The Lloyd’s List Podcast: Why shipping’s asset play model may be heading for extinction
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Shipping’s traditional business models are not well set up for the race to zero emissions and shipowners may not be in the driver’s seat at all. According to Danish Ship Finance’s latest view from their head of research Christopher Rex, owners will have to get used to making less money from asset plays and more from actual shipping operations. This may be no bad thing for the overall health of the industry
THE introduction of greener fuels at scale is some years ahead of us, but the race to zero it is already shaping the strategic outlook of companies.
We have made the argument several times over on previous podcast editions that shipping’s traditional business models are not necessarily going to survive this transition and that’s because they simply bring too little volume to the table. Only the largest shipowners with strong balance sheets seem to be battle-ready for an energy systems shift.
Digitalisation, standardisation and economies of scale — these are all well-established topics for this podcast. But they imply long-term changes for the industry that are perhaps not being thought about in terms of strategically changing business models.
One person who has been thinking about these changes for some time is an old friend of the podcast, Christopher Rex, who is the head of innovation and research at Danish Ship Finance.
What started as a thought experiment around the Fourth Industrial Revolution and how that might affect the business of shipping and future trade patterns, has evolved over the years into a much more considered view of what happens next.
The latest Danish Ship Finance report came out earlier this week and, given the context of COP27, we thought it would be an opportune moment to get Christopher back on to the podcast to explain why he thinks that many shipowners are not going to be winning the industry’s race to zero.