Cyber theft, energy cost and trade are top fears for shipping industry
Trading conditions rather than new technology and regulation are the biggest worries for shipping companies according to the Global Maritime Issues Monitor 2018, published by a consortium of the Global Maritime Forum, global insurance broker and risk adviser Marsh, and the International Union of Marine Insurance (IUMI).
The report says senior stakeholders believe that the global maritime industry is not prepared to deal with major issues that are likely to impact it over the next ten years. Economic issues dominate maritime agenda with the impact of future ‘global economic crisis’ ranked as most severe in the 10-year outlook. ‘Cyber-attacks and data theft’, ‘energy price fluctuations’, and ‘changing trading patterns’ most likely to occur. There is however less concern among stakeholders of ‘increasing influence of non-maritime disruptors’
The first industry report of its kind, the Global Maritime Issues Monitor 2018 examines the impact and likelihood of 17 major issues based on research among senior maritime stakeholders across over 50 countries globally. According to the research, the maritime industry does not appear to be prepared for any of these issues. Worryingly, this is amplified by the fact that the issues the industry are least prepared for are the ones deemed to have potentially the biggest impact on the sector.
“The difference between a risk and an opportunity is how soon you discover it. The Issues Monitor shows that there is a need for a greater awareness of the long-term forces shaping our decision-making and the Global Maritime Issues Monitor can in this perspective be seen as a modest contribution to a thorough understanding of the current state of affairs,” says Peter Stokes, Chairman of Global Maritime Forum.
The five issues that the maritime industry appears to be least prepared for are ‘cyber-attacks and data theft, ‘global economic crisis’, ‘geopolitical tension’, ‘air pollution’ and ‘governance failure’.
Cyber-attacks and data theft appear to be the maritime industry’s Achilles’ heel. In addition to being ranked as the top issue that the industry is least prepared for, executives believe it has the highest likelihood of occurring and is only surpassed by a ‘global economic crisis’ and ´energy price fluctuations’ in terms of impact.
“Emerging digital technologies are challenging conventional business models and are creating new opportunities for the global maritime industry. But, along with its transformative power, this digitalisation is creating rapidly evolving risks such as cyber-attacks and data theft. It is worrying that, despite recent high-profile attacks, the industry is failing to get to grips with cyber risk. By taking a more strategic approach, firms are better positioned to capitalise on these opportunities, while protecting their people and assets from digital threats,” says Marcus Baker, Chairman of Global Marine Practice at Marsh.
Apart from ‘cyber-attacks and data theft’, economic issues such as ‘global economic crisis’, ‘energy price fluctuations’, and ‘changing trading patterns’ dominate among the top issues of the maritime industry.
According to the research, the ‘increasing influence of non-maritime disruptors’ does not seem to keep senior maritime stakeholders awake at night. In the Issues Monitor’s deep dive on digitalisation, the issue is ranked number six out of seven both in impact and likelihood, placing higher only than ‘3D printing’. It is also the issue for which the maritime industry feels the least prepared.
This does not reflect the growing influence of data-based companies and the increasing power of data in our society. Whether barriers to entry into the maritime industry are simply too big or the profit margins too low to attract new entrants, or whether key maritime stakeholders are not sufficiently informed on the potential risks involved, is an open question.
Reducing greenhouse gas emissions is a major challenge for the maritime industry; viable alternatives to traditional fuels and propulsion technologies are required to succeed in this. In the Issues Monitor’s deep dive on decarbonisation, ‘non-fossil fuels’ and ‘alternative propulsion technologies’ - both potential pathways towards zero-emission vessels - are perceived to be less significant in impact and likelihood over the next 10 years. This is further confirmed by the industry’s low ranking of its perceived preparedness for both issues: ‘non-fossil fuels’ were given the lowest preparedness score of the section, with ‘alternative propulsion technologies’ ranking in third lowest place.
“The development of non-fossil fuels and alternative propulsion technologies is a prerequisite if the maritime industry is going to achieve a reduction in greenhouse gas emissions by at least 50% by 2050 as stated in the IMO’s initial climate change strategy. It is one of the industry’s biggest challenges in our lifetime and will require innovation, collaboration and investment from all stakeholders,” says Richard Turner, President of IUMI.