Online freight forwarder iContainers says 2019 was a year of uncertainty for the shipping industry, and that while certain sectors have seen improvements, the industry should remain alert for the challenges 2020 will bring.
Even though the shipping industry will have new challenges to face in 2020, most of it will have a familiar feel. According to iContainers, the three themes that will need to be monitored this year have already featured in large parts of the previous years. These include the ongoing Brexit negotiations, the US-China trade war, and IMO 2020.
“We will have to see what ends up happening with Brexit and how that affects European trades. The industry will also continue to adapt to the development of the tariff war. At least the industry as a whole is used to changing climates and usually adapts pretty quickly to any changes,” said Klaus Lysdal, vice president of operations at iContainers.
“As for IMO 2020, carriers should already have everything in place. So it’s mainly just how the increased fuel cost will affect pricing and if carriers keep a united front on the fuel cost or if it becomes a strategy pricing tool for some of them.”
Aside from these recurring headlines, one particular growing issue that iContainers feels will need to be addressed this year is onboard fires caused by misdeclared cargo.
According to the Barcelona-based forwarder, part of the problem stems from misinformed shippers and inept practices.
“At this point, forwarders are still taking shippers’ word for what’s loaded in the container. But from a forwarder’s perspective, that tends to increase the risk that clients who are not well-versed in hazardous cargo and looking to ship it may come to forwarders. This puts the forwarder at risk, especially if the shippers’ paperwork is not in order,” said Mr Lysdal.
Mr Lysdal believes this is an imperative problem that needs to be addressed urgently, especially given the growing vessel sizes, whose larger capacities increase the risks of having misdeclared cargo onboard.
He warns that failure to tackle the problem before it gets any worse could ultimately lead to regulations that could cause an increase in shipping costs.
“Some of the carriers’ initial steps to increase fines may help. But if this persists, it could result in mandatory manual inspections or similar moves to protect against these types of issues. Something like that would obviously lead to additional costs involved with shipping,” cautioned Mr Lysdal.
“But something has to happen as we cannot keep having fires happening onboard vessels.”
Digitalisation and automation
In terms of digitalisation, Mr Lysdal expects headway to be made and to a much larger extent as digitalisation slowly becomes an industry standard.
“Both digitalisation and automation will become less of a buzzword, mainly because a large part of the industry has already moved beyond the adoption phase to the development phase. It’s almost to be expected that everything being developed or purchased these days will include some level of automation or digitalisation.”
Over the past few years, the ocean freight industry has seen an influx of systems, apps, platforms, and companies that provide different solutions to different issues. As the industry moves forward, Mr Lysdal foresees development in more comprehensive and complete solutions instead of solutions to localised and specific parts of the whole picture.“By themselves, some of these solutions may appear a little gimmicky because they may only solve one small part of the puzzle. But these are completely good and valid ideas that offer better answers than the options that are currently available.”
“Within the next few years and hopefully even this year, we should start to see more of these being integrated into more comprehensive solutions and hopefully gain more traction.”