The shipping industry – considered the backbone of global trade – is no stranger to disruptions and challenges. Amid geopolitical and economic turbulence, shifting trade patterns, volatile freight rates, and increasing environmental regulations, the maritime sector has identified the importance of developing resilience to manage complex challenges as well as improve responsiveness to changing market conditions.
As the business landscape transformed in the aftermath of the pandemic, the shipping industry emerged as a beacon of adaptability. Having contracted by nearly 4 per cent in 2020 on the back of Covid-19, international maritime trade recovered in 2021 as volumes bounced back at the rate of 3.2 per cent. Shipments reached 11 billion tons, according to the Review of Maritime Transport released last year by the United Nations Conference on Trade and Development (UNCTD).
In line with global trends, the maritime industry in the UAE also witnessed a rebound in demand for shipping, logistics and cargo. Its remarkable growth in the past few years is a testament to the sector’s resilience and capacity to transform crisis into an opportunity for positive change.
From strength to strength
There is a palpable sense of growth momentum that continues to accelerate across the sector. One of the world’s leading shipping, logistics and marine services providers, GAC is seeing record volumes of cargo calls and husbandry attendances in the Middle East, particularly in Dubai. “We have secured long-term contracts within Dubai Drydocks, a leading dry dock facility for ship repair and conversions,” says Fredrik Nystrom, Group Vice President – Middle East region, GAC Group, adding, “Located at the crossroads of global commerce connecting Asia and Europe, the Middle East is home to key shipping routes and world-leading logistics facilities, ports, airports and free zones. The region looks set to capitalise on its advantageous position and become a major player in global trade in the coming years.”
Eugene Mayne, Group CEO at Tristar, an integrated energy logistics solutions provider, echoes the sentiment, highlighting the critical role that government support plays in driving the UAE’s maritime industry. “Favourable government policies and support for the industry, including initiatives to enhance maritime services and facilitate trade, contribute to the sector’s growth.
“The establishment of free trade zones in the UAE helps attract foreign investments and encourages international trade, further driving shipping activity.”
UAE’s merchandise trade with the world crossed $1 trillion mark in 2022, as per the World Trade Organisation (WTO), and the share of both exports and imports increased on the back of higher crude oil prices. Imports accounted for 22 per cent of the total amount while exports grew by 41 per cent.
Tides of transformation
As international trade rebounded post-pandemic, companies capitalised on the situation to increase cross-border shipping activities. They adopted various strategies to optimise supply chain flexibility; embraced automation, AI, data analytics and the Internet of Things to streamline processes; and collaborated with partners and stakeholders to overcome capacity restrictions and manage costs.
“The digitalisation drive leads to a wealth of data being available. We are able to utilise this data to up our game, improve our traditional on-the-ground services and maintain our position as customers’ main information hub for local regulations and requirements, such as crew requirements, customs checks and documentation, for every port call we handle. That is the core role of a ship agent,” says Nystrom from GAC.
GAC’s Pegasus portal provides large international customers with data on 220,000 vessels and ports around the world so that they can predict port congestion and pick the best routes based on efficiency, operational and cost considerations, even before booking shipping services.
“By becoming more digitally connected, we can deepen our understanding of all the elements of a successful port call, improve our efficiency and pass on critical cost savings to our customers,” adds Nystrom.
As competition intensifies in the shipping and freight forwarding sector, companies that can successfully implement and integrate technologies into their operations will gain a significant advantage, say industry experts. These technologies not only help businesses improve their operations but also contribute to building resilience to withstand future shocks and reducing their carbon footprints.
“Logistics, shipping and supply chain is a challenging industry where innovation and technology adoption top the agenda for most players,” says Chandra Kala, COO of Dubai-based Consolidated Shipping Services (CSS), which specialises in international transport and logistics.
“As more back office operations and shipping processes go digital, we have to align our services with the industry requirements. We have to adapt quickly to keep up with the time. As a total solution provider, CSS Group has always complied with the changes taking place in the shipping industry and invested in technology to enhance operational efficiency. We have recently implemented new technologies in our e-commerce division to update our services,” she adds.
Promoting sustainable practices
Resilience in the shipping industry extends beyond technology and infrastructure upgrades. With increasing concerns over environmental impact, there is a growing focus on sustainability in the shipping sector. Stricter emission regulations and the push for greener practices require maritime and logistics providers to invest in eco-friendly solutions, which can sometimes be costly to implement. While challenges remain, the collective efforts of shipping, logistics and freight forwarding companies are propelling the sector towards a more responsible future.
GAC has undertaken a number of initiatives to reduce the carbon footprint of the organisation as well as its customers. For example, GAC’s bunker fuels procurement arm GAC Bunker Fuels partners with alternative fuel providers worldwide to source and provide all types of greener fuel options to its customers, including LNG, methanol, ammonia and biofuels.
In another initiative, GAC installed nearly 21,000 solar panels on the rooftops of three of its contract logistics facilities in Dubai, which produce clean energy to meet up to 93 per cent of the site’s total needs – the equivalent of powering 20,000 households.
With a global presence in 29 countries, Tristar Group has always been at the forefront of accelerating energy efficiency in the sector. Its protean efforts in fuel optimisation, carbon reduction and sustainability are recognised with Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicators (CII) certifications. Every vessel in its fleet adheres to International Maritime Organisation (IMO) standards.
“Various energy-saving and emission-reducing technologies are deployed at periodic dry docks to meet or stay ahead of regulations. Around 10 per cent of our coastal fleet is being readied to become zero emission vessels, and we are on schedule to pioneer a GCC-built hybrid power vessel. For the longer term, we are studying dual-fuelled ocean-going vessels, and battery-powered or hybrid vessels for our coastal fleet. We are also exploring wind-assisted power and air-lubricated hulls to further reduce fuel consumption,” says Mayne.
Future-proofing the sector
As the maritime sector navigates a rapidly evolving landscape, where uncertainty has become the new normal, risk and safety assessment and contingency planning have emerged as a key priority for leading service providers. This strategy helps them mitigate the impact of unforeseen events and build resilience, which in turn enhances their competitive edge in the market.
“Risk blindness can be a scourge for shipping. Although the sector has high levels of embedded resilience, there is room to improve risk management practices across the industry,” says Mayne, adding, “For any safety initiative to work it needs to be driven with a top-down approach, with visible and felt leadership at all levels in the organisation. This means building an ecosystem to ensure a sustainable safety culture is at the forefront of all decision making.” ■
Setting standards for the shipping industry
Classification societies establish technical rules and standards based on research and development. These rules help shipowners design and construct their vessels, under the supervision of class societies, following the industry standards. These rules also help them comply with all the latest technological developments to enhance the safety of their vessels and ensure protection of the environment,” says Waleed Al Tamimi, General Manager, Tasneef Maritime.
“The compliance is verified by class surveyors at the time of building a new vessel and annual renewal or intermediate surveys conducted during the lifetime of the vessel to ensure that its components and machinery are maintained according to class standards. The compliance is also verified for any changes in the rules or new requirement entering into force from International Maritime Organisation or International Association of classification society (IACS), or National Standards implemented by flag state.”
Demand for skilled professionals grows
"Shipping industry’s growth spurt is driven by global trade expansion, infrastructure development, green initiatives and technological advancements,” says Priyanka Singh, Recruitment Head, MBR Recruitment.
“Skilled professionals have plenty of opportunities in the sector. With their expertise and know-how, they can develop fulfilling careers in the dynamic world of shipping.”