Seatrade-Maritime: Shipping going ‘gangbusters’ but volatility comes at a price

Published by Seatrade-Maritime

London’s 18th Capital Link maritime conference set off at pace with an upbeat CEO of Heidmar Maritime Holdings, Pankaj Khanna, saying the market is great for shipowners.
Owners recognised that they are on an upward economic trajectory in terms of income, but are cautious too, with the view that vessel operators must plan strategically for the future.

Khanna’s light-hearted comment, that the industry is going “gangbusters” was taken as it was meant, but Bimco president Sadan Kaptanoglu reminded the panel and delegates that vessels need seafarers to operate their ships, but the seafarers are paying a price to bring the income owners are enjoying.

Kaptanoglu gave the most sobering statistic of the morning’s conference session: “In the Black Sea over the last four months 23 seafarers have been killed, this is unacceptable.”

Insecurity for crew is in this modern world is unnecessary, but it also has unexpected consequences. This volatility and instability is fuelling inflationary wage pressure for seafarers, according to V. Group CEO René Kofod-Olsen, who said the company has in some cases tripled seafarers’ wages as a consequence of global challenges.

He also cautioned that next year the global market will have a very different complexion due to the significant increases in prices, and that the lack of fertilisers seen this year will impact food supplies next year.

The increase in seafarer remuneration will lead to many of today’s sailors retiring and will in future impact the maritime industry negatively with the challenges the industry faces in recruitment, he added.

Khanna addressed the issue of crewing adding that seafarers will be helped by artificial intelligence that will be a significant aid to future crew, but he added “There is a shortage of competent people ashore too,” and that, he said, is also concerning.

Given the variety of challenges faced by the maritime sector companies must accept that, while trade will continue, “the flow of trade will change” according to Poul Hestbaek, Folk Maritime CEO.

As the exact nature of future challenges facing the industry is unknown, Hestbaek urged that operators must be more agile in their ability to respond to the challenges.

“We are in survival of the fittest mode,” commented Kaptanoglu, “We know volatility is good for shipping, we [shipowners] love this market, but we can’t enjoy it, we need stability and we need the green transition.”

Owners on an earlier panel, on the subject of energy security were keenly aware of the need for flexibility. Navigator Gas CEO Mads Zacho said the company was paying down its debt as a strategic move to be able to respond to whatever comes next.

Panellists were certain that shipping has a major role to play in the future with Nick Potter VP President and CEO of AET quoting data from consultant McKinsey that 96% of the global population relies on energy imports, while also cautioning that 70% of world trade passes though maritime chokepoints.