Good news for the maritime industry in 2020?

On Behalf of | Sep 10, 2020 | Maritime Law |

By most accounts 2020 has been a rough and stormy year for the maritime industry. Falling oil prices have played a major part, along with a global health crisis. As many are losing their jobs, it’s easy to feel like everything’s going the wrong direction. Still, amid all this turbulence, there are still some very good reasons to remain hopeful.

Two of these reasons have recently seen a bit more press, and it’s worth wondering if they might show us anything about the industry’s future. On the one hand, we have recent reports that shipping losses have hit a record low. On the other hand, we have continued growth in offshore wind.

Shipping losses dropped dramatically

One bit of good news was the recent release of a report by the insurance giant Allianz, who reported that 2019 saw a 20% drop in ship losses from 2018. In the past decade, the industry has seen a 70% reduction in annual ship losses.

Naturally, Allianz is interested in this data for what they say about the industry’s risks and profitability. However, the data suggest some promising trends in ship safety, even while the point out several places the industry can still improve:

  • Despite the reduction in total losses, smaller incidents are on the rise
  • Car carriers and roll-on/roll-off ships have been among the most troublesome
  • 2019 saw nearly 200 reported fires onboard active vessels
  • Shipping companies may struggle to safely meet emissions standards
  • The industry needs to make use of new technology without becoming overly reliant on it

Notably, the report focused on the numbers for 2019. Given how strange and difficult 2020 has been for so many people, those numbers may seem like they’re a lifetime away. However, they represent the industry’s most recent data.

Finally, the report noted that shipping conditions are not even across the globe. The industry saw more than a quarter of all ship losses in the region near South China, Indochina, Indonesia and the Philippines. The Gulf of Mexico was rated the third most hazardous region.

Offshore wind farms are on the rise

The oil and gas industry may be suffering right now, but people haven’t given up on energy. In many cases, they’ve simply started looking for other sources. And the people building offshore wind farms are among the greatest beneficiaries of this refocusing.

This owes largely due to technological advances that have reduced the associated costs. As one person wrote in a convenient summary of the Department of Energy’s most recent report, the cost of offshore wind energy in 2019 dropped by 30% from the previous year. That goes a long way toward making offshore wind a more competitive energy source.

It also means that U.S. numbers are better lining up with European numbers. This is notable because Science Direct reports that the European market for offshore wind has grown an average of 36.1% every year since 2001.

Can existing companies adapt to the changing market?

The reduction in ship losses and increases in offshore wind are undoubtedly good news. However, it’s unclear how they may impact the larger maritime industry. For some, they may mean safer sailing and new job opportunities, but they may affect others in the industry differently. For example, the rise of offshore wind may place greater financial strain upon offshore oil, potentially leading to even more risky decisions made to cut costs.

Still, both pieces of news highlight the demand for skilled workers. Ship safety depends on trained officers and crew. Offshore wind demands skilled workers. The market is changing, but those able to adjust may still be able to push through the choppy waters.