Economy, regional regulations and piracy make 2012 a challenging year, says BIMCO

KhatauIn its recently published annual analysis Reflections 2012, The Baltic and International Maritime Council (BIMCO) examines the critical issues facing the shipping industry now and in the coming year. In the analysis, BIMCO emphasizes the need for regulation to be maintained on a global basis, and calls for practical and pragmatic moves on environmental rules On the important human element, it notes the need for fair treatment of seafarers, and when considering the menace of piracy, calls for a new a strategic political approach by governments.

BIMCO is the largest of the international shipping associations representing ship-owners controlling around 65 percent of the world’s tonnage and with members in more than 120 countries.

In his introduction to Reflections 2012 BIMCO President Yudhishthir Khatau suggests that even in difficult times “there will continue to be new opportunities and many will be tempted and some rewarded for exploring them." He forecasts consolidation in the industry, pointing out the realities of operating in a business dominated by cashflow. Khatau, however, suggests that “shipping will prevail and find calmer waters, as has always been the case."

Reflections 2011 calls for “daring and decisive political leadership”, especially as it confronts the challenges within the EU and U.S., with their considerable influence on maritime trade. It points also to the need to stimulate domestic demand in Asian nations, despite their own regional difficulties. It forecasts a 4% GDP growth worldwide —similar to that of 2011—but warns about the significant oversupply in shipping tonnage in all three main sectors, with no short term comfort discernable, recommending the traditional remedies of idling and recycling to control this tonnage glut.

BIMCO points out that the year will be particularly challenging for the container sector, which will see another 50% increase in the number of very large containerships entering service.  Nevertheless, owners are urged to learn from past lessons of “expecting the unexpected” with India, perhaps starting to fulfil its import potential during the coming year.

On regulations Reflections 2012 reiterates BIMCO’s demand for a global perspective to prevail, with international ratification of important conventions and a rejection of regional alternatives. BIMCO also emphasizes the need for shipowners and shipbuilders to more fully realize their interdependence and to work more closely together on a whole range of issues common to the two industries.

On the environment, BIMCO views the further development of the Energy Efficiency Design Index (EEDI) for new ships built after January 1, 2013, as a significant key to international progress on atmospheric emissions. It also takes a dim view on regional environmental regulatory initiatives, which pose particularly complex operational challenges for internationally trading ships. It also hopes to see movement on the important Ballast Management and Recycling Conventions in the coming year.

A major emphasis of BIMCO has been the rush to judgement and criminalization of seafarers, especially in the aftermath of environmental incident. BIMCO also highlights the growing demand for a better trained and educated industry workforce, which has encouraged the organization into becoming, with its eLearning Diploma Programme, a major educational hub for the industry.

On the continuing issue of piracy, Reflections 2012 offers strong views on the lack of political will to confront the realities of piracy and to recognize the harm being done to international trade. Public opinion also needs to be galvanized over the many outrages which face shipping operating in pirate-infested areas. While providing practical assistance with the development of standard contracts for armed guards on ships BIMCO calls for a new strategic approach to combating piracy, noting that the industry continues to bear the brunt of international failure on the political front. The New Year will see BIMCO addressing political leaders directly, calling for a new approach and emphasizing the significant threat to world trade represented by piracy on such a scale.

January 4, 2012

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