BIMCO forecasts challenging times in 2012

BIMCO’s just-published Reflections 2012 examines critical issues facing the shipping industry now and in the coming year. The concise but thought-provoking annual analysis considers the challenges facing one of the world’s most essential industries and its principal sectors. It emphasises the need for regulation to be maintained on a global basis, and calls for practical and pragmatic moves on environmental rules On the important human element, it notes the need for fair treatment of seafarers, and when considering the menace of piracy, calls for a new a strategic political approach by governments.

Call for leadership

BIMCO begins its analysis with a call for “daring and decisive political leadership”, especially as it confronts the challenges within the EU and US, with their considerable influence on maritime trade. It points to the need to stimulate domestic demand in Asian nations, despite their own regional difficulties. It forecasts a 4% GDP growth worldwide – similar to that of 2011- but warns about the significant oversupply in shipping tonnage in all three main sectors, with no short term comfort discernable, recommending the traditional remedies of idling and recycling to control this tonnage glut.

Expect the unexpected

While there might be prospects for growth in the product tanker sector, and general help from slow steaming, BIMCO believes that the container sector can look forward to a markedly challenging year with another 50% increase in the number of very large containerships entering service. Nevertheless, owners are urged to learn from past lessons of “expecting the unexpected” with a possibility that India may start to fulfil its import potential during the coming year.

Reject regional rules

On regulations, Reflections 2012 reiterates BIMCO’s demand for a global perspective to prevail, with international ratification of important conventions and a rejection of regional alternatives. There is, moreover, a need for shipowners and shipbuilders to more fully realise their interdependence and to work more closely together on a whole range of issues common to the two industries.

A section on Shipping and the Environment focuses on the further development of the EEDI for new ships built after 1 Jan 2013, this being seen by BIMCO as a significant key to international progress on atmospheric emissions. The organisation once again expresses its scepticism on regional initiatives which would tend to cloud the issues and provide impossible complexities for internationally trading ships. It also hopes to see movement on the important Ballast Management and Recycling Conventions in the coming year.

Treat seafarers fairly

The fair treatment of seafarers, especially those who might become enmeshed in the aftermath of environmental incident, is seen as an important part of the organisation’s human element agenda, when viewed against a trend that clearly identifies the continuing injustices of a presumption of guilt in such cases. BIMCO highlights the growing demand for a better trained and educated industry workforce, which has encouraged the organisation to offer its eLearning diploma programme.

Political will on piracy

On the continuing issue of piracy, Reflections 2012 offers views on the lack of political will to confront the realities of this plague and to recognise the harm being done to international trade. BIMCO says that public opinion needs to be galvanised over the many outrages which face shipping operating in pirate infested areas. While providing practical assistance with the development of standard contracts for armed guards on ships, BIMCO calls for a new strategic approach to combating piracy, noting that the industry continues to bear the brunt of international failure on the political front. The New Year will see BIMCO addressing political leaders directly, calling for a new approach and emphasising the significant threat to world trade represented by piracy on such a scale.

New opportunities

There may be serious challenges facing shipping in the coming year but Reflections 2012 notes that the good news is that “the world is still turning and trade is growing”. In his introduction, BIMCO president Yudhishthir Khatau suggests that even in difficult times “there will continue to be new opportunities and many will be tempted and some rewarded for exploring them”. He forecasts consolidation in the industry, pointing out the realities of operating in a business dominated by cash flow. The president suggests that “shipping will prevail and find calmer waters, as has always been the case”. BIMCO’s stance is that the date and time of this recovery remains in doubt.