The prospects of the Maritime Industry for 2023

Undoubtedly the biggest challenge facing the maritime industry is how to comply with the increasingly more stringent emission regulations both for the existing fleet and for newbuilding orders. Although dual fuel vessels offer advantages and as per Clarkson’s research 61% of all newbuilding orders have such features, this alone is not sufficient for compliance especially post 2030. There remain enormous technological challenges in main engine design and efficiency as well as for other energy saving devices. Moreover, it is not known how the associated higher vessel cost will be shared between owners and charterers nor what subsidies, incentives and state support there might be in the future. As a result, newbuilding orders have slowed down to record low levels offering much needed support for the industry across all sectors.

Turning to more immediate issues, the global economy and shipping faced massive challenges in 2022 and have been massively impacted by high energy prices, high inflation, risks of recession, a slowdown of international trade, the slowdown of China, increased sanctions, the disruption of trade routes and patterns of trade, geopolitical issues arising from the Ukrainian war, huge rises in interest rates, lingering Covid problems, low scrapping and reduced port congestion.

“However, it is anticipated that some of the above adverse factors will dissipate in 2023 with international trade growth expected to pick up, China to accelerate its growth, scrapping to increase, interest rates to peak and overall demand for shipping to outstrip supply. The IMF forecasts global growth at 2.7% in 2023”.

The above toxic cocktail mix has depressed all main sectors with the exception of tankers which are benefiting from the effects of sanctions and the rush by Europe to import as much LNG, coal and oil as possible to offset the disruption of Russian supplies.

However, it is anticipated that some of the above adverse factors will dissipate in 2023 with international trade growth expected to pick up, China to accelerate its growth, scrapping to increase, interest rates to peak and overall demand for shipping to outstrip supply. The IMF forecasts global growth at 2.7% in 2023.

The implications for Greek shipping and the Greek fleet in 2023 are that its upward trend in market share is expected to slow and the gap with China, the second largest fleet, to narrow.

Ted Petropoulos, Head, Petrofin Research©

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