Maritime transport is made up of 80% of world trade. A very important sector for our country, and certainly one of the most dynamic in our economic history. The question that arises is the following: how will the maritime transport sector emerge from this surreal situation triggered by COVID 19?

We realize that all maritime goods traffic is controlled by a few large conglomerates, in principle, only by 10 companies. In recent years, these companies have had a growth trend achieved thanks to the merger and alliances created for the primary needs of sharing risks and costs, and therefore obviously to maintaining the networks connected to them.

At the top of the ranking are the Danish giant Maersk Line which encompasses 17% of the global market, followed by MSC with 16%, and by COSCO at 12.5%. The French CMA CGM (11.4% market share) and the Taiwanese Evergreen (6% market share) remain in line, forming the Ocean Alliance.

Finally, the third Alliance is formed by the German Hapag-Lloyd (7.4% market share), the Sino-Singoporean Yang Ming (2.8% market share), the Korean Hiunday (6% market share), and the Japanese ONE (6.7% market share). All these large companies were obviously hit by the pandemic, and the resulting effects were primarily the lower demand for goods and raw materials which consequently pushed freight rates down.

The drop in transport demand following the spread of the coronavirus pandemic is bringing a number to contain losses more and more companies to resort to blank sailing or the cancellation of the touchdown of a port, an area or an entire sea ​​route. The 2M Alliance formed by Maersk and MSC has announced, for example, a black sailing on 21% of the Asia-Europe trade in order to better manage its operational capacity.

The main concern is the effects that coronavirus is having on the entire logistics chain: from finding the crew, safety on board, from delays in supplies to those related to ground inspections. Many countries have responded to the pandemic imposing lockdown or limiting movements. Some retailers and manufacturers are unable to pick up the cargo and containers because i their warehouses are full or closed thus congesting ports. Ports themselves conditioned by a limited availability of workforce that reduces the ability to distribute and move goods, aggravating congestion and causing the interruption of supply chain, including the movement of essential goods and food.

The uncollected cargo in ports, in turn, creates congestion and takes up space, reducing the capacity of the incoming cargo and containers. Finally, if the cargo is not of essential goods, it cannot be moved to ports during a national blockade. This may result in the ship arriving at the port and not finding any cargo to ship.

All with important insurance implications and legal disputes.

So what will happen?

While it is almost impossible to make short-term forecasts for the sector once the pandemic is defeated, the health crisis could spur investments in different segments of robotics and transportation technology. In fact, it is expected that the technology connected to data analysis and the use of artificial intelligence will be greatly enhanced in the future in order to improve the overall management of the end-to-end supply chain.

Investments in transport technology companies will help the industry to connect all the different actors, shippers, brokers and transporters, and optimize their operations.


But the next step, closely related to the first, will be to progressively move towards automation both in the handling part on the quay and in future scenarios also for autonomous maritime transport.

The first self-driving cargo ship was launched in China, with a first maiden voyage to Zhuhai, Guangdong in November 2019. According to the creators, autonomous driving will reduce construction costs by 20%, construction costs by 20% operating and fuel consumption by 15%.

Other companies are moving in the meantime, such as the Korean Samsung which is investing in the creation of an intelligent navigation platform through its Samsung Heavy Industries division.

Source: https://www.ispionline.it/

Luema srl, as always, are constantly informed, and we try to navigate in the safest direction for us and for our customers, confident that this storm will end as soon as possible.

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