The Marine Industry: Current Framework and Predictions
How Large the Marine Industry is Today
The marine industry caters to as much as 80% of global trade by volume and more than 70% of global trade by value, according to a paper published in 2015 by the United Nations Conference on Trade and Development (UNCTAD). Without goods and crude travelling by sea, much of the development that the modern world has witnessed would not have been possible…at least not sustainable.
The maritime industry comprises of over 50,000 merchant ships (excluding military or navy vessels). These ships facilitate international trading, transporting a variety of cargo. These vessels need to be registered by a nation, and carry its flag. There are 150 nations that register these vessels. The global seafaring community comprises of over a million seafarers of almost every nationality. These figures were published in November 2015 by the International Maritime Organization (IMO).
Types of Merchant Vessels
Merchant vessels are ships that are engaged in “active commercial transportation,” according to an article by the Maritime Connector. Naval ships do not fall under this category. Merchant vessels can be divided into four main types according to their size and the cargo they carry.
Dry cargo ships: These include bulk carriers and container ships.
- Bulk carriers: These vessels carry bulk cargo that is transported unpackaged, such as ores, coal, cars, grains, cement, etc. They can be categorized according to their size, including Small, Handysize, Handymax, Panamax, Capesize and Very Large.
- Container ships: These vessels carry miscellaneous goods that are transported in large containers. They can be categorized according to their size, including Feeder, FeederMax, Panamax, and Ultra Large.
Tankers: These vessels are used for transporting crude oil, LNG (liquefied natural gas), finished petroleum products and chemicals. They can be divided into categories based on their size, ranging from handysize to Ultra Large Crude Carriers (ULCC).
Passenger Ships: These carry people, and include small ships for purely transportation purposes to huge luxury liners for pleasure voyages.
Other Ships: These include Specialized Ships and Offshore Vessels.
- Specialized Ships: These carry specific goods like machinery.
- Offshore Vessels: These carry people and goods to offshore oil platforms.
Drivers for Growth
The beginning of the 21st century witnessed rapid development in marine technology, IT, communication and materials, which has had a strong impact on the marine industry, according to the Plymouth Marine Industries Demand Study published in March 2015. The main drivers of accelerated growth for the maritime industry are rising customer demand for goods and the expansion of new trade hubs.
Advancements in navigation and tracking have also propelled the marine industry. Rapid developments in the Global Positioning System (GPS) have had a huge impacted on maritime operations. GPS technology had evolved as the fastest and most accurate technique for the marine industry to navigate, determine location and measure speed, say experts at The GPS Store.
Economic growth in the emerging markets of the BRIC nations (Brazil, Russia, India and China) and rising disposable incomes have boosted demand for imported goods, says the Global Maritime and Trade Trends report by the HIS in 2015.
Legal and Regulatory Framework
Since the beginning of the 21st century, two main international regulatory bodies - the IMO (International Maritime Organization) and the ILO (International Labour Organization) - have forged several guidelines to enhance ship safety, ensure crew wellbeing and protect the environment. Confronted by stringent regulations, the marine industry has turned towards powerful software to ensure conformity, according to an article by The Ark Marine Solutions.
Prediction for 2016
Fitch Ratings has revised its 2016 outlook for the global shipping industry from stable to negative, citing slowdown in emerging economies as a reason. This economic slowdown is expected to result in overcapacity, translating to declining freight rates. The global leader in credit ratings and research mentioned, however, that while dry-bulk and container shipping would remain under pressure, tankers and LNG ships would deliver a better performance.
The global marine industry is projected to record a CAGR (compounded annualized growth rate) of 4.7% between 2015 and 2020, according to a global marine research conducted in June 2015 by Research and Markets. Majority of growth is expected from the Asia Pacific region, backed by healthy economic growth in China and India, while Europe and North America are expected to record some growth due to increasing industrial production and rising demand for imports.