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5 Key Things to Expect in the Shipping and Maritime Industry in Commodity Trading in the Next 12 Months

todayFebruary 20, 2023

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5 Key Things to Expect in the Shipping and Maritime Industry in Commodity Trading in the Next 12 Months

As the shipping and maritime industry undergoes a major transformation fueled by technological advancements and changing market dynamics, staying ahead of the curve is crucial for success in the commodity trading sector. The next 12 months hold immense potential for growth and innovation, with the spotlight shining on digitalisation, sustainability, and talent development. 

To help you navigate these exciting times, we're taking a deep dive into the top five trends that are set to disrupt the shipping and maritime industry in commodity trading. From real-life examples of companies leading the charge to expert insights, this blog post is your comprehensive guide to the future of this dynamic and ever-evolving sector. 

Get ready to stay ahead of the game and seize the opportunities of tomorrow, as we explore the key things to expect in the shipping and maritime industry in the coming year.

Shipping and Maritime Services in High Demand:

With the ongoing recovery from the pandemic, there is a looming surge in demand for shipping and maritime services. This growth is driven by factors such as heightened consumer needs, the transportation of resources and goods, an uptick in global trade, and meeting the demands of various industries and businesses worldwide.

Recent industry reports align with this trend. The United Nations Conference on Trade and Development predicts a 4% increase in global seaborne trade volume in 2022, following a slowdown caused by COVID-19. This upsurge will be fueled by a combination of factors, including the revitalisation of international trade, growing consumer demand, and the revival of major economies.

One notable demonstration of this trend is the performance of shipping giant Maersk. In the final quarter of 2021, the company experienced a surge in demand for its services, driven by a boost in trade activity and heightened consumer needs. Maersk's CEO, Søren Skou, stated the company is “well positioned to capture the growth opportunities in the market,” highlighting the growing demand for shipping and maritime services in the industry.

Investing in Innovation and Research:

Investing in innovation and research is critical for the continued growth and success of the maritime industry. The top 1,000 innovative companies in the world spent $782 billion on research and development in 2020, representing a 10% year-on-year increase, according to a study by PricewaterhouseCoopers (PwC). 

Additionally, the Global Innovation Index 2021 found that investment in research and development is positively correlated with economic growth and social development. Specifically, the index found that research and development (R&D) spending in the world's most innovative economies accounted for 2.2% of gross domestic product (GDP) on average, while less innovative countries invested less than 1% of GDP in R&D. These statistics highlight the importance of investing in innovation for companies and economies to stay competitive and drive progress. 

The Organization for Economic Co-operation and Development (OECD) also emphasises the significance of innovation in the maritime sector, as such investments can lead to increased productivity, efficiency, and sustainability. For example, blockchain technology can improve transparency, security, and efficiency in supply chain management, cargo tracking, and digital documentation. CargoX is a blockchain-based platform that digitises bills of lading, a key shipping document, to streamline and automate the cargo shipping process. The platform enables secure sharing of data between different parties involved in the shipment, including exporters, importers, banks, and insurers, reducing the risk of fraud, errors, and delays in the shipping process.

Additionally, the development of new materials, such as lightweight composites and self-healing coatings, can enhance fuel efficiency and reduce maintenance costs for ships. Companies such as Badische Anilin und Soda Fabrik (BASF) are investing in research and development to bring these technologies to the market. One example of a new material technology that BASF is developing is a lightweight composite material that can be used in shipbuilding. The material is strong and durable, making it a promising alternative to traditional materials like steel or aluminium. 

Nurturing a Talented and Adaptable Workforce:

The shipping and maritime industry is in the midst of transformation, with new market dynamics, technology advancements, and customer demands creating a need for professionals who are equipped to adapt and thrive in this ever-evolving landscape. This requires a focused investment in talent development, to ensure that the industry has the human capital it needs to seize new opportunities and overcome challenges.

Recognising this, shipping and maritime companies are taking steps to build a more diverse and highly-skilled workforce. Initiatives like the Women's International Shipping & Trading Association's (WISTA) mentoring programs, which aim to support the career development of women in the industry, and companies like Compagnie Maritime d'Affrètement (CMA) – Compagnie Générale Maritime’s (CGM) leadership development programs demonstrate a commitment to developing the next generation of industry professionals

This emphasis on talent and workforce development is reflected in the industry statistics as well. The International Chamber of Shipping projects that the industry will need to recruit 90,000 new professionals annually until 2040, to keep pace with growing industry demands.

