The road to recovery in the marine sector
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By Damian Bellairs
The economic devastation wreaked by the outbreak of the Covid-19 pandemic necessitates a study that will look at how private-public partnerships can speed up the recovery of the maritime sector following severe disruptions precipitated by the nationwide lockdowns.
South Africa has an expansive shoreline spanning nearly 3 000 kilometres, which serves as an important trading route for global trade. South Africa’s oceans are responsible for the transportation of around 80% of world trade and, therefore, serve as the life-blood of many national economies.
“The shipping and maritime industry was the hardest hit by the Covid-19 pandemic, and the lockdown regulations that were imposed by many countries further exerted immense pressure on the industry. Considering the strategically important role the shipping and maritime industry plays in the South African economy, it is crucial that concerted efforts should be made by all stakeholders to expedite the recovery of this sector, enhance the value proposition of our ports and grow our share of global trade,” says Jonathan Renecle, Marine Superintendent at Servest.
The global freight and shipping industry accounts for nearly 97% of international trade. The slowdown in demand and cargo volumes at the height of the pandemic resulted in significant reductions in the number of vessels calling, with some ports experiencing a decline in exports because of the closure of destination ports in Asia and Europe. Scenes of vessels lying at anchorage for a longer period than normal due to congestion within the ports became commonplace.
The United Nations Conference on Trade and Development (UNCTAD) predicted that global maritime trade would fall by 4.1% in 2020 because of the unprecedented disruption caused by the Covid-19 pandemic. Now UNCTAD expects that maritime trade will return to positive territory and grow by 4.8% in 2021, if global economic output recovers.
“The revised growth prospects published by UNCTAD should galvanise efforts to speed up the recovery efforts of the maritime industry in South Africa and ensure that the industry does not lag behind. South Africa is well- positioned on the maritime trade route – the country’s ports serve as international hubs for crew changes, a preferred stopover for vessels for bunkering and replenishing provisions, medical evacuations and other husbandry services.
“It is, therefore, important that we should build upon these achievements. The revised growth prospects also highlight the importance of an agile industry to adapt to new ways of working post the Covid-19 pandemic and its willingness to increase digitisation,” added Damian Bellairs, Branch Manager at Servest Marine.
To that end, innovation and digitisation within the maritime sector is key to successfully transition the industry to a post Covid-19 world, however that will look. Bellairs says smart solutions such as autonomous and remote ships with minimal crew, drones, virtual e-learning training programmes and digital certification are some of the interventions that the industry is putting in place to make it more competitive.
The industry is further being required to substantially reduce its carbon footprint. The International Maritime Organisation (IMO) has passed regulations that require shipping companies to use marine fuels that have less than 0.5% sulphur content.
While this is a welcome step towards de-carbonisation, the implementation of these regulations will have unintended consequences of increasing the cost of business, a challenge that the industry is currently contending with.
Rising fuel prices is one major cost-driver in the maritime transportation industry, both on land and sea. Although fuel costs are a variable, they can account for up to 40% of the operating cost for a launch service operation. The shortage of seafarers has also resulted in increased labour costs.
*Bellairs is a Branch Manager at Servest Marine Division
** The views expressed here are not necessarily those of Independent Media.