As the New Year draws closer, we look at how global trade may be affected. With these 2020 ocean shipping trends to keep an eye out for, you will be able to decide for yourself what business decisions to make.
Increase in Shipping Costs
If you were to compare the shipping industry costs to China at the dawn of 2019, it was much higher than it is now. There was a dip in fixed rates during the months of April and May, but with the introduction of the low sulfur regulation as per IMO 2020. The costs will be factored based on the types of carriers and thus will be adjusted accordingly.
Becoming more Sustainable and Eco-friendly
With the effect of IMO 2020 Low Sulfur Fuel regulation, there are also more regulations coming in that will require ship owners to become more sustainable and environmentally friendly. The LSF regulation looks towards lowering emissions by 2050, where other measures include cleaning dirty ballast water such/discharge by 2024.
Technology to Increased Efficiency
The use of technology to aid in bettering processes and business models/structures will continue in the shipping industry. This will improve the likes of customer experiences, and digitize processes via automation and digitization.
Industries of Scale
Following the concept of industries of scale, the shipping industry will become more balanced with carriers controlling supply with more discipline and becoming market influencers. Balancing of supply and demand will occur, but smaller carriers will continue to be vulnerable as they look towards forming alliances.
Geographical Shifts
Since mid of 2018, there have been geographic shifts within the shipping industry temperament that showed that importers were looking towards alternate counties of origin for their businesses. Whilst this have been occurring within the last year, there will be shift in volumes in 2020. That would mean that Southeast Asian countries will be gearing up for infrastructural investments and offerings, whereas Chinese shipping volumes will reduce.