Nurturing a talented and adaptable workforce is an imperative for the shipping and maritime industry, as it strives to maintain its competitive edge in an ever-evolving landscape. By investing in the skills and capabilities of its employees, the industry can ensure its continued growth and success in the years ahead.

Prioritising Sustainability and Environmental Stewardship:

As the shipping and maritime industry shifts towards a more sustainable and environmentally responsible future, it's imperative to address the impact it has on the planet. The industry, facing the demands of customers, stakeholders, and regulators, is taking the responsibility of reducing its carbon footprint seriously.

Statistics from the International Maritime Organization (IMO) reveal the extent of the challenge, with shipping emissions contributing to a staggering 2.2% of global greenhouse gas emissions in 2018. To tackle this issue, many companies in the sector are implementing measures to improve sustainability and reduce their environmental impact, such as investing in more fuel-efficient vessels and technologies, and implementing waste reduction initiatives.

A prime example of this trend can be seen in the Global Maritime Forum's Getting to Zero Coalition, which brings together more than 130 companies and organisations committed to decarbonizing the shipping industry. The coalition's goal is to achieve zero greenhouse gas emissions from shipping by 2050, and members are taking concrete steps such as investing in research and development of zero-emission fuels and technologies.

Over the next 12 months, sustainability and environmental responsibility will remain a critical focus for the shipping and maritime industry as it strives to reduce its impact on the planet and fulfil its obligation as a responsible corporate citizen.

Embracing the Power of Digitalisation:

As the shipping and maritime industry faces new challenges and opportunities, the need to embrace digital transformation and leverage technology to drive growth has become paramount. With the potential to increase efficiency, reduce costs, and enhance the customer experience, investment in digital infrastructure is a critical component of this transformation.

Recent research highlights the industry's recognition of the importance of this trend, with the majority of companies recognising the essential role that digital infrastructure plays in their success. DP World, a global ports and logistics company, has been actively investing in technology and digitalization to improve its operations and maintain a competitive edge in the industry. The company has launched various initiatives aimed at enhancing its operational efficiency, productivity, and customer experience through the use of advanced technologies.

For example, DP World has implemented a Terminal Operating System (TOS) that leverages data analytics and artificial intelligence to optimise container movement and reduce waiting times for trucks and ships. The TOS also provides real-time visibility of container movements, enabling DP World to identify bottlenecks and streamline its operations.

The shipping and maritime industry is undergoing significant changes, with investment in digital infrastructure becoming an increasingly critical component of this transformation. According to a report by McKinsey & Company, digitalisation has the potential to create up to $270 billion (approximately £196 billion) in value for the shipping industry by 2030. This is echoed by a survey by Det Norske Veritas Germanischer Lloyd (DNV GL), which revealed that 83% of respondents in the sector believe digitalisation can positively impact their business.

Another example of digital transformation in the shipping and maritime industry is the use of autonomous ships. For instance, the Norwegian company Yara has developed an autonomous electric container ship that will transport fertiliser between ports in Norway. This ship is expected to reduce emissions and improve efficiency by reducing the reliance on diesel-powered trucks for transportation. With this vessel, Yara will reduce diesel-powered truck haulage by 40,000 journeys a year. The use of autonomous ships can also enhance safety and reduce the risk of accidents at sea.

As the shipping and maritime industry in commodity trading enters a new era of innovation and progress, it's clear that the companies that embrace change and embrace these key trends will be the ones that thrive in the years to come. With digitalisation at the forefront, a commitment to sustainability and environmental responsibility, and an emphasis on talent and workforce development, the opportunities for growth and success are limitless. 

Businesses in the shipping and maritime industry need to stay attuned to the latest trends to capitalise on new opportunities and overcome challenges. With this outlook, the future of the industry in commodity trading looks bright, with limitless potential for progress and growth. Embracing change and being at the forefront of industry transformation will enable companies to shape their success in the years to come.

To hear more about the shipping industry, make sure you register for Commodity Trading Week London, where we will have a dedicated conference on Shipping and Maritime, Register now to secure your place. 

We are also hosting our Commodity Trading Week Americas in June, taking place in Chicago, where you can also find specialist sessions on Shipping and Logistics, featuring many key industry leaders giving their valuable insights. Register now to secure your place.

Written by: Commodities People


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