022. As events unfolded, there was little to cheer about as uncertainty continued and indeed increased with new debilitating events such as the Russia-Ukraine crisis and the resurgence of Covid cases in China.

As the world continues to adapt to the uncertainty of living through a pandemic, the maritime industry was one of many to be disrupted by the pandemic. Since then, it has seen the industry pivot and deals with the challenges it presents, but we still needed to be prepared for the challenges that would arise in 2022.

As we enter the second quarter of 2022, it is crucial to understand the most important freight transport trends affecting the logistics industry. Understanding market trends is one of the best strategies to keep you ahead of your competitors and help you gain and retain customers.

How will the maritime and logistics industry change in 2022?

When we talk about shipping and logistics, ultimately, we’re talking about the supply chain, and like any other chain, their interconnections are interconnected, making their futures interdependent. The main problems still to be faced in 2022 stem from the pandemic but are intertwined.

In 2022, there are still three main issues to worry about, these are the rise in shipping and container prices, port congestion and waiting times, and a lack of staff.

Congestions in major ports (such as those on the West Coast or China) are expected to dilute in the coming months, but this is largely due to Covid outbreaks and measures to quarantine these areas. Waiting times have proliferated around the world, but now California is experiencing the worst of it while having a lot of trouble in the ports of Los Angeles and Long Beach, with ships changing their course and docking at East coast ports instead.

And the last triangle: the workers. The shortage of personnel has become more and more frequent, causing difficulties in the correct operation of ports, terminals, warehouses, and much more. Not only is there a shortage of professional truck drivers or logistics operators, but there is a growing need for new profiles focused on digitalization, automation, and new technologies that will adapt to the future of the industry.

Shipping Trends That We Are Likely to See in Future

  1. The rise of automation

There has been a rapid transition to a more digital and automated world as the industry adapts and finds new ways to keep commerce flowing as efficiently as possible. While several digital innovations and solutions have emerged to adhere to COVID health and safety protocols, they have also helped to increase competitiveness and improve overall operational efficiency. Digitization and the transition to automation have driven the industry towards achieving the target of zero emissions by 2050.

Countless ports around the world have adopted smart technologies to reduce costs and do less while getting more. An example of one of the ports leading this load is the Dutch Port in Rotterdam with the application of robotic unloading technology. This automated method has seen increased productivity and speed to make the process as smooth as possible.

  • Congestion in Ports

One of the contributing factors behind the disrupted transport chains was the unprecedented levels of intensity affecting major ports around the world. While the focus was primarily on US West Coast ports, most major ports on the US East Coast and Europe were also affected.

Considering the congestion levels in the first 3 months of 2022, as well as the voyage schedules published by Container Carriers, it seems unlikely that any reduction in congestion levels will occur in 2022.

  • Digitization and Automation

While the maritime industry is not usually one of the main movers when it comes to the adoption of new and innovative technologies, the unpredictability and chaos caused by the successive black swan events over the past 2 years have contributed significantly to the complexity of planning. The transportation and shipping process for both Carriers and Shippers has forced Carriers to consider investing in complex transportation planning systems and placing greater emphasis on digitization and automation of internal processes.

The biggest players in the industry have been exploring Blockchain technology and the growing use of Big Data, AI, and ML for several years, and market leaders have even formed a partnership to adopt these technologies to the maritime industry.

  • Shipping Costs

Although we’ve seen a decline in sea freight rates over the past few months, rates are still almost 10 times the pre-pandemic level. Also, production in China has come to a standstill with the Chinese New Year holidays. This makes it very difficult to predict whether rates will return to normal. According to economists from Goldman Sachs, the demand and supply balance of the container market will be stable until at least mid-2022. In addition, container shipping prices are expected to decrease by at least 30% in the coming months.

  • Renewed focus on sustainability

Following the COP26 summit in Glasgow, the shipping industry is making environmental sustainability one of its top priorities. For example, Maersk is ready to operate the first carbon-neutral vessel next year. In addition, shipping lines are considering adjustments to change the fuel mix to reduce operational carbon. A few shipping lines are even working on the creation of wind-powered vessels to eliminate the use of carbon in the container shipping industry

Conclusion

In these foreign and uncertain years brought by the pandemic, the logistics and transportation sectors have changed and we know that they will continue to change, this is inevitable. But with that airflow and a keen eye, it can adapt and transform over time to cushion the blow as best as possible. Time will tell which of these trends and expectations will materialize, but we hope to continue talking about the industry, the changes, and what awaits us.

Amrin Ahmed

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