Shipping Companies Challenges
90% of the world trade is carried out through ships, thus making them the backbone of globalization and international trade. As per the approximations of International Monetary Fund (IMF), the total tonnage of sea transportation is expected to double up by the end of the year 2030. Despite the growing demand, the scenario is far from being rosy for the shipping companies. There is a list of challenges faced by them, which has led to many shipping giants to file for bankruptcy. Let us take a look at a few of these difficulties:
1. New Environmental Regulations
Shipping companies are losing big bucks in the absence of reliable technology that is universally approved. Governments of all countries require these companies to regulate their Co2 emissions through implementation of newer energy-saving technologies. Installing equipment which might not even prove to be useful later and which costs a significant investment bestows a series of hardships on these companies.
2. Job-cuts and labor disputes
The global economic meltdown has forced these companies to increase layoffs of maritime employees. Besides this, time and again there are labor strikes and conflicts which disrupt operations and in turn, negatively impact profitability.
3. Security Risks
Maritime piracy and armed robberies are an all-time high, and with the advent of modern technologies, ships have now become susceptible to cyber-attacks and defenseless to digital assaults. Many shipping companies confront threats of getting hacked leaving sensitive location information from GPS, ECDIS, and AIS open for access.
4. Political Scenario
Brexit has had an enormous impact on the world trade and globalization seems to be currently having a pause moment. U.S. and China have become the bedrock of international commerce due to continued problems in Europe. Increased trade scrutiny by these political powers might put the shippers into a losing situation again.