SHIPPING tends to thrive on short-term market disruption and long-term regulatory stability that allows investment predictability.

We have the former, in spades, but even the most optimistic of oracles would have dismissed the extremities of this year’s markets as delusional drivel at the point we were assessing prospects in last year’s round of industry outlooks.

Pent-up demand, supercharged stimulus programmes, vaccination progress and economic improvements have effectively rebalanced trade volumes, while the Covid-induced bottlenecks in a supply chain ill-equipped to survive even mild disruption have seen to the rest.

Even the liner chief executives currently seeking sufficient volumes of mattress space or logistics purchases to deal with their $100bn profit windfall have been taken by surprise by how strong the market has been. 

So what happens next?

It is of course entirely possible to read the runes and make a strategic play in the shipping market based on the remarkable supply and demand dynamics of 2021, but those who do will likely be disappointed.

The traditional capacity missteps of those who know only how to repeat the same mistakes are of course a matter of comic timing among those veterans who still appreciate a long running gag.

Like the Laurel and Hardy skit in which the benighted fellows push a piano up a long flight of stairs only to rest at the top and watch it go crashing down, we will no doubt see premature scrapping or the return of very low freight rates when demand inevitably fails to keep pace with the influx of orders.

But this is no mere cyclical sketch this time round.

As we have been arguing for several years now in our annual outlooks, context is key and much of shipping’s future fortunes rest on factors that have little to do with ships and this year’s extreme events have done little to change our minds.

What happens next requires businesses to manage the near-term volatility of unprecedented markets while simultaneously dealing with the strategic dilemma of decarbonisation. And for those secretly hoping that the current clamour for carbon pricing will fade once the media circus moves on from this year’s COP meetings in Glasgow, we have more bad news for you. 

The coalition of the willing currently pointing out that zero-emission fuels and vessels will need to start being deployed at scale over the next decade are talking a good game, but the rhetoric is not yet matched by action.

One forecast we can stand behind is that 2022 will be defined by the accelerating pace of change required to play catch-up with shipping’s laggardly approach to date.

For all the pilot projects promising carbon neutrality, scaling initiatives is going to be an era-defining process as the cost of turning aspiration into action is finally revealed.

The global call to decarbonise is only raising costs while leaving revenues vulnerable. Just because the fuel is changing doesn’t mean the industry’s ability to yield a return on invested capital will. And given shipping’s parlous history in that regard even the most optimistic forecast would concede that risk is growing for shipowners.

Today’s efficiency efforts are not fast enough and the consequence of that is a pathway of CO2 emissions diametrically opposed to the now radical reduction required across all sectors by 2030.

Green corridors and investment funds are a step in the right direction, but we need to be honest and admit that shipping is not going to halve its emissions by 2030, as the science requires us to, without a miraculous change of pace.

Shipping is behind the curve and regardless of whether you are a container kingpin currently rolling in unprecedented profits or a tanker survivor clinging on in anticipation of the recovery that remains stubbornly out of reach, the next decade will not be defined by the short-term market prospects.

The zero-carbon transition will challenge traditional ownership models ill-equipped to adapt, but decarbonisation alone is not a business strategy and the overall ability to yield a return on invested capital in shipping will not improve just because the fuel mix changes.

With all that in mind Lloyd’s List has once again gathered some of the industry’s leading minds to deliberate the trends and tipping points defining both the short and long term direction of the industry.

In the run-up to the annual Lloyd’s List Outlook Forum on November 30, we will be running a series of social media polls taking the temperature of the industry and assessing how Lloyd’s List’s readership of market-leading influencers will answer the critical questions shaping the maritime markets.

Those themes will then be picked up by our panel of experts during the Outlook Forum, which this year will again be held online.

As part of the live debate attendees and speakers will be asked for their market expectations via a live voting system. The consensus view from the forum will then be combined with the online polls and the Lloyd’s List 2022 Outlook publication to create a unique and informed snapshot of the key issues that will determine the fortunes for shipping in the years to come.

The Outlook Forum is free to attend and you can register here.

This year’s panel will feature:

•            Monique Giese, Global Shipping Lead KPMG

•            Şadan Kaptanoglu, Chief Executive Officer of Kaptanoglu Shipping and former president of BIMCO

•            Michael Parker, Chairman, Global Shipping Logistics & Offshore, Citigroup

•            Chris Wiernicki, Chairman, President and CEO of ABS

•            Frank G. Olsen, Chief Executive Officer, Inchcape Shipping Services