This year will be remembered as an annus horribilis — a year that started with relatively positive omens for seaborne trade and ended completely messed up as a result of a global pandemic, the repercussions of which no one could foresee.
Covid-19 has caused numerous disruptions in the daily operations of vessels and it weakened demand to unprecedented low levels. However, what it did most glaringly was to expose — once more — how incapable the various regulating bodies were to coordinate in addressing a crisis.
After a year like no other, TradeWinds asked 40 shipping industry stakeholders what they see for 2021 after a year beset by the coronavirus, and how the pandemic will shape shipping's future.
The lack of respect shown to the world’s seafarers by all parties involved — be it governments, traders or charterers — is a sad testimony that the industry has fallen foul of its own aspirations.
The transition to the new IMO 2020-compliant fuels proved to be much smoother and uneventful than originally anticipated.
Once more, the industry proved how adaptable it is and defied those crying that we were heading for a disaster. One of the side effects of Covid-19 is that it accelerated the demise of scrubbers, since the steep reduction in demand for fuel oil allowed refineries to boost production and force prices of very low-sulphur fuel oil (VLSFO) to very low levels.
Putting aside the fact that adoption of low-sulphur marine gas oil would carry much more environmental benefits than scrubbers or VLSFO, it must be noted that it is shipowners alone who were called to assume the high transition costs — essentially forcing them to pay a heavy ticket to renew the trading licences of their vessels.
One of the positive aspects of the pandemic is that it accelerated the application of technology and that it enabled all participants to communicate in an efficient, speedy and reliable way. This trend is expected to continue in 2021.
However, we must not reach the point of transferring ashore those responsibilities that must stay on board. Shipping has become what it is thanks to seamanship values and we must preserve them at all costs.
Medical advances in the treatment of the coronavirus will help kick-start the world economy. The speed at which demand recovers will largely dictate how freight rates evolve. We are at a rare point in time where the newbuilding orderbook is at a historic low point, so the omens for 2021 are quite positive.
