Gearing up for a neo-panamax world

The first wave of 8,000 to 10,000 teu ‘neo-panamax’ vessels started to flow through the widened Panama Canal a few months ago, signalling a new era in shipping and logistics in our hemisphere.

According to reports, within the first month of its opening, the expanded canal welcomed 53 vessels, including 22 liquefied petroleum gas vessels, 28 containerships and two vehicle carriers. The number of reservations that the canal has received from various types of neo-panamax vessels is growing by the week. This increasing demand is further evidence of the maritime industry’s continued trust in the expanded canal and the impact it will have on the future of global maritime trade.

For us in the Caribbean region, not only is it destined to have profound effects on container trade flows, ports and intermodal operations, but it widens the conversation among stakeholders about the strategic adaptive abilities of our sector, particularly when viewed in tandem with other critical global industry factors.

Impact

Individually and as a collective we continue to grapple with the impact of big ship alliances and the resultant network synergies; rapidly evolving technology and the impact of big data, energy and environmental policy, enforcement of global safety standards, cyber security threats and more, all of which promise to have a huge impact on the survivability of regional port and terminal operations as well as investment opportunities for business growth.

All of this is transpiring in a period of low commodity growth for shippers, with most of the developing world in an economic slowdown. In short, we have a lot to deliberate on and strategically address.

These issues are real and significant and largely beyond the power of any one shipping interest to address. But no one can afford to throw up their hands and accept their fate. Opportunities yet exist if we accept, adapt, innovate and advance.

Most of us will be able to benefit from better business forecasts and greater predictability of market and pricing trends occasioned by the increasing availability of shipping data and advances in big data analytics. More and larger containerships will require investment in ports, infrastructure, technology and services to ensure that the flow of business remains efficient. How ready are our regional shipping interests to capitalize on a new paradigm where evidence-based decision-making replaces instinct and years of experience? How do maritime companies transform to add value and increase their competitive advantage through development and deployment of technology? Should we be recruiting and training maritime data analysts?

Implications

Shifts in global demographics and population growth rates, coupled with long-term economic growth in developing markets, have implications for the maritime sector over the course of the next decade. According to recent reports, the middle classes, with their sizeable disposable incomes, continue to expand in the emerging economies of Asia, Africa and Latin America. These groups will drive growth in demand for imports of commodities and finished goods. One consequence for the maritime sector of this possible rise in consumer spending in developing markets will be long-term growth opportunities for container shipping.

In their logistics operations, networks and fleet activities, regional shipping interests have opportunities to improve performance. Companies must find, test and invest in new products and services, modern organizational and business models, technology and the digitization of key operational processes in order to evolve with the rest of the world. It is not too far-fetched to imagine that, within three years, new technology start-ups can develop a data-based understanding of cargo flows. Already, new IT-enabled businesses are making inroads into logistics and freight forwarding markets; others aim to automate processes for ocean freight booking and invoicing. In anticipation, leading carriers are investing in devices and software to track containers in real time. To accelerate the technology development and adoption, government and private sectors need to work together to drive the changes and ensure the smooth transition of new innovative methods.

We recognise that our human capital must also grow and evolve. Companies need to find ways to help employees embrace new ways of working and must be prepared to bet on the future. Those that embrace change will be better prepared than their rivals to make the best of the current business cycle and to thrive in the next one. To attract the next generation of maritime professionals, our pool of labor must become more technologically advanced and innovative and must learn new skills and integrate new technology.

By the time you receive this issue of ‘Caribbean Maritime’ we will be enjoying the hospitality of Trinidad and Tobago members of our association at the 46th Annual General Meeting, Conference and Exhibition. I am certain that the issues raised here will expand with the requisite attention and discourse of all the participants. I look forward to robust and productive dialog during the conference.

David Jean-Marie
President 
Caribbean Shipping Association