News Risk Management10 Oct 2018

Maritime industry unprepared for global issues impacting sector-report

10 Oct 2018

Senior maritime executives 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, according to the Global Maritime Issues Monitor 2018 issued last week by the Global Maritime Forum, Marsh, and the International Union of Marine Insurance (IUMI).

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,” said Global Maritime Forum chairman Peter Stokes.

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.

Top issue: Cyber-attacks and data theft

Cyber-attacks and data theft are 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 both challenging conventional business models and 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 capitalize on these opportunities, while protecting their people and assets from digital threats,” said Marsh global marine practice chairman Marcus Baker.

Other top issues dominating the maritime industry are economic forces such as a global economic crisis, energy price fluctuations and changing trading patterns.

Decarbonisation: No quick fix in sight

With reducing greenhouse gas emissions a major challenge for the maritime industry; viable alternatives to traditional fuels and propulsion technologies are required to succeed in this effort.

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,” said IUMI president Richard Turner.

Digitalisation: No fear of non-maritime disruptors

Interestingly, the report found that 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.

However, this does not reflect the growing influence of data-based companies and the increasing power of data in our society, so it could be possible that barriers to entry into the maritime industry are simply too big, profit margins are too low to attract new entrants, or key maritime stakeholders are not sufficiently informed on the potential risks involved.

The Global Maritime Issues Monitor 2018 can be read here.

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