The global maritime industry is undergoing stiff challenges on the back of ongoing COVID-19 pandemic. The downward shift in the manufacturing and production activities have adverse ripple effects on the supply chain that is being translated in the global shipping industry.
The COVID-19 outbreak had a negative impact on the maritime sector, slowing down activity due to sharp drop in demands. Halted production in the industrial sector and drop in oil demand had a major impact on the dry bulk and tanker shipping segments. Oil tanker earnings spiked in the three months from March 2020 to May 2020, before their steep decline thereafter. However, forecasts of stabilizing global oil demand signal a better 2021 for this segment. Shutdown of cruise lines was another blow to the industry with estimated cruise traffic decline by 6-12 mn passengers. Offshore vessels, too, have been laid up worldwide, with owners unable to bring them back into service or recycle them due to low demand.
Nonetheless, select segments of the industry returned to their path of recovery as economies eased lockdown measures. Increasing container volumes across the Far East-North America passage post mid-2020, gave a boost to the container shipping segment. Freight rates also touched $5,000 per TEU, highest in the last 18 months. The offshore wind sector was majorly shielded from the impacts of the COVID-19 crisis, mainly due to longer project timelines.
Renewable technologies such as offshore wind, as well as other energy efficiency measures, are capable of delivering more than 90% of the emission reductions needed while also providing employment and economic gains. Around a third of all new renewable power capacity added in 2019 was from wind power. Offshore wind energy, as a clean, scalable, as well as affordable technology, will be critical in supporting decarbonization. With evolving technologies, policy shifts, reduced market and regulatory barriers, intensifying commitment to renewable energy, growth in investments, a strengthening economic case, and a strong pipeline of bankable projects, offshore wind will further help in green recovery; becoming a cornerstone of the global energy transformation movement.
This newsletter will focus on the several shipping sectors and highlights a theme. The theme of this newsletter covers the Offshore Wind sector – a flourishing sector for a green future.