Business opportunities abound in shipping industry

Business opportunities abound in shipping industry
SHARP MINDS CONTENT August 21, 2019 https://www.manilatimes.net/business-opportunities-abound-in-shipping-in...

Despite facing strong winds of challenges and crises year after year, the shipping industry continues to create business opportunities for other sectors. Losses and unprofitability have rocked the industry across all sectors, forcing even the strongest players to forge alliances with their competitors to remain afloat.

Notwithstanding the waves of bankruptcies hitting the sector on one side, new maritime business opportunities are emerging on the oceanfront. These create new business models and innovations that both struggling and startup companies can set their sights on.

Forward-looking investors and companies can propel their bottom line to positive figures by directing their focus on new maritime perspectives.

OECD forecasts

The Organization for Economic Cooperation and Development (OECD), the group of most advanced economies, said that on a business-as-usual scenario, the global value of ocean-based enterprises could double by 2030 to reach more than $3 trillion. Strong and fastest growths in offshore wind, fish processing and aquaculture, shipbuilding and repair (SBR), as well as port activities, are expected.

These potential businesses can contribute significantly to employment growth, with 40 million jobs expected to be generated worldwide.

Sustainable business ideas

Keith Lawrence, Conservation International’s Center for Oceans’ lead economist, said one area of opportunity is the so-called blue economy. which refers to the sustainable management of ocean resources that leads to beneficial and healthy economic activities. It aims to prevent exploitation of vast marine resources and promote responsible and sustainable marine-related activities.

Blue economy’s advocacy goes beyond business as usual and pushes for economic development through optimum use of resources without compromising the marine ecosystem. Components of the blue economy include not only traditional ocean-based industries like maritime transport, fishing and tourism but also emerging business ideas in aquaculture, offshore renewable energy exploration and mining.

It also covers activities involving the extraction of seabed resources, marine bioprospecting and biotechnology. Blue economy directs the course of these various ocean activities to new paradigms that lessen their impact on oceans and coastal areas. Significant contribution to other human activity and economic pursuits where blue economy can make a difference include coastal protection, disposal of various wastes, existence of biodiversity and carbon sequestration.

Green energy

With the looming implementation by January 2020 of the International Maritime Organization’s (IMO) cap on greenhouse gas (GHG) emissions, shipping companies are scrambling to seek ways for compliance. IMO 2020 specifically aims for 0.5 percent reduction in sulfur emissions and one solution is fast rearing its head — the shift from fossil fuel to liquefied natural gas (LNG), which is a no-sulfur alternative energy source.

Both tankers and processing plants must be able to respond to the anticipated increase in demand for LNG.

ICT-based business solutions

A number of smart ships are going on their maiden voyage and revolutionizing the shipping industry in the digital era. The Internet of Things can equip vessels with various state-of-the-art equipment in communications as well as other operations aspects so that these ships no longer remain isolated at sea but become more easily accessible. ICT solutions provide tremendous support in navigation, port calls and other aspects of shipping.

Smart ships are already compliant with the clean-fuel requirement imposed by IMO and would push demand for such type in the fuel markets.

Opportunities in the Philippines

The Philippines, as the world’s fourth largest in shipbuilding and repair, can take advantage of these emerging trends in global shipping. Surrounded by bodies of water, this strategic geographic location makes the Philippine shipyards and ports a perfect choice for international shipping lines.

Investors looking for business opportunities can consider putting their resources in the industry. While the shipping sector has suffered a slump in the last five years, SBR continuously thrives in the Philippines.

The need for competent workforce to be deployed in various shipyards in the country provides opportunities for training institutions. An instructor at a maritime school said that while the government has a training institution such as the Technical Education and Skills Development Authority, national classifications provided by the institution are not enough in the international job market. There is still room for more prestigious technical and maritime schools that would produce a competent workforce.

Philippine merchant marine schools produce thousands of graduates in marine engineering and technology. The theoretical knowledge of these individuals can be honed to produce world-class seafarers that are fit to manage and man the old traditional vessels as well as the new smart ships.

Port operations

Chelsea Logistics Holding Corp., a shipping firm, has recently offered to takeover from the government the rehabilitation and modernization of Davao City’s Sasa Port. The P16-billion offer is being assessed by the Philippine Ports Authority. If the project pushes through, it is expected to boost economic activity not only in the city but also in adjacent southern provinces.

Consultancy services

Meanwhile, more seasoned seafarers are putting their hard-earned money to establishing consultancy service firms for maritime related activities. Knowing the ins and outs of the shipping industry through their vast experiences in handling foreign vessels, working alongside various nationalities and negotiating deals in foreign ports, these groups of people believe that they are contributing to the economic growth of the country.

A recently retired master who has joined a friend’s consulting agency said there is a great potential for the Philippine maritime industry to grow tremendously, if those who had the means as well as the knowledge would be willing to engage actively whether directly or indirectly in the sector.

“I have seen how ports in Europe and Singapore are run with high efficiency. I think we can replicate their best practices or even surpass them. However, the government must be able to have an iron will to eliminate bureaucratic ways that put the country’s growth targets at risk.

Corruption must be eliminated or else it will only continue to pull us back and efforts go to waste. We have highly technical and capable people. But the mindset has long been mired in dubious ways of getting things done,” he said